# EDGAR Filing Document

**Accession Number:** 0001022899
**File Stem:** 0001641172-25-025737
**Filing Date:** 2025-8
**Character Count:** 115454
**Document Hash:** d5d0a5295304df96283c796233ce7066
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-025737.hdr.sgml**: 20250828

**ACCESSION NUMBER**: 0001641172-25-025737

**CONFORMED SUBMISSION TYPE**: 8-K/A

**PUBLIC DOCUMENT COUNT**: 20

**CONFORMED PERIOD OF REPORT**: 20250515

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20250828

**DATE AS OF CHANGE**: 20250827

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Protagenic Therapeutics, Inc.\new
- **CENTRAL INDEX KEY:** 0001022899
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 061390025
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-12555
- **FILM NUMBER:** 251266860

**BUSINESS ADDRESS:**
- **STREET 1:** 149 FIFTH AVENUE
- **STREET 2:** SUITE 500
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10010
- **BUSINESS PHONE:** (212) 994-8200

**MAIL ADDRESS:**
- **STREET 1:** 149 FIFTH AVENUE
- **STREET 2:** SUITE 500
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10010

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Atrinsic, Inc.
- **DATE OF NAME CHANGE:** 20090630

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NEW MOTION, INC.
- **DATE OF NAME CHANGE:** 20070504

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MPLC, Inc.
- **DATE OF NAME CHANGE:** 20050608

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K/A**

**CURRENT REPORT**

**PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES EXCHANGE ACT OF 1934**

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| | |
|:---|:---|
| **Date of Report (Date of Earliest Event Reported):** | **May 15, 2025** |

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| |
|:---|
| **PROTAGENIC THERAPEUTICS, INC.** |
| (Exact name of Company as specified in its charter) |

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<u>Delaware</u> <u>001-12555</u> <u>06-1390025</u> <br> (State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.)

<u>149 Fifth Avenue, Suite 500, New York, NY</u> <u>10010</u> <br> (Address of principal executive offices) (Zip Code)

<u>212-994-8200</u> <br> (Company's telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

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| | | |
|:---|:---|:---|
| Title of each class | Ticker symbol(s) | Name of each exchange on which registered |
| Common Stock | PTIX | Nasdaq |
| Common Stock Warrants | PTIXW | Nasdaq |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

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. ☐

**Explanatory Note**

On May 19, 2025, Protagenic Therapeutics, Inc. (the "Company") filed a Current Report on Form 8-K (the "Original Form 8-K") reporting that on May 15, 2025, the Company entered into the Share Exchange Agreement (the "Exchange Agreement") with Alterola Biotech Inc., a Nevada corporation ("Alterola"), EMC2 Capital LLC, a Wyoming limited liability corporation ("EMC2"), the preferred stockholders of Phytanix set forth on Schedule A thereto (the "Preferred Stockholders") and Colin Stott, as "Seller's Representative (as defined therein), pursuant to which the Company acquired 100% of the issued and outstanding common shares of Phytanix Bio, a Nevada corporation ("Phytanix") (such transaction, the "Combination"). Prior to the Combination, Alterola and EMC2 collectively owned 100% of the issued and outstanding shares of the common shares of Phytanix (the "Shares"), and the Preferred Stockholders collectively owned 100% of the issued and outstanding shares of Series A convertible preferred shares of Phytanix (the "Preferred Shares").

This Current Report on Form 8-K/A, amends Item 9.01 of the Original Form 8-K to include the financial statements and unaudited pro forma financial information required by Items 9.01(a) and (b) of Form 8-K, respectively, which were not included in the Original Form 8-K pursuant to Items 9.01(a)(3) and (b)(2) of Form 8-K.

The pro forma financial information included in this Current Report on Form 8-K/A has been presented for informational purposes only, as required by Form 8-K. It does not purport to represent the actual results of operations that the Company and Phytanix would have achieved had the companies been combined during the periods presented in the pro forma financial information and is not intended to project the future results of operations that the combined company may achieve after the acquisition.

**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 included at the end of this report. This discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties such as statements of our plans, objectives, expectations and intentions. As a result of many factors, including those factors set forth in the "Risk factors" section of this report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.*

The discussion and analysis of our financial condition and results of operations are based on Protagenic's financial statements which Protagenic has prepared in accordance with U.S. generally accepted accounting principles. These financial statements are based on the historical financial statements of Phytanix Bio, Inc, the accounting acquirer in the reverse acquisition under ASC 805-40 that the Company completed on May 15, 2025. The preparation of these financial statements requires Protagenic to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, Protagenic evaluates such estimates and judgments, including those described in greater detail below. Protagenic bases its estimates on historical experience and on various other factors that Protagenic believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We expect to continue to incur significant expenses and minimal positive net cash flows from operations or negative net cash flows from operations for the foreseeable future, and those expenses and losses may fluctuate significantly from quarter-to-quarter and year-to-year. We anticipate that our expenses will fluctuate substantially as we:

● continue our ongoing preclinical studies, clinical trials and our product development activities for our pipeline of product candidates;

● seek regulatory approvals for any product candidates that successfully complete clinical trials;

● continue research and preclinical development and initiate clinical trials of our other product candidates;

● seek to discover and develop additional product candidates either internally or in partnership with other pharmaceutical companies;

● adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products;

● maintain, expand and protect our intellectual property portfolio; and

● incur additional legal, accounting and other expenses in operating as a public company.

**Recent Events**

***Acquisition of five preclinical drug candidate assets***

As a result of the Exchange Agreement with Alterola Biotech Inc., (see Explanatory Note above), the company acquired five preclinical drug candidate assets and five new employees, all of whom were working for or affiliated with the Alterola subsidiary known as Phytanix Bio, Inc. The drug candidate assets expanded our pipeline into multiple therapeutic areas beyond the target markets of PT00114, supported by an intellectual property portfolio. The acquired drug candidate assets consist of the following programs:

**PHYX-001: Kv7.2/7.3 Agonist for Epilepsy and Mood Disorders**

PHYX-001 is an in-licensed Kv7.2/7.3 agonist (non-cannabinoid) epilepsy asset that shares the same mechanism of action as compounds currently in late-stage development, including BVH-7000 and XEN1101. These comparator molecules are in Phase 3 clinical trials for focal onset seizures (FOS), generalized tonic-clonic seizures (GTCS), and major depressive disorder (MDD). XEN1101 (Azetukalner) has demonstrated encouraging efficacy and safety in Phase 2 studies (French et al., 2023). The intellectual property covering PHYX-001 includes two patent families (PHB0001 and PHB0002) related to our platform of potassium channel modulators with coverage in epilepsy. Patent family PHB0001 includes a granted U.S. patent expiring in June 2037. Patent family PHB0002 includes a granted U.S. patent and a pending European application, which, if granted, would cover up to 39 countries and extend until December 2038. These protections provide a substantial runway for development, and additional analogs may be introduced into the pipeline to further expand this franchise.

**PHYX-002: Cannabinoid-Based Therapeutics**

PHYX-002 is an internally developed cannabinoid asset with the potential to address a wide range of therapeutic areas. The Company anticipates further intellectual property filings as this program advances, with the goal of developing a product with improved potency and lower dosing requirements compared to currently available cannabinoid medicines, including Epidiolex. Potential clinical indications span epilepsy, schizophrenia, autism spectrum disorder, anxiety, depression, and cardiovascular disorders. Because this program involves new proprietary molecules, we anticipate the possibility of restarting the intellectual property "clock," which could extend the exclusivity horizons if composition-of-matter claims are obtained.

**PHYX-003: Anti-Obesity Candidate**

PHYX-003 is an internally developed preclinical asset targeting obesity. New intellectual property is being generated around this program, including potential composition-of-matter patents (which, if granted, would establish ownership of the underlying molecule), therapeutic use patents, synthetic route patents, and formulation patents.

The program is designed to potentially enhance weight-loss outcomes compared with current blockbuster therapies such as tirzepatide (Mounjaro/Zepbound) and semaglutide (Ozempic/Wegovy). Given the rapid growth and high level of unmet need in the global obesity market, PHYX-003 could represent a significant opportunity for the Company.

**PHYX-004: Cannabis Extract for Bladder Pain Syndrome / Interstitial Cystitis**

PHYX-004 is an internally developed cannabis-derived extract in preclinical development for the treatment of bladder pain syndrome / interstitial cystitis. Intellectual property is expected to be generated in several categories, including extraction methodology (process patents), extract composition, formulation, and therapeutic use claims. There is a significant unmet medical need in this indication, particularly due to limitations associated with the current standard of care, Elmiron. As such, PHYX-004 has the potential to address a patient population with few effective therapeutic options.

**PHYX-005: Modified Stilbenoid Program for Central Nervous System (CNS) and Inflammatory Indications**

PHYX-005 is an internally developed stilbenoid-based asset with potential applications in central nervous system and inflammatory conditions, including treatment-resistant seizures. The intellectual property portfolio supporting this program includes two patent families (PTX0001 and PTX0002). Patent family PTX0001 includes UK patent GB2609814, which provides composition-of-matter and medical use coverage extending until March 2041. Corresponding applications have been filed in Europe, Australia, Brazil, Canada, China, Israel, India, Japan, Republic of Korea, Mexico, the United States, South Africa, and the United Kingdom. Grants are anticipated shortly in the U.S., Europe, Australia, and Canada. The PTX0002 patent family remains pending and is expected to expand coverage through composition-of-matter and medical use filings. Collectively, these protections support a long-term platform around modified stilbenoids, complementing our cannabinoid-based portfolio.

In addition to the drug candidate assets, the Exchange Agreement brought two new senior level employees into the Company, (i) Barrett Evans as Chief Executive Officer and President and (ii) Colin Stott as Chief Operating Officer.

The acquisition of the five preclinical drug candidate assets via the Exchange Agreement meaningfully broadened our product pipeline across neurology, psychiatry, obesity, urology, and inflammation. Each program is supported by an emerging intellectual property estate designed to provide durable protection. While all five assets remain at the preclinical stage and carry the associated risks of early development, they present multiple strategic opportunities to address large markets with unmet medical needs.

***Notice of Delisting and Related Actions***

On July 24, 2024, the Company received a deficiency letter (the "Notification Letter") from the Nasdaq Listing Qualifications ("Nasdaq") stating that it is not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. The Notification Letter states that the Company has 180 calendar days, or until January 20, 2025, to regain compliance with Nasdaq Listing Rule 5550(a)(2). To regain compliance, the Company's closing bid price of the Company's common stock must have a closing bid price of at least $1.00 for a *minimum* of ten consecutive business days.

On January 22, 2025, Nasdaq provided a notice to the Company that the Company had not regained compliance with Rule 5550(a)(2) and is not eligible for a second 180 calendar day compliance period as the Company does not comply with the requirements for initial listing on The Nasdaq Capital Market. This notification is part of the ongoing discussions with the Nasdaq Hearings Panel (the "Panel") regarding the Company's listing status, and the Company included this matter in its presentation to the Panel on January 30, 2025.

On February 19, 2025, the Company received a hearing panel decision from Nasdaq (Nasdaq Listing Qualifications Hearings Docket No. NQ 7072C-25) indicating that its provisional plan for regaining compliance with the Nasdaq listing requirements had been accepted. For continued listing on the Nasdaq Capital Market, the Company has until April 28, 2025 to: (1) demonstrate compliance with Nasdaq Rules 5550(a)(2) and 5550(b)(2), (2) file a public disclosure describing any transactions undertaken by the Company to increase its equity and provide and indication of its equity following those transactions, and (3) provide the Panel with an update on its fundraising plans and updated income projections for the next 12 months.

On April 18, 2025, the Company held a Special Meeting of Shareholders in which the Shareholders voted to authorize a reverse split of a magnitude between 1-for-10 and 1-for-20, for the purpose of increasing the chances of the Company regaining compliance with Nasdaq Listing Rule. 5550(a)(2). The Board determined that the best ratio to use was 1-for-14, because it would be the highest ratio that maintained at least 500,000 shares remaining in the Company's public float, while maximizing the Company's likely price per share.

On April 25, 2025, the Company provided an update to Nasdaq on its plans for both minimum bid compliance and capital raising, along with a request for an extension on the April 28, 2025 deadline. The update included that the 1-for-14 reverse split would be effective May 5, 2025, and the company had engaged a syndicate of two underwriters to market and implement an equity financing for the purpose of raising enough capital to comply with Nasdaq Listing Rule 5810(c)(3)(A). On May 1, 2025, Nasdaq provided a response to the Company's representative that the Panel has approved the Company's extension request. As a result, the Company believes that it should be able to achieve a minimum bid price for 10 days above $1 by May 16, 2025, and the shareholder equity compliance by May 19, 2025.

On June 17, 2025, the Company received a letter from Nasdaq stating that the Nasdaq Hearings Panel found the Company in compliance with Listing Rules 5550(a)(2), 5550(a)(4), 5550(b)(1), and 5620(a), the Bid Price, Public Float, Equity and Annual Shareholder Meeting Rule, respectively as required by the February 19, 2025, decision. The letter also stated that pursuant to Listing Rule 5815(d)(4)(B), the Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of this letter. If, within that one-year monitoring period, Staff finds the Company again out of compliance with the Equity Rule, notwithstanding Rule 5810(c)(2), the Company will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and Staff will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor will the company be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3). Instead, Staff will issue a Delist Determination Letter, and the Company will have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel is unavailable. The Company will have the opportunity to respond/present to the Hearings Panel as provided by Listing Rule 5815(d)(4)(C). The Company's securities may be at that time delisted from Nasdaq.

On August 20, 2025, the "Company received a notification letter (the "Notification Letter") from the Nasdaq Listing Qualifications department ("Nasdaq") stating that it is not in compliance with Nasdaq Listing Rule 5250(c)(1) as a result of its failure to timely file its Quarterly Report on Form 10-Q for the period ended June 30, 2025 (the "Form 10-Q") with the Securities and Exchange Commission (the "SEC"). The Notification Letter states that the Company has 60 calendar days to submit a plan to regain compliance and if Nasdaq accepts such plan, they can grant an exception of up to 180 calendar days from the Form 10-Q's due date (or until February 17, 2026).

As previously reported in the Company's Notification of Late Filing on Form 12b-25 filed with the SEC on August 14, 2025 (the "Form 12b-25"), the Company was unable to file the Form 10-Q within the prescribed period without unreasonable effort or expense. The Company is working a restructuring plan and related accounting and disclosures. Such procedures are being completed with Audit Committee oversight and consultation with the Company's external advisors. Subsequent to filing the Form 12b-25, the Company continued to dedicate significant resources to the completion of such procedures but was unable to file the Form 10-Q by August 19, 2025, the end of the extension period provided by the Form 12b-25.

The Company intends to take the necessary steps to regain compliance with Nasdaq's listing rules as soon as practicable and currently expects to submit a plan of compliance with Nasdaq and/or file the Form 10-Q within the 60-day period granted by Nasdaq in the Notification Letter. However, there can be no assurance that a plan of compliance will be submitted within such period, the Form 10-Q will be filed within such period, Nasdaq will grant the Company an exception of up to 180 calendar days from the Form 10-Q's due date, or that the Company will be able meet the continued listing requirements during any compliance period that may be granted by Nasdaq.

 ****

***Change of Fiscal Year***

On August 7, 2025, the Board approved a change in the Company's fiscal year-end from December 31 to March 31, effective immediately. The Company intends to file a transition report on Form 10-QT with the Securities and Exchange Commission for the transition period beginning April 1, 2025 and ending June 30, 2025.

 ****

***Change of Certifying Accountant***

On August 7, 2025, MaloneBailey, LLP ("MaloneBailey") was dismissed as the independent registered public accounting firm of the Company. On August 7, 2025, the Audit Committee of the Board of Directors of the Company was directed to engage GreenGrowth CPAs ("Green Growth") to serve as the Company's independent registered public accounting firm. The decision to change auditors was approved by the Company's Board of Directors.

During the fiscal year ended December 31, 2024 and the subsequent interim period through August 7, 2025, the date of the dismissal of MaloneBailey, there were no disagreements with MaloneBailey, on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of MaloneBailey would have caused it to make reference to the subject matter thereof in connection with its report, nor did its report contain an adverse opinion or a disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope, or accounting principle except that MaloneBailey's report for the fiscal year ended December 31, 2024 contained an explanatory paragraph regarding the existence of substantial doubt about the Company's ability to continue as a going concern. Also, there were no "reportable events" within the meaning of Item 304(a)(1)(v) of Regulation S-K.

During the two fiscal years ended December 31, 2024 and 2023, and the subsequent interim period through August 7, 2025, neither the Company nor anyone acting on its behalf has consulted with Green Growth with respect to (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report nor oral advice was provided to the Company that Green Growth concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; (ii) any matter that was the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions thereof; or (iii) a reportable event as described in Item 304(a)(1)(v) of Regulation S-K and the related instructions thereof.

 ****

***Corporate Restructuring***

On August 8, 2025, the Board of Directors (the "Board") approved a focused restructuring plan (the "Restructuring Plan") to transition to a virtual operating model and concentrate capital on the Company's highest-priority clinical program(s). In approving the Restructuring Plan, the Board determined that a disciplined cost structure and a sharper focus on near-term value inflection are in the best interests of the Company and its stockholders.

Under the Restructuring Plan, the Company (i) temporarily suspended expenditures related to its preclinical programs described above and (ii) initiated a process to evaluate strategic alternatives for those programs, including partnerships and/or out-licensing, with the objective of advancing them with appropriate external funding while preserving cash for the Company's lead clinical assets. By doing so, the Company reduced operating expenses, overhead, and headcount primarily associated with preclinical activities.

When fully implemented, the Restructuring Plan is expected to reduce annualized operating expenses by approximately $8 million. The Company expects to incur one-time charges in connection with the Restructuring Plan; however, because key actions remain in process, the Company cannot reasonably estimate the total amount or timing of such charges at this time and will provide an update in a subsequent filing once such amounts are estimable.

In connection with the Restructuring Plan, the Board a terminated the employment of (i) Barrett Evans as Chief Executive Officer and President and (ii) Colin Stott as Chief Operating Officer, in each case effective immediately. Messrs. Evans and Stott remain members of the Company's Board of Directors. Any severance or other compensatory agreements, if applicable, will be disclosed when determined. Workforce reductions also included the certain roles primarily associated with preclinical operations, regulatory affairs, and intellectual property functions.

In total, the Restructuring Plan was designed to accomplish three things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Clinical focus. The Company will allocate available resources to efficiently execute the ongoing Phase 2 clinical trial of PT00114 (peptide analogue), which the Company currently expects to complete in approximately 9 to 12 months, subject to enrollment and other customary factors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Preclinical programs paused. All preclinical programs originated with former Phytanix Bio (PHYX-001, PHYX-002, PHYX-003, PHYX-004, and PHYX-005) were paused. The Company will actively pursue strategic alternatives, including partnerships or out-licensing, to advance these assets with appropriate funding while conserving cash. The Company expects to retain external consultant(s), as needed, with cumulative annual fees not anticipated to exceed $200,000, to provide subject-matter expertise in cannabinoid-related drug development.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Virtual operating model. The Company is transitioning to a virtual operating model to minimize cash burn while prioritizing its clinical-stage program.

**Results of Operations**

Integrating the results of the acquisition of five preclinical drug candidate assets and the subsequent Restructuring Plan, the company is a development stage company currently performing clinical trials to obtain Food and Drug Administration ("FDA") approval and commercialization of our product.

During the year ended March 31, 2025, Phytanix incurred a loss from operations of $2,593,561 as compared to $403,792 for the year ended March 31, 2024. The increase in the loss is primarily due to an increase in research and development expense of $347,970 from $28,770 for the year ended Mach 31, 2024 to $376,740 for the year ended March 31, 2025, an increase in legal of $183,097 from $0 for the year ended March 31, 2024 to $183,097 for the year ended March 31, 2025, an increase in consulting fees of $561,698 from $105,886 for the year ended March 31, 2024 to $667,584 for the year ended March 31, 2025, and an increase in bad debt expense of $1,023,235 from $0 for the year ended March 31, 2024 to $1,023,235 for the year ended March 31, 2025. The increase in research and development expense is due to the fact that the former Phytanix Bio, Inc., which was acquired by the Company in May 2025 but is being treated as the accounting acquirer and therefore solely responsible for the historical operating expenses, was conducting pre-clinical development work on three cannabinoid and two stillbenoid drug candidate compounds during the quarter that ended March 31, 2025. By contrast, the former Phytanix Bio was conducting little or no drug development work in the quarter ended March 31, 2024 (as Phytanix Bio had only been incorporated in Nevada in 2024). The increase in consulting fees was due to the former Phytanix Bio's practice of hiring several new drug development consultants during late 2024 that had not been working on behalf of the company prior to March 31, 2024. The increase in bad debt expense was due to the write-off of receivables generated when Phytanix advanced funds to Chain Bridge I, a special purpose acquisition company (SPAC) that was a party to an agreement to acquire Phytanix Bio that was terminated during the quarter that ended March 31, 2025.

**Liquidity and Capital Resources**

Since our inception, we have incurred significant operating losses. We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for several years, if at all. To date, we have primarily financed our operations through the public offering of our equity securities and the private placement of our convertible securities.

In June 2024, the SEC declared effective a shelf registration statement filed by us. This shelf registration statement allows us to issue any combination of our common stock, preferred stock, debt securities, warrants, or units from time to time for an aggregate initial offering price of up to $100 million. In July 2021, we entered into an At Market Issuance Agreement, or the ATM Agreement, with B. Riley Securities, Inc. and EF Hutton, division of Benchmark Investments, LLC, or the Sales Agents, under which we may issue and sell from time to time up to $10.0 million of our common stock through or to the Sales Agents, as agent or principal. Any sale of shares of our common stock under the Sales Agreement will be made under our shelf registration statement on Form S-3. Sales of our common stock under the Sales Agreement are made at market prices by any method that is deemed to be an "at the market offering" as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. The Company has sold approximately 800,000 shares under the ATM Agreement. Also, as the price of our stock has declined, the value of stock that can be sold under the ATM facility has declined. As of June 30, 2025, approximately $1.0 million of our common stock remained available for sale under the Sales Agreement.

Operating activities used $1,768,908 and $270,614 in cash for the years ended March 31, 2025 and 2024, respectively. The use of cash in operating activities during the year ended March 31, 2025, primarily comprised of $3,591,858 net loss, $598,810 in amortization of debt discount, $1,023,235 in bad debt expense, and a $388,118 increase of accounts payable and accrued liabilities, which included payments to legal and accounting professionals, payments to consultants, and other administrative expenses.

Investing activities provided no cash for the years ended March 31, 2025 and 2024, respectively.

Financing activities provided $1,809,265 and $297,169 by cash for the years ended March 31, 2025 and 2024 respectively. The cash provided by financing activities during the year ended March 31, 2025 consisted primarily of $1,622,003 from proceeds from notes payable and $187,062 from proceeds from related party loans.

We continually project anticipated cash requirements, predominantly from the ongoing funding requirements of our neuropeptide drug development program. The majority of these expenses relate to paying external vendors such as Contract Research Organizations (CROs) and peptide synthesizer companies. They could also include business combinations, capital expenditures, and new drug development working capital requirements. As of March 31, 2025, we had cash of $14,531 and working capital deficit of $4,952,959.

We anticipate that losses will continue for the foreseeable future. Based on our current operating plans, we believe that our cash resources will be sufficient to fund the Company's operations until approximately the end of the second quarter of FY 2027 (the quarter that ends September 30, 2026). In order to continue our operations beyond our forecasted runway we will need to raise additional capital, and we have no committed sources of additional capital at this time. The forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of our expenses could vary materially and adversely as a result of a number of factors. We have based our estimates on assumptions that may prove to be wrong, and our expenses could prove to be significantly higher than we currently anticipate. Management does not know whether additional financing will be on terms favorable or acceptable to us when needed, if at all. If adequate additional funds are not available when required, or if we are unsuccessful in entering into partnership agreements for further development of our product candidates, management may need to curtail its development efforts and planned operations.

**Plan of Operations**

***Business Overview***

The Company is in its developmental stage, with encouraging but not conclusive evidence that its lead drug candidate, PT00114, may be effective as an anti-anxiety and/or anti-depression drug. It is focused on confirming the efficacy of this drug candidate, along with performing the other preclinical steps needed to progress along the pathway to bring this drug candidate into human clinical trials and eventually, to the global market to provide a new pharmaceutical for patients suffering from anxiety or treatment-resistant depression.

If we are able to successfully develop our drug, PT00114, and obtain FDA approval, we could then begin marketing and selling it in the United States and generate revenue. FDA approval to begin commercial sales is the singular gating item that will allow us to begin generating sales revenue in the U.S., so it will have an enormous impact on our business plan and our financial condition. It is anticipated that the sale of our drug will allow the Company to generate enough sales revenue to support all of our operations and to generate a profit. However, given the stage of development, even if FDA Approval is obtained, we do not anticipate generating any revenue from sales prior to 2027. On May 22, 2024, we announced the results of the single dose portion of the Phase I study for PT00114.

***Development Milestones Currently Anticipated***

Recent communications with the U.S. FDA, the European The Federal Institute for Drugs and Medical Devices (Bundesinstitut für Arzneimittel und Medizinprodukte, or BfArM) and other regional regulatory authorities have resulted in following revised guidance for clinical timelines.

● Anticipate Q2 FY 2026 (the quarter ending September 30, 2025) Complete multiple dose portion of Phase I study for PT00114

● Anticipate Q2 FY 2026 (the quarter ending September 30, 2025) Public availability of results from multiple dose portion of Phase I study for PT00114

● Anticipate Q4 FY2026 (he quarter ending March 31, 2026) : Initiation of Phase IIa study for PT00114

***Human Resources (current state of employees)***

The Company has four part-time employees: Garo H. Armen, PhD, the Executive Chairman, Andrew Slee, PhD, Chief Development Officer, Robert S. Stein, MD, PhD, Chief Medical Officer, and Alexander K. Arrow, MD, the Chief Financial Officer, and one full-time employee, Lauren Mueller, PhD, a Senior Research Scientist. The Company also has three paid consultants: Dalia Barsyte, PhD, Scientific Advisor, David Lovejoy, PhD, Scientific Advisor, and Zack Armen, Strategic Advisor.

**Off Balance Sheet Arrangements**

We have no material off-balance sheet arrangements that are likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital resources, or capital expenditures.

**Critical accounting policies and estimates**

Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The notes to the consolidated financial statements contained in this Annual Report describe our accounting policies used in the preparation of the consolidated financial statements. None of those policies are deemed to be critical accounting policies nor critical accounting estimates. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We continually evaluate our critical accounting policies and estimates.

**Recently Issued Accounting Pronouncements**

None

**Item 9.01 Financial Statements and Exhibits.**

(a) Financial statements of businesses acquired.

The audited financial statements and accompanying notes of Phytanix Bio Inc. as of and for the years ended March 31, 2025 and 2024 are filed as Exhibit 99.1 to this Current Report on Form 8-K/A and incorporated herein by reference.

(b) Pro forma financial information.

The unaudited pro forma condensed combined balance sheet as of March 31, 2025, the unaudited pro forma combined statement of operations for the year ended March 31, 2025, and the related notes of Phytanix Bio Inc. with respect to the transaction described above, are filed as Exhibit 99.2 to this Current Report on Form 8-K/A and incorporated herein by reference.

(c) Exhibits.

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 23.1 | [Consent of GreenGrowth CPAs Inc. the independent auditor of Phytanix Bio, Inc.](ex23-1.htm) |
| 99.1 | [Audited financial statements of Phytanix Bio Inc., as of and for the years ended March 31, 2025 and 2024.](ex99-1.htm) |
| 99.2 | [Unaudited pro forma condensed combined financial information of Protagenic Therapeutics, Inc., as of and for the year ended March 31, 2025](ex99-2.htm)  |
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | PROTAGENIC THERAPEUTICS, INC. | PROTAGENIC THERAPEUTICS, INC. |
| Date: August 27, 2025 | By: | */s/ Alexander K. Arrow* |
|  | Name: | Alexander K. Arrow |
|  | Title: | Chief Financial Officer |

---

## Exhibit 23.1

**Exhibit 23.1**

![](ex23-1_001.jpg)

To the Audit Committee of Protagenic Therapeutics, Inc.

We consent to the inclusion in the Form 8-K/A of Protagenic Therapeutics, Inc. of our report dated August 27, 2025, relating to our audits of the consolidated balance sheet of Phytanix Bio, Inc. as of March 31, 2025 and 2024, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for each of the years then ended, and the related notes.

![](ex23-1_002.jpg)

August 27, 2025

We have served as the Company's auditor since 2024

Los Angeles, California

PCAOB ID Number 6580

## Exhibit 99.1

**Exhibit 99.1**

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**CONSOLIDATED FINANCIAL STATEMENTS (IN US$)**

**March 31, 2025 and 2024**

**CONTENTS**

---

| | |
|:---|:---|
| [Report of Independent Registered Public Accounting Firm](#ap_001) (PCAOB ID: 6580) | F-2 |
| [Consolidated Financial Statements:](#a_006) |  |
| [Consolidated Balance Sheets as of March 31, 2025 and 2024](#a_001) | F-3 |
| [Consolidated Statements of Operations and Comprehensive Loss - For the Years Ended March 31, 2025 and 2024](#a_002) | F-4 |
| [Consolidated Statements of Changes in Stockholders' Deficit – For the Years Ended March 31, 2025 and 2024](#a_003) | F-5 |
| [Consolidated Statements of Cash Flows - For the Years Ended March 31, 2025 and 2024](#a_004) | F-6 |
| [Notes to Consolidated Financial Statements](#a_005) | F-7 |

---

![](aud_001.jpg)

Report of Independent Registered Public Accounting Firm

To the Board of Directors and

Stockholders of Protagenic Therapeutics, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying Consolidated Balance Sheets of Phytanix Bio, Inc. and subsidiaries (the Company) as of March 31, 2025, and 2024, and the related Consolidated Statements of Operations and Comprehensive Loss, Consolidated Statement of Stockholders' Deficit, and Consolidated Statement of Cash Flows for each of the years in the periods ended in March 31, 2025, and March 31, 2024, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025, and 2024, and the results of its operations and its cash flows for each of the years in the period ended March 31, 2025, and March 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

**Consideration of the Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

![](aud_002.jpg)

August 27, 2025

We have served as the Company's auditor since 2024.

Los Angeles, California

PCAOB ID Number 6580

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS (IN US$, except for share and per share numbers)**

**AS OF MARCH 31, 2025 AND MARCH 31, 2024**

---

| | | |
|:---|:---|:---|
|  | March 31, 2025 | March 31, 2024 |
| ASSETS |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash in bank | $14531 | $1625 |
| &nbsp;&nbsp;&nbsp;VAT receivable | 73524 | 33157 |
| &nbsp;&nbsp;&nbsp;Inventories | 1038 | 1009 |
| &nbsp;&nbsp;&nbsp;Total current assets | 89093 | 35791 |
| Total Assets | $89093 | $35791 |
| LIABILITIES AND STOCKHOLDERS' DEFICIT |  |  |
| LIABILITIES: |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Notes payable, net | $1669921 | $- |
| &nbsp;&nbsp;&nbsp;Accounts payable | 961117 | 779038 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 249063 | 43024 |
| &nbsp;&nbsp;&nbsp;Derivative liabilities | 1382750 |  |
| &nbsp;&nbsp;&nbsp;Loans payable, related parties | 779201 | 1002895 |
| Total current liabilities | 5042052 | 1824957 |
| Total liabilities | 5042052 | 1824957 |
| Commitments and Contingencies |  |  |
| STOCKHOLDERS' DEFICIT: |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, $0.000000001 par value. 100,000 shares authorized |  |  |
| &nbsp;&nbsp;&nbsp;Series A convertible preferred stock, 100,000 shares designated, 17,000 and 0 shares issued and outstanding as of March 31, 2025 and 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.000000001 par value, respectively; 10,000,000 authorized; 5,800,000 and 5,000,000 shares issued outstanding as of March 31, 2025 and 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid in capital | 455657 | 141 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (5397606) | (1805748) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | (11010) | 16441 |
| &nbsp;&nbsp;&nbsp;Total stockholders' deficit | (4952959) | (1789166) |
| Total liabilities and stockholders' deficit | $89093 | $35791 |

---

See accompanying notes to consolidated financial statements

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (IN US$, except for share and per share numbers)**

**FOR THE YEARS ENDED MARCH 31, 2025 AND 2024**

---

| | | |
|:---|:---|:---|
|  | Year Ended<br>March 31, 2025 | Year Ended<br>March 31, 2024 |
| REVENUES | $- | $- |
| OPERATING EXPENSES: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounting and audit fees | 132600 | 75425 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and Development | 376740 | 28770 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Legal Fees | 183097 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consulting Fees | 667584 | 105886 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salaries and wages | 132775 | 124924 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bad debt | 1023235 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative - other | 77530 | 68787 |
| TOTAL OPERATING EXPENSES | 2593561 | 403792 |
| LOSS FROM OPERATIONS | (2593561) | (403792) |
| OTHER INCOME (EXPENSES): |  |  |
| &nbsp;&nbsp;&nbsp;Interest expenses/amortization of discount | (1039353) |  |
| &nbsp;&nbsp;&nbsp;Foreign currency exchange differences | 41056 | - |
| TOTAL OTHER INCOME (EXPENSE) | (998297) | - |
| LOSS BEFORE INCOME TAXES | (3591858) | (403792) |
| PROVISION FOR INCOME TAXES | - | - |
| NET LOSS | $(3591858) | $(403792) |
| NET LOSS PER SHARE: |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | $(0.67) | $(0.08) |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 5372474 | 5000000 |
| COMPREHENSIVE LOSS: |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(3591858) | $(403792) |
| Other comprehensive loss: |  |  |
| &nbsp;&nbsp;&nbsp;Unrealized foreign currency translation (loss) gain | (27451) | (27791) |
| Comprehensive loss | $(3619309) | $(431583) |

---

See accompanying notes to consolidated financial statements

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (IN US$, except for share and per share number)**

**FOR THE YEARS ENDED MARCH 31, 2025 AND 2024**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Series A Preferred Stock | Series A Preferred Stock | Common Stock | Common Stock | | | | |
|  | $0.000000001<br> Par Value | $0.000000001<br> Par Value | $0.000000001<br> Par Value | $0.000000001<br> Par Value | | | | |
|  | Shares | Amount | Shares | Amount |<br>Additional<br> Paid-in<br>Capital | Accumulated<br>Other<br> Comprehensive<br>Income (Loss) |<br>Accumulated<br>Deficit |<br>Total<br> Stockholders'<br>Deficit |
| **Balances March 31, 2023** |  | $- | 5000000 | $- | $141 | $44232 | $(1401956) | $(1357583) |
| Foreign currency translation |  |  |  |  |  | (27791) |  | (27791) |
| Net loss for the year |  | - | - | - | - | - | (403792) | (403792) |
| **Balances, March 31, 2024** |  | $- | 5000000 | $- | $141 | $16441 | $(1805748) | $(1789166) |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Series A Preferred Stock | Series A Preferred Stock | Common Stock | Common Stock | | | | |
|  | $0.000000001<br> Par Value | $0.000000001<br> Par Value | $0.000000001<br> Par Value | $0.000000001<br> Par Value | | | | |
|  | Shares | Amount | Shares | Amount |<br>Additional<br> Paid-in<br>Capital | Accumulated<br>Other<br> Comprehensive<br>Income (Loss) |<br>Accumulated<br>Deficit |<br>Total<br> Stockholders'<br>Deficit |
| **Balances March 31, 2024** |  | $- | 5000000 | $- | $141 | $16441 | $(1805748) | $(1789166) |
| Change in foreign currency |  |  |  |  |  | (27451) |  | (27451) |
| Shares issued in connection with exchange agreement | 17000 |  | 800000 |  | 44560 |  |  | 44560 |
| Cash received for founders shares |  |  |  |  | 200 |  |  | 200 |
| Debt extinguishment - related party - parent reflected as capital contribution |  |  |  |  | 410756 |  |  | 410756 |
| Net loss for the year | - | - | - | - | - | - | (3591858) | (3591858) |
| **Balances, March 31, 2025** | 17000 | $- | 5800000 | $- | $455657 | $(11010) | $(5397606) | $(4952959) |

---

See accompanying notes to consolidated financial statements

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS (IN US$, except for share and per share numbers)**

**FOR THE YEARS ENDED MARCH 31, 2025 AND 2024**

---

| | | |
|:---|:---|:---|
|  | Year Ended <br> March 31, 2025 | Year Ended <br> March 31, 2024 |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(3591858) | $(403792) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash flows used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount to interest expense | 598810 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Warrants and stock issued for services | 103184 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bad debt | 773234 |  |
| &nbsp;&nbsp;&nbsp;Changes in: operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (29) | (19) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VAT receivable | (40367) | 4926 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 182079 | 136132 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 206039 | (7861) |
| Net cash used in operating activities | (1768908) | (270614) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from notes payable | 1622003 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of common stock | 200 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from related party loans | 187062 | 297169 |
| Net cash provided by financing activities | 1809265 | 297169 |
| NET INCREASE IN CASH | 40357 | 26555 |
| Effect of exchange rate adjustments on cash | (27451) | (27791) |
| CASH, beginning of year | 1625 | 2861 |
| CASH, end of year | $14531 | $1625 |
| SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION: |  |  |
| &nbsp;&nbsp;&nbsp;Interest paid | $- | $- |
| &nbsp;&nbsp;&nbsp;Income taxes paid | $- | $- |
| NON-CASH INVESTING AND FINANCING INFORMATION: |  |  |
| Bifurcation of warrants as derivative liabilities | $1324126 | $- |
| Debt extinguishment - related party parent reflect as capital contribution | $410756 | $- |

---

See accompanying notes to consolidated financial statements

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (IN US$)**

**MARCH 31, 2025 AND 2024**

**NOTE 1 – <u>NATURE OF BUSINESS, LIQUIDITY AND GOING CONCERN</u>**

**NATURE OF BUSINESS**

Phytanix Bio, Inc. ("Phytanix Bio", "Phytanix" or the "Company") was formed on April 16, 2024 as a holding company which owns ABTI Pharma Limited ("ABTI Pharma") and its wholly-owned subsidiaries, which existed prior to the formation of Phytanix.

On April 16, 2024, Alterola Biotech Inc. formed Phytanix Bio as its wholly-owned subsidiary. Phytanix Bio was formed to recapitalize entities owned by Alterola Biotech Inc., a Nevada corporation ("Alterola") whereby Alterola owns Phytanix Bio and Phytanix Bio became the owner of ABTI Pharma (i.e. ABTI Pharma and its wholly-owned subsidiaries, Ferven Limited ("Ferven") and Phytotherapeutix Ltd ("Phyto")). All of the pharmaceutical assets and intellectual property of Alterola are held within ABTI Pharma Ltd or its wholly-owned subsidiaries, Ferven and Phyto, and hence these are now owned by Phytanix Bio. Accordingly, the Company has been recapitalized as if Phytanix Bio was the holding company of ABTI Pharma and its wholly-owned subsidiaries as of the beginning of all periods presented.

ABTI Pharma was formed as a UK company, registered in England and Wales, on January 7, 2021. On January 19, 2021, ABTI Pharma entered into a Stock Purchase Agreement (the "Agreement") with Alterola pursuant to which Alterola agreed to acquire all of the outstanding shares of capital stock of ABTI Pharma from its shareholders in exchange for 600,000,000 shares of Alterola pro rata to the ABTI Pharma shareholders. The shares were issued on January 29, 2021 in anticipation of the closing and the parties to the transaction agreed in a May 24, 2021 amendment to close upon the ABTI Pharma Limited Shares being transferred to Alterola which was to occur on May 28, 2021. This transaction was accounted for as a reverse acquisition and recapitalization. ABTI Pharma was the acquirer for accounting purposes and Alterola was the issuer, and the Company became a wholly-owned subsidiary of Alterola.

ABTI Pharma is focused on the development of cannabinoid, cannabinoid-like, and non-cannabinoid pharmaceutical active pharmaceutical ingredients (APIs), pharmaceutical medicines made from cannabinoid, cannabinoid-like, and non-cannabinoid APIs and European novel food approval of cannabinoid-based, cannabinoid-like and non-cannabinoid ingredients and products.

As of April 18, 2023, Phyto acquired intellectual property from Alinova Biosciences Ltd. Phyto acquired Alinova's joint interest in the patent family of PTX 0001. The Company paid 35,000 Sterling in cash and 5,000,000 shares of Alterola Biotech Inc. (ABTI) stock.

**Terminated Business Combination – CBRG**

On July 22, 2024, the Company, Chain Bridge I, a Cayman Islands exempted company ("CBRG"), CB Holdings, Inc., a Nevada corporation ("HoldCo"), CB Merger Sub 1, a Cayman Islands exempted company ("CBRG Merger Sub"), and CB Merger Sub 2, Inc., a Nevada corporation ("Company Merger Sub"), had entered into a Business Combination Agreement the "Business Combination Agreement").

Phytanix Bio is a subsidiary of Alterola, and Phytanix Bio is the parent company of ABTI Pharma, which holds the subsidiaries, Ferven and Phyto. Phytanix Bio is an innovative pharmaceutical company dedicated to the development of therapeutics based on cannabinoid and cannabinoid-like molecules. CBRG is a special purpose acquisition company formed for the purpose of acquiring or merging with one or more businesses.

The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and CBRG. The Business Combination Agreement provided for, among other things, the consummation of the following transactions (the transactions contemplated by the Business Combination Agreement, collectively, the "Business Combination"):

(i) CBRG
 Merger Sub was to merge with and into CBRG (the "CBRG Merger") and Company Merger Sub was to merge with and into the
 Company (the "Company Merger" and, together with the CBRG Merger, the "Mergers"), with CBRG and the Company
 surviving the Mergers and, after giving effect to such Mergers, each of CBRG and the Company were to become a wholly owned subsidiary
 of HoldCo on the terms and subject to the conditions in the Business Combination Agreement;

(ii) (A)
 each issued and outstanding Class A ordinary share, par value $0.0001 per share, of CBRG (the "CBRG Class A Shares")
 were to be automatically cancelled, extinguished and converted into the right to receive one share of common stock, par value $0.0001
 per share, of HoldCo (the "HoldCo Shares"); and (B) each issued and outstanding Class B ordinary share, par value $0.0001
 per share, of CBRG (the "CBRG Class B Shares" and together with the CBRG Class A Shares, the CBRG Shares), were to be
 automatically cancelled, extinguished and converted into the right to receive one HoldCo Share;

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (IN US$)**

**MARCH 31, 2025 AND 2024**

(iii) each
 outstanding warrant to purchase one CBRG Class A Share were to be automatically exchanged for a warrant to purchase one HoldCo Share;
 and

(iv) (A)
 each warrant of the Company to purchase Company common stock were to be exchanged for a warrant to purchase HoldCo Shares; (B) each
 warrant of the Company to purchase Company preferred stock will be exchanged for a warrant to purchase HoldCo preferred stock; (C)
 all promissory notes of the Company issued in connection with its June 2024 financing (as discussed below in "Notes Payable")
 were to be exchanged for HoldCo Series A convertible preferred stock, and any remaining issued and outstanding promissory notes of
 the Company were to be automatically and fully cancelled; (D) each share of preferred stock, par value $0.000000001 per share, of
 the Company (the "Company Preferred Stock") that is issued and outstanding were to be automatically converted into shares
 of HoldCo preferred stock; and (E) all issued and outstanding shares of Company Common Stock (other than treasury shares and shares
 with respect to which appraisal rights under the Nevada law are properly exercised and not withdrawn) were to be automatically cancelled,
 extinguished and converted into the right to receive HoldCo Shares based on the exchange ratio set forth in the Business Combination
 Agreement.

The Business Combination was expected to close in the fourth quarter of 2024, following the receipt of the required approval by CBRG's and the Company's shareholders and the fulfillment of other customary closing conditions, however, on April 7, 2025, the Company and CBRG agreed to terminate all agreements related to the proposed transaction. As a result of the termination of the agreement, the Company wrote off $1,023,235 in funds that were advanced to CRBG that have not and are not expected to be returned.

On May 15, 2025, Protagenic Therapeutics, Inc., a Delaware corporation (the "Protagenic"), entered into the Share Exchange Agreement (the "Exchange Agreement") with Alterola, EMC2 Capital LLC, a Wyoming limited liability corporation ("EMC2"), the preferred stockholders of Phytanix Bio (the "Preferred Stockholders") and Colin Stott, as the Seller's Representative, pursuant to which Protagenic acquired 100% of the issued and outstanding common shares of Phytanix Bio.. Prior to the Combination, Alterola and EMC2 collectively owned 100% of the issued and outstanding shares of the common shares of Phytanix (the "Shares"), and the Preferred Stockholders collectively owned 100% of the issued and outstanding shares of Series A convertible preferred shares of Phytanix (the "Preferred Shares").

Under the terms of the Exchange Agreement, in exchange for all of the outstanding Shares of Phytanix at the Effective Time, Protagenic issued to Alterola and EMC2, as shareholders of Phytanix, in each case in accordance with their Pro Rata Portion (as defined in the Exchange Agreement), an aggregate of (A) 117,690 shares of Protagenic's common stock, par value $0.0001 per share ("Common Stock"), which shares represented a number of shares equal to no more than 19.99% of the outstanding shares of Common Stock as of immediately before the Effective Time, (B) 5,705 shares of Protagenic's Series C Convertible Preferred Stock, par value $0.000001 per share (the "Series C Preferred Stock"), and (C) 950,000 shares of Protagenic's Series C-1 Convertible Preferred Stock, par value $0.000001 per share (the "Series C-1 Preferred Stock", and together with the Series C Preferred Stock, the "Preferred Stock Payment Shares"). In addition, in exchange for all of the outstanding Preferred Shares of Phytanix at the Effective Time, Protagenic issued to the Preferred Stockholders, in accordance with their Preferred Pro Rata Portion, (A) an aggregate of 20,000 shares (the "Series D Payment Shares" of Series D Preferred Stock, par value $0.000001 per share of Protagenic (the "Series D Preferred Stock"), and (b) common stock purchase warrants to purchase up to 715,493 shares of common stock. The issuance of the shares of Common Stock, Preferred Stock Payment Shares and Series D Payment Shares occurred on May 16, 2025. Each share of Preferred Stock Payment Shares is convertible into one of Common Stock, subject to certain conditions described in the Exchange Agreement. Each share of Series D Payment Shares is convertible into one of Common Stock, subject to certain conditions described in the Exchange Agreement. The combination is treated as a taxable exchange for U.S. federal income tax purposes.

**LIQUIDITY AND GOING CONCERN**

As of March 31, 2025 and 2024, the Company has a working capital deficit of $4,952,959 and $1,789,166 and has incurred losses since inception of $5,397,606 and has not received revenues from sales of products or services. These factors create substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

The ability of the Company to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations. Management's plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (IN US$)**

**MARCH 31, 2025 AND 2024** 

**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

<u>Basis of Presentation and Principles of Consolidation</u>

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC"). They include the accounts of Phytanix Bio and its wholly-owned subsidiaries ABTI Pharma and its wholly-owned subsidiaries, Phyto and Ferven. All material intercompany transactions and balances have been eliminated.

The Company has historically operated as a subsidiary of Alterola. The consolidated financial statements of the Company are derived from the historical results of operations and historical cost bases of the assets and liabilities associated with Company, plus an allocation of certain expenses incurred by Alterola on its behalf. Certain expenses have been allocated to the Company from Alterola using the specific identification method and certain other expenses if any, were allocated using a proportional allocation method. Management believes that such allocation method is reasonable. Management has determined that it is not practical to estimate what the allocated costs would have been had the Company operated as an unaffiliated entity on a stand-alone basis. Accordingly, the Company's financial position, results of operations and cash flow may have differed materially if the Company had operated as an unaffiliated standalone entity as of and for the periods presented.

The Company has calculated its income tax amounts using a separate return methodology and it has presented these amounts as if it were a separate taxpayer from Alterola for the all periods presented.

All share amounts and per shares have been adjusted retroactively at the beginning of all periods presented to reflect the change in capital structure.

The Company had a March 31 fiscal year end.

<u>Use of Estimates</u>

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company's most significant estimates include foreign currency exchange rates, provisions for deferred income taxes, and criteria used in the valuation of derivative liability.

<u>Cash and Equivalents</u>

For purposes of the consolidated statements of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

<u>Fair Value of Financial Instruments</u>

The Company's financial instruments consist of cash, VAT receivables, accounts payable, accrued liabilities, loans payable – related parties, derivative liabilities and notes payable. The carrying amount of these financial instruments approximates fair value ("FV") due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

FV is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The FV should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the FV of liabilities should include consideration of non-performance risk including our own credit risk.

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (IN US$)**

**MARCH 31, 2025 AND 2024** 

In addition to defining FV, the disclosure requirements around FV establish a FV hierarchy for valuation inputs which is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring FV are observable in the market. Each FV measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the FV measurement in its entirety. These levels are:

Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – inputs are generally unobservable and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability. The FV are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

The carrying value of the Company's financial assets and liabilities which consist of cash, accounts payable and accrued liabilities, and notes payable are valued using level 1 inputs. The Company believes that the recorded values approximate their FV due to the short maturity of such instruments. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments.

<u>Derivative Financial Instruments</u>

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. Management evaluates all of the Company's financial instruments, including warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.

The Company used a Monte Carlo simulation to determine the valuation of the preferred warrants and a Black-Scholes model for the common stock warrants, as applicable, to value the derivative instruments at inception and subsequent valuation dates when needed. The classification of derivative instruments, including whether such instruments should be recorded as liabilities, is remeasured at the end of each reporting period.

<u>Income Taxes</u>

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

<u>Foreign Currency Translation</u>

The financial statements are presented in US Dollars. Transactions with foreign subsidiaries where US dollars are not the functional currency will be recorded in accordance with Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 830 *Foreign Currency Transaction*. According to Topic 830, all assets and liabilities are translated at the exchange rate on the balance sheet date, stockholders' equity is translated at historical rates and statement of operations items are translated at the weighted average exchange rate for the period, and the functional currency of those subsidiaries are in British Pounds (UK). The resulting translation adjustments are reported under other comprehensive income (loss) in accordance with ASC Topic 220, *Comprehensive Income*. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the consolidated statement of operations and comprehensive loss.

<u>Revenue Recognition</u>

The Company recognizes revenue in accordance with ASC Topic 606 Revenue from Contracts with Customers, which requires revenue to be recognized in a manner that depicts the transfer of goods or services to customers in amounts that reflect the consideration to which the entity expects to be entitled in exchange for those goods or services.

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (IN US$)**

**MARCH 31, 2025 AND 2024** 

In accordance with ASU Topic 606 - *Revenue from Contracts with Customers*, the Company recognizes revenue in accordance with that core principle by applying the following steps:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

<u>Loss Per Common Share</u>

Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. As of March 31, 2025, the Company has 715,493 common stock warrants outstanding, 17,000 Series A Preferred shares, and 1,127 Series A Preferred warrants and 2,436 Series B Preferred warrants outstanding. As of March 31, 2024, the Company did not have any potentially dilutive instruments. As of March 31, 2025 the Company had a basic and fully diluted loss per share of $0.67 and a basic and fully diluted loss per share of $0.08, as of March 31, 2024. Basic loss per share is computed by dividing loss available to holders of our common stock (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period, and does not include the impact of any potentially dilutive common stock equivalents since the impact would be anti-dilutive. For the given periods of loss, of the years ended March 31, 2025 and 2024, the basic loss per share equals the diluted earnings per share.

---

| | | |
|:---|:---|:---|
|  | **Potentially Outstanding** <br> **Dilutive Common Shares** | **Potentially Outstanding** <br> **Dilutive Common Shares** |
|  | **For the Year Ended** <br> **March 31, 2025** | **For the Year Ended** <br> **March 31, 2024** |
| **Conversion Feature Shares** |  |  |
| Preferred Shares | 17000 |  |
| Preferred Warrants | 3563 |  |
| Common Warrants | 715493 |  |
| Total potentially outstanding dilutive common shares | 736056 |  |

---

<u>Research and development</u>

We engage in a variety of research and development activities to develop our technologies and work toward the development of a saleable product. When it is determined that the research and development products we are creating have reached a point where saleable products are possible, these amounts are capitalized. As of March 31, 2025 and 2024, there are no capitalized research and development costs.

The research and development costs incurred by the company relate to the following:

● Licenses for patent and know-how (Nano 4 M) - this relates to the company's formulation of Active Pharmaceutical Ingredients ("API") for its lead pharmaceutical programs.

● Protein Technologies Ltd – this relates to the company's research into production of cannabinoids by biosynthesis (as opposed to botanical production by growing plants). The company has genetically modified an organism to produce cannabinoids by fermentation (similar to methodology used for the production of antibiotics).

● Apex Molecular Ltd.- the Company has a number of pharmaceutical development programs using both novel and natural molecules. The Company employs third party chemistry / contract, manufacturing companies such as Apex Molecular Ltd. to synthesize and purify these compounds for their pharmaceutical development programs.

● Acquisition of intellectual property from Alinova Biosciences Ltd.

● Continued patent prosecution and internationalization of company intellectual property.

● Staff costs and consultancy costs relating to research and development.

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (IN US$)**

**MARCH 31, 2025 AND 2024** 

<u>Recent Accounting Pronouncements</u>

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's consolidated results of operations, financial position or cash flow.

In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"), which simplifies the accounting for convertible instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. ASU 2020-06 also requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. This standard will be effective for smaller reporting companies in fiscal years beginning after December 15, 2023, with early adoption permitted. The adoption did not have a material impact on our consolidated financial statements.

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07 ("ASU 2023-07"). ASU 2023-07 improves segment reporting disclosures for public companies. ASU 2023-07 requires more detailed information about reportable segments and expenses including the requirement to disclose qualitative information about factors used to identify reportable segments and quantitative information about profit and loss measures and significant expense categories. ASU 2023-07 was effective for public companies in fiscal years beginning after December 15, 2023. The Company has effective May 15, 2025, entered into an agreement to merge their operating business to Protagenic Therapeutics, and has not yet begun generating revenue from its planned principal operations and operates as a single reportable segment. The chief operating decision maker is the Company's chief executive officer who assesses performance based on total expenses, cash flows, and progress made in the Company's ongoing development efforts. The Company analyzed ASU 2023-07 and determined that the required information is presented within the consolidated financial statements and footnote disclosures herein. The Company does not believe that ASU 2023-07 will have a material impact on the consolidated financial statements.

**NOTE 3 – ACCOUNTS PAYABLE**

Accounts payable consisted of the following on March 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2025** | **March 31, 2024** |
| Accounting and audit fees | $95750 | $170242 |
| Research and development | 865367 | 491329 |
| General and administrative | - | 117467 |
| Total Accounts payable | $961117 | $779038 |

---

**NOTE 4 – ACCRUED EXPENSES**

Accrued expenses consisted of the following on March 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2025** | **March 31, 2024** |
| Accounting and audit fees | $- | $15000 |
| General and administrative | 249063 | 28024 |
| Total Accrued Expenses | $249063 | $43024 |

---

**NOTE 5 – NOTES PAYABLE**

On June 26, 2024, certain investors (the "Financing Investors") and the Company entered into certain Securities Purchase Agreements pursuant to which, among other things, the Financing Investors agreed to purchase (i) certain promissory notes of the Company in the original principal amount of $4,413,650, which only $3,193,650 was raised, (ii) certain warrants to acquire the Company's common shares (Common Warrants"), and (iii) warrants to acquire the Company's Series A and B Preferred Shares.

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (IN US$)**

**MARCH 31, 2025 AND 2024** 

In 2024, the Company closed the Securities Purchase Agreements, pursuant to which the Company issued and sold to the Financing Investors (i) promissory notes in the principal amount of $3,193,650, (ii) three-year warrants to purchase up to 675,613 shares of the Company's common stock at an initial exercise price of $11.00 per share, subject to adjustment; (iii) 1,127 Series A Preferred Warrants; and (iv) 2,436 Series B Preferred Warrants. The notes are non-interest bearing and have a maturity date of June 29, 2025. The Common and Preferred Series A and B Warrants were valued at $993,151, or $1.47 per common warrant, and $159.86 for the Series A preferred warrants and $61.91 for the Series B preferred warrants. As a result of this transaction, the Company recognized $798,412 in original issue discounts that are being amortized over the one-year life of the notes. As of March 31, 2025, $199,603 remains unamortized. All notes payable are reflected in current liabilities.

In addition, the Company recognized a derivative liability of $1,324,126 related to the value of the warrants which have been bifurcated from the notes.

The Company also issued 39,880 Common Stock Warrants as commissions valued at $58,624 which are also considered derivative liabilities.

The fair value of the warrants were based on an independent valuation of the warrants on the measurement date.

**NOTE 6 – DERIVATIVE LIABILITIES**

The Company entered into several convertible notes payable, that terms include variable conversion prices. The Company evaluated these terms and determined that the warrants issued with the notes payable contained characteristics that required the Company to classify them as derivative liabilities. The Derivative Instruments have been accounted for utilizing ASC 815 *"Derivatives and Hedging."* The Company has incurred a liability for the estimated fair value of Derivative Instruments. The estimated fair value of the Derivative Instruments has been calculated based on an independent valuation received that valued these warrants.

The accounting treatment of derivative financial instruments requires that the Company treat the instrument as liability and record the fair value of the instrument as derivatives as of the inception date of the instrument and to adjust the fair value of the instrument as of each subsequent balance sheet date.

The Company used a Monte Carlo simulation to determine the valuation of the preferred warrants and a Black-Scholes model for the common stock warrants, as applicable, to value the derivative instruments at inception and subsequent valuation dates when needed. The classification of derivative instruments, including whether such instruments should be recorded as liabilities, is remeasured at the end of each reporting period. The independent valuation utilized a combination of the market approach and the public offering approach to determine the value of these warrants. These approaches use a number of factors in the quantitative calculation including discounted cash flow, equity volatility, asset volatility and re-levered volatility to determine the value.

The Company determined the derivative liabilities to be a Level 3 fair value measurement.

The input values are as follows:

---

| | |
|:---|:---|
| Exercise price | $11.00-$750.00 |
| Expected dividend yield | 0% |
| Risk free interest rate | 4.18% |
| Expected life in years | 3 |
| Expected volatility | 137% |

---

Activity related to the derivative liabilities for the period ended March 31, 2025 is as follows:

---

| | |
|:---|:---|
| Beginning balance as of March 31, 2024 | $- |
| Bifurcation of warrants | 1324126 |
| Warrants granted for commissions | 58624 |
| Change in fair value of derivative liabilities | - |
| Ending balance as of March 31, 2025 | $1382750 |

---

There were no changes to any of the inputs through March 31, 2025.

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (IN US$)**

**MARCH 31, 2025 AND 2024** 

**NOTE 7 – STOCKHOLDERS' DEFICIT**

On May 16, 2024, the Company authorized the expansion of its share capital to 10,000,000 common shares and 100,000 Preferred shares each with a par value of $0.000000001, and authorized the acquisition of 100% of the share capital of ABTI Pharma by the Company for the consideration of 5,000,000 of the Company's common shares. Accordingly, on May 16, 2024, pursuant to the written consent to action without a meeting of the Company's directors, the Company issued 5,000,000 shares of its common stock to acquire the common stock of ABTI Pharma and its subsidiaries for cash of $200. All share amounts and per shares have been adjusted retroactively at the beginning of all periods presented to reflect the change in capital structure. Accordingly, the Company reflects 5,000,000 common shares issued and outstanding as of March 31, 2024 and 2023.

The Board of Directors resolved on July 31, 2025, to approve the forgiveness of an intercompany loan owed by ABTI Pharma Limited to the Company, in the amount of £317,480.40 GBP ($410,756 USD), effective as of March 31, 2025. The amount was written off as, in accordance with the recommendation of the Company's accountants.

Pursuant to an Exchange Agreement entered into on May 16, 2024, between the Company and EMC2 Capital LLC, a shareholder of Alterola Biotech, the Company issued 800,000 shares of its common stock and 17,000 shares of its Series A preferred stock to EMC2 Capital, LLC in exchange for the return of 13,500,000 common shares of Alterola Biotech, Inc. The value of this transaction was $44,560.

**NOTE 8 – INCOME TAXES**

As of the year ended March 31, 2025, the Company recorded approximately $1,082,158 in deferred tax assets which had a full valuation allowance recorded against them. The deferred tax asset is in the form of net offering loss (NOL) carryforwards of $659,302 in the United States at an estimated tax rate of 21% and $422,856 in the United Kingdom at an estimated tax rate of 19%.

Section 382 of the Internal Revenue Code provides an annual limitation on the amount of federal NOLs and tax credits that may be used in the event of an ownership change. All NOLs are subject to the Section 382 limitation due to the change in control of the Company.

The Company classifies accrued interest and penalties, if any, for unrecognized tax benefits as part of income tax expense. The Company did not accrue any penalties or interest as of March 31, 2025 and 2024.

**NOTE 9 – RELATED PARTY TRANSACTIONS**

**<u>Loans Payable – Related Parties</u>**

The Company leases office space from a company that an officer has an interest. The lease is believed to be at or below market rate and is on a month to month basis. The rent is $2,500 per month. An officer has provided office space as an arm's length transaction with rental at commercial rates. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

During the years ended March 31, 2025 and 2024, several related parties made advances to the Company to fund operating expenses in the amount of $30,816 and $0, respectively. These advances are non – interest bearing and have no specified terms of repayment. The Company has outstanding loans to several related parties throughout the year. As of March 31, 2025 and 2024, the Company owed related parties $748,385 and $1,002,895, respectively.

**NOTE 10 – SUBSEQUENT EVENTS**

In accordance with ASC Topic 855-10, the Company analyzed its operations subsequent to March 31, 2025 to the date these financial statements were issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

On April 7, 2025, the Company entered into a termination agreement, that immediately terminated the Business Combination Agreement with Chain Bridge I, CB Holdings, Inc., CB Merger Sub 1, and CB Merger Sub 2, Inc.

On April 17, 2025, the Company entered into a note with an individual for $168,750, which included a one-time original issue discount of $43,750 with cash proceeds to the Company of $125,000, due upon the consummation of financing that Phytanix Bio is conducting in accordance with the merger with Protagenic.

.

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (IN US$)**

**MARCH 31, 2025 AND 2024** 

On May 15, 2025, Phytanix issued a total of 2,000 shares of Series A convertible preferred stock to management.

On May 15, 2025, Protagenic Therapeutics, Inc., a Delaware corporation (the "Protagenic"), entered into the Share Exchange Agreement (the "Exchange Agreement") with Alterola, EMC2 Capital LLC, a Wyoming limited liability corporation ("EMC2"), the preferred stockholders of Phytanix Bio (the "Preferred Stockholders") and Colin Stott, as the Seller's Representative, pursuant to which Protagenic acquired 100% of the issued and outstanding common shares of Phytanix Bio.. Prior to the Combination, Alterola and EMC2 collectively owned 100% of the issued and outstanding shares of the common shares of Phytanix (the "Shares"), and the Preferred Stockholders collectively owned 100% of the issued and outstanding shares of Series A convertible preferred shares of Phytanix (the "Preferred Shares").

Under the terms of the Exchange Agreement, in exchange for all of the outstanding Shares of Phytanix at the Effective Time, Protagenic issued to Alterola and EMC2, as shareholders of Phytanix, in each case in accordance with their Pro Rata Portion (as defined in the Exchange Agreement), an aggregate of (A) 117,690 shares of Protagenic's common stock, par value $0.0001 per share ("Common Stock"), which shares represented a number of shares equal to no more than 19.99% of the outstanding shares of Common Stock as of immediately before the Effective Time, (B) 5,705 shares of Protagenic's Series C Convertible Preferred Stock, par value $0.000001 per share (the "Series C Preferred Stock"), and (C) 950,000 shares of Protagenic's Series C-1 Convertible Preferred Stock, par value $0.000001 per share (the "Series C-1 Preferred Stock", and together with the Series C Preferred Stock, the "Preferred Stock Payment Shares"). In addition, in exchange for all of the outstanding Preferred Shares of Phytanix at the Effective Time, Protagenic issued to the Preferred Stockholders, in accordance with their Preferred Pro Rata Portion, (A) an aggregate of 20,000 shares (the "Series D Payment Shares" of Series D Preferred Stock, par value $0.000001 per share of Protagenic (the "Series D Preferred Stock"), and (b) common stock purchase warrants to purchase up to 715,493 shares of common stock. The issuance of the shares of Common Stock, Preferred Stock Payment Shares and Series D Payment Shares occurred on May 16, 2025. Each share of Preferred Stock Payment Shares is convertible into one of Common Stock, subject to certain conditions described in the Exchange Agreement. Each share of Series D Payment Shares is convertible into one of Common Stock, subject to certain conditions described in the Exchange Agreement. The combination is treated as a taxable exchange for U.S. federal income tax purposes.

The acquisition of Phytanix Bio, Inc. ("Phytanix Bio") was considered a reverse merger. In accordance with ASC 805-40-45-1, the consolidated financial statements prepared following a reverse acquisition are issued under the name of the legal parent (Protagenic Therapeutics, Inc.) but described in the notes to the financial statements as a continuation of the financial statements of the legal subsidiary (Phytanix Bio), with one adjustment, which is to retroactively adjust the accounting acquirer's legal capital to reflect the legal capital of the accounting acquiree (Protagenic Therapeutics, Inc.). That adjustment is required to reflect the capital of the legal parent. Comparative information presented in the consolidated financial statements also is retroactively adjusted to reflect the legal capital of the legal parent.

Under ASC 805-40-45-2, the consolidated financial statements represent the continuation of the legal subsidiary except for the capital structure, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 assets and liabilities of the legal subsidiary recognized and measured at their precombination carrying amounts;

(b) The
 assets and liabilities of the legal parent recognized and measured in accordance with the guidance in this topic applicable to business
 combinations (ASC 805);

(c) The
 retained earnings and other equity balances of the legal subsidiary before the business combination;

(d) The
 amount recognized as issued equity interests in the consolidated financial statements determined by adding the issued equity interest
 of the legal subsidiary outstanding immediately before the business combination to the fair value of the legal parent determined
 in accordance with the guidance in ASC 805 applicable to business combinations. However, the equity structure reflects the equity
 structure of the legal parent, including the equity interests the legal parent issued to effect the combination. Accordingly, the
 equity structure of the legal subsidiary is restated using the exchange ratio established in the acquisition agreement to reflect
 the number of shares of the legal parent issued in the reverse acquisition.

The primary reasons Phytanix Bio consummated the merger with Protagenic Therapeutics, Inc. were the opportunity to immediately become a public company without the process of doing its own initial public offering, thereby affording it the opportunity to more quickly raise capital and provide liquidity options to its stockholders, and at the same time acquiring the infrastructure required of a public company run by people experienced in investor relations and the public company regulatory compliance.

The estimated allocation of the purchase price of the assets acquired and liabilities assumed for the acquisition by Phytanix Bio of Protagenic Therapeutics, Inc. via the reverse acquisition is still being evaluated.

**PHYTANIX BIO, INC. AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (IN US$)**

**MARCH 31, 2025 AND 2024** 

The Board of Directors resolved on July 31, 2025, to approve the forgiveness of an intercompany loan owed by ABTI Pharma Limited to the Company, in the amount of £317,480.40 GBP ($410,756 USD), effective as of March 31, 2025. The amount was written off , in accordance with the recommendation of the Company's accountants.

Axiom Real-Time Metrics Inc. (Axiom), based in Mississauga, Ontario, was placed into receivership on July 11, 2025, after defaulting on a financing agreement with National Bank of Canada, which was owed approximately C$10.4 million. Subsequently, the company's assets were sold via a court-supervised receivership process, culminating in a transaction transferring substantially all its assets to Sitero Canada Inc., which closed on approximately July 31, 2025. This is relevant to the Company because it reduces the chance that the Company may be able to collect some or all the funds it has claimed it is owed by Axiom.

On August 7, 2025, the Board of Directors approved a change in the Company's fiscal year-end from December 31 to March 31, effective immediately. The Company intends to file a transition report on Form 10-QT with the Securities and Exchange Commission for the transition period beginning April 1, 2025 and ending June 30, 2025.

On August 8, 2025, the Board of Directors of Protagenic Therapeutics, Inc. (the "Company" or "Protagenic") approved a focused restructuring plan (the "Restructuring Plan") to transition to a virtual operating model and concentrate capital on the Company's highest-priority clinical program(s). In approving the Restructuring Plan, the Board of Directors determined that a disciplined cost structure and a sharper focus on near-term value inflection are in the best interests of the Company and its stockholders.

Under the Restructuring Plan, the Company has (i) temporarily suspended expenditures related to its preclinical programs and (ii) initiated a process to evaluate strategic alternatives for those programs, including partnerships and/or out-licensing, with the objective of advancing them with appropriate external funding while preserving cash for the Company's lead clinical assets. The Company is reducing operating expenses, overhead, and headcount primarily associated with preclinical activities.

When fully implemented, the Restructuring Plan is expected to reduce annualized operating expenses by approximately $8 million. The Company expects to incur one-time charges in connection with the Restructuring Plan; however, because key actions remain in process, the Company cannot reasonably estimate the total amount or timing of such charges at this time and will provide an update in a subsequent filing once such amounts are estimable.

Also on August 8, 2025, in connection with the Restructuring Plan, the Board of Directors terminated the employment of (i) Barrett Evans as Chief Executive Officer and President and (ii) Colin Stott as Chief Operating Officer, in each case effective immediately. Messrs. Evans and Stott remain members of the Company's Board of Directors. Any severance or other compensatory agreements, if applicable, will be disclosed when determined.

## Exhibit 99.2

**Exhibit 99.2**

**PROTAGENIC THERAPEUTICS, INC.**

**PRO FORMA COMBINED BALANCE SHEETS**

**March 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **PHYTANIX BIO, INC. AND SUBSIDIARIES** | **PROTAGENIC THERAPEUTICS, INC. AND SUBSIDIARY** | **Adjustments** | **Pro Forma Combined** |
|  | March 31, 2025 | March 31, 2025 | | March 31, 2025 |
| ASSETS |  |  |  |  |
| Current assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash in bank | 14531 | 872960 | 314924 | 1202415 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets |  | 55216 |  | 55216 |
| &nbsp;&nbsp;&nbsp;VAT receivable | 73524 |  |  | 73524 |
| &nbsp;&nbsp;&nbsp;Inventories | 1038 | - |  | 1038 |
| &nbsp;&nbsp;&nbsp;Total current assets | 89093 | 928176 | 314924 | 1332193 |
| &nbsp;&nbsp;&nbsp;Intangible assets |  |  | 1650000 | 1650000 |
| &nbsp;&nbsp;&nbsp;Equipment - net |  | 60474 |  | 60474 |
| Total Assets | 89093 | 988650 | 1964924 | 3042667 |
| LIABILITIES AND STOCKHOLDERS' DEFICIT LIABILITIES: |  |  |  |  |
| Current liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Notes payable, net | 1669921 |  | 2641507 | 4311428 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 961117 | 595109 |  | 1556226 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 249063 | 481870 |  | 730933 |
| &nbsp;&nbsp;&nbsp;Derivative liabilities | 1382750 |  | 554792 | 1937542 |
| &nbsp;&nbsp;&nbsp;Loans payable, related parties | 779201 | - |  | 779201 |
| Total current liabilities | 5042052 | 1076979 | 3196299 | 9315330 |
| Total liabilities | 5042052 | 1076979 | 3196299 | 9315330 |
| Commitments and Contingencies |  |  |  |  |
| STOCKHOLDERS' DEFICIT: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock |  |  | 1 | 1 |
| &nbsp;&nbsp;&nbsp;Common stock |  | 54 | 27 | 81 |
| &nbsp;&nbsp;&nbsp;Additional paid in capital | 455657 | 37784699 | (35908186) | 2332170 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (5397606) | (37743221) | 34546922 | (8593905) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | (11010) | (129861) | 129861 | (11010) |
| &nbsp;&nbsp;&nbsp;Total stockholders' deficit | (4952959) | (88329) | (1231375) | (6272663) |
| &nbsp;&nbsp;&nbsp;Total liabilities and stockholders' deficit | 89093 | 988650 | 1964924 | 3042667 |

---

**PROTAGENIC THERAPEUTICS, INC.**

**PRO FORMA COMBINED STATEMENTS OF OPERATIONS**

**March 31, 2025**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **PHYTANIX BIO, INC. AND SUBSIDIARIES** | **PROTAGENIC THERAPEUTICS, INC. AND SUBSIDIARY** | **Adjustments** | **Pro Forma Combined** |
|  | Year Ended<br>March 31, 2025 | Year Ended<br>March 31, 2025 | | Year Ended<br>March 31, 2025 |
| REVENUES | - | - |  | - |
| OPERATING EXPENSES: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounting and audit fees | 132600 | 257624 |  | 390224 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and Development | 376740 | 2651276 |  | 3028016 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Legal Fees | 183097 | 292918 |  | 476015 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consulting Fees | 667584 | 786843 |  | 1454427 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salaries and wages | 132775 | 1325447 |  | 1458222 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bad debt | 1023235 |  |  | 1023235 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative - other | 77530 | 16216 |  | 93746 |
| TOTAL OPERATING EXPENSES | 2593561 | 5330324 |  | 7923885 |
| LOSS FROM OPERATIONS | (2593561) | (5330324) |  | (7923885) |
| OTHER INCOME (EXPENSES): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expenses/amortization of discount | (1039353) | 37701 |  | (1001652) |
| &nbsp;&nbsp;&nbsp;Foreign currency exchange differences | 41056 |  |  | 41056 |
| &nbsp;&nbsp;&nbsp;Realized gain on marketable securities | - | 51533 |  | 51533 |
| TOTAL OTHER INCOME (EXPENSE) | (998297) | 89234 |  | (909063) |
| LOSS BEFORE INCOME TAXES | (3591858) | (5241090) |  | (8832948) |
| PROVISION FOR INCOME TAXES | - | - |  | - |
| NET LOSS | (3591858) | (5241090) |  | (8832948) |
| NET LOSS PER SHARE: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | (0.67) | (10.02) |  | (16.88) |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 5372474 | 523185 |  | 523185 |
| COMPREHENSIVE LOSS: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | (3591858) | (5241090) |  | (8832948) |
| Other comprehensive loss: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net unrealized gain (loss) on marketable securities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Unrealized foreign currency translation (loss) gain | (27451) | (43059) |  | (70510) |
| Comprehensive loss | (3619309) | (5284149) |  | (8903458) |

---

**PROTAGENIC THERAPEUTICS, INC.**

**PRO FORMA COMBINED STATEMENTS OF OPERATIONS**

**March 31, 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **PHYTANIX BIO, INC. AND SUBSIDIARIES** | **PROTAGENIC THERAPEUTICS, INC. AND SUBSIDIARY** | **Adjustments** | **Pro Forma Combined** |
|  | Year Ended<br>March 31, 2024 | Year Ended<br>March 31, 2024 | | Year Ended<br>March 31, 2024 |
| REVENUES | - | - | - | - |
| OPERATING EXPENSES: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounting and audit fees | 75425 | 155246 |  | 230671 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and Development | 28770 | 3787689 |  | 3816459 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Legal Fees |  | 74387 |  | 74387 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consulting Fees | 105886 | 494878 |  | 600764 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salaries and wages | 124924 | 961522 |  | 1086446 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transaction Costs |  |  | 1117775 | 1117775 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative - other | 68787 | 52314 |  | 121101 |
| TOTAL OPERATING EXPENSES | 403792 | 5526036 | 1117775 | 7047603 |
| LOSS FROM OPERATIONS | (403792) | (5526036) | (1117775) | (7047603) |
| OTHER INCOME (EXPENSES): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expenses/amortization of discount |  | 221450 | -199606 | 21844 |
| &nbsp;&nbsp;&nbsp;Foreign currency exchange differences |  | (76420) |  | (76420) |
| &nbsp;&nbsp;&nbsp;Derivative expense |  |  | (1667525) | (1667525) |
| &nbsp;&nbsp;&nbsp;Change in fair value of derivative liabilities |  |  | (211393) | (211393) |
| &nbsp;&nbsp;&nbsp;Realized gain on marketable securities |  | (625687) |  | (625687) |
| TOTAL OTHER INCOME (EXPENSE) | - | (480657) | (2078524) | (2559181) |
| LOSS BEFORE INCOME TAXES | (403792) | (6006693) | (3196299) | (9606784) |
| PROVISION FOR INCOME TAXES | - | - | - | - |
| NET LOSS | (403792) | (6006693) | (3196299) | (9606784) |
| NET LOSS PER SHARE: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | (0.08) | (18.96) |  | (30.32) |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 5000000 | 316804 |  | 316804 |
| COMPREHENSIVE LOSS: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | (403792) | (6006693) | (3196299) | (9606784) |
| Other comprehensive loss: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net unrealized gain (loss) on marketable securities |  | 532556 |  | 532556 |
| &nbsp;&nbsp;&nbsp;Unrealized foreign currency translation (loss) gain | (27791) | (85126) |  | (112917) |
| Comprehensive loss | (431583) | (5559263) | (3196299) | (9187145) |

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**UNAUDITED PRO FORMA FINANCIAL STATEMENTS OF PROTAGENIC THERAPEUTICS, INC.**

References to "Protagenic", the "Company", "we", "us" and "our" mean Protagenic Therapeutics, Inc. and its consolidated subsidiaries, unless the context otherwise requires.

*Pro Forma Financial Statements*

As reported on our Current Report on Form 8-K filed with the Securities and Exchange Commission, May 19, 2025, On May 15, 2025, Protagenic Therapeutics, Inc., a Delaware corporation (the "Company"), entered into the Share Exchange Agreement (the "Exchange Agreement") with Alterola Biotech Inc., a Nevada corporation ("Alterola"), EMC2 Capital LLC, a Wyoming limited liability corporation ("EMC2"), the preferred stockholders of Phytanix set forth on Schedule A thereto (the "Preferred Stockholders") and Colin Stott, as "Seller's Representative (as defined therein), pursuant to which the Company acquired 100% of the issued and outstanding common shares of Phytanix Bio, a Nevada corporation ("Phytanix") (such transaction, the "Combination"). Prior to the Combination, Alterola and EMC2 collectively owned 100% of the issued and outstanding shares of the common shares of Phytanix (the "Shares"), and the Preferred Stockholders collectively owned 100% of the issued and outstanding shares of Series A convertible preferred shares of Phytanix (the "Preferred Shares").

Under the terms of the Exchange Agreement, upon the consummation of the Combination (the "Closing"), in exchange for all of the outstanding Shares of Phytanix at the Effective Time, the Company will issue to Alterola and EMC2, as shareholders of Phytanix, in each case in accordance with their Pro Rata Portion (as defined in the Exchange Agreement), an aggregate of (A) 117,690 shares of the Company's common stock, par value $0.0001 per share ("Common Stock"), which shares shall represent a number of shares equal to no more than 19.99% of the outstanding shares of Common Stock as of immediately before the Effective Time, (B) 5,705 shares of the Company's Series C Convertible Preferred Stock, par value $0.000001 per share (the "Series C Preferred Stock"), and (C) 950,000 shares of the Company's Series C-1 Convertible Preferred Stock, par value $0.000001 per share (the "Series C-1 Preferred Stock", and together with the Series C Preferred Stock, the "Preferred Stock Payment Shares") (as described below). In addition, upon the Closing, in exchange for all of the outstanding Preferred Shares of Phytanix at the Effective Time, the Company will issue to the Preferred Stockholders, in accordance with their Preferred Pro Rata Portion (as defined in the Exchange Agreement), (A) an aggregate of 20,000 shares (the "Series D Payment Shares" of Series D Preferred Stock, par value $0.000001 per share of the Company (the "Series D Preferred Stock") (as described below), and (b) common stock purchase warrants to purchase up to 715,493 shares of common stock. The issuance of the shares of Common Stock, Preferred Stock Payment Shares and Series D Payment Shares occurred on May 16, 2025. Each share of Preferred Stock Payment Shares is convertible into one of Common Stock, subject to certain conditions described in the Exchange Agreement. Each share of Series D Payment Shares is convertible into one of Common Stock, subject to certain conditions described in the Exchange Agreement. The Combination is intended to be treated as a taxable exchange for U.S. federal income tax purposes.

The following unaudited pro forma combined financial statements, which are referred to as the unaudited pro forma financial statements, have been prepared to assist in the analysis of financial effects of the Merger Transaction. The unaudited pro forma combined statements of operations, which are referred to as the unaudited pro forma statements of operations, for the year ended March 31, 2025 and year ended March 31, 2024, combine the historical consolidated statements of operations of Protagenic and Phytanix, giving effect to the Merger Transaction, as if they had been completed on April 1, 2023, the beginning of the earliest period presented. The unaudited pro forma combined statements of operations for the year ended March 31, 2025 were derived from the unaudited condensed consolidated financial statements of Protagenic for the year ended March 31, 2025, and the unaudited financial statements of Phytanix for the year ended March 31, 2025. The unaudited pro forma combined balance sheet, which is known as the unaudited pro forma balance sheet, combines the historical balance sheets of Protagenic and Phytanix as of March 31, 2025, giving effect to the Merger Transaction, as if they had been completed on March 31, 2025.

Effective May 15, 2025, Protagenic and Phytanix completed the Merger. In accordance with the guidance under Accounting Standards Codification Topic 805: Business Combinations, the Merger transactions are accounted for as an asset acquisition and reverse merger. The assets and liabilities of transferred between entities under common control were recorded at a historical cost basis.

Assumptions and estimates underlying the adjustments to the unaudited pro forma financial statements, which are referred to as the pro forma adjustments, are described in the accompanying notes. The historical consolidated financial statements have been adjusted in the unaudited pro forma financial statements to give effect to pro forma events that are (1) directly attributable to the Merger Transaction; (2) factually supportable; and (3) with respect to the unaudited pro forma statements of operations, expected to have a continuing impact on the combined results of Protagenic and Phytanix following the Merger Transaction. The unaudited pro forma financial statements have been presented for illustrative purposes only and are not necessarily indicative of the operating results and financial position that would have been achieved had the Merger Transaction occurred on the dates indicated. Further, the unaudited pro forma financial statements do not purport to project the future operating results or financial position of the combined company following the Merger Transaction. The unaudited pro forma financial statements include assets and liabilities of Protagenic adjusted for Protagenic's historical cost basis. The final purchase price allocation may be materially different than that reflected in the pro forma purchase price allocation presented herein.

The unaudited pro forma financial statements, although helpful in illustrating the financial characteristics of the combined company under one set of assumptions, do not reflect the benefits of expected cost savings (or associated costs to achieve such savings), opportunities to earn additional revenue, or other factors that may result as a consequence of the Merger Transaction and, accordingly, do not attempt to predict or suggest future results. Further, the unaudited pro forma financial statements do not reflect (i) any other acquisition subsequent to the balance sheet date presented or (ii) the effect of any regulatory actions that may impact the results of the combined partnership following the Merger Transaction.

The unaudited pro forma financial statements have been developed from and should be read in conjunction with:

● the accompanying notes to the unaudited pro forma financial statements;

● the historical audited consolidated financial statements of Phytanix for the year ended March 31, 2025

● the historical audited consolidated financial statements of Protagenic for the year ended December 31, 2025

● the historical unaudited condensed financial statements of Protagenic as of and for the three months ended March 31, 2025

● The pro forma financial statements include the impact of the merger as if they occurred at the inception of each relevant period reported.

**PROTAGENIC THERAPEUTICS, INC.**

**NOTES TO PROFORMA FINANCIAL STATEMENTS**

**(Unaudited)**

**1. BASIS OF PRO FORMA PRESENTATION**

The unaudited pro forma balance sheet has been derived from the historical financial statements of Protagenic Therapeutics, Inc. (the "Company") after giving effect to the acquisition with Phytanix Bio, Inc. and its wholly-owned subsidiaries which closed on May 15, 2025.

Historical financial information has been adjusted in the pro forma balance sheet and statements of operations to give effect to pro forma events that are: (1) directly attributable to the Acquisition; (2) factually supportable; and (3) expected to have a continuing impact on the Company's balance sheet and results of operations.

The accompanying unaudited pro forma combined balance sheet has been presented as of March 31, 2025. The unaudited pro forma combined statements of operations for the years ended March 31, 2025, and March 31, 2024. have been presented as if the acquisition had occurred as if the Merger Transaction took place at the beginning of the periods presented.

The unaudited pro forma consolidated statements do not necessarily represent the actual results that would have been achieved had the companies been combined at the beginning of the year, nor may they be indicative of future operations. These unaudited pro forma financial statements should be read in conjunction with the companies' respective historical financial statements and notes included thereto.

**2. PRO FORMA ADJUSTMENTS**

The adjustments included in the pro forma balance sheet are as follows:

(1) Issuance of shares to Phytanix shareholders for the merger and other effects of the merger.

(2) To record the sale of Common Stock for $51,215 that occurred prior to the merger.

(3) To record the exercise of warrants for $263,721 that occurred prior to the merger.