10-K: Protagenic Therapeutics Faces Delisting, Clinical Trials Advance

Protagenic Therapeutics, Inc. filed its Form 10-K for the fiscal year ended March 31, 2026, detailing clinical trial progress for PT00114, but also announcing its delisting from Nasdaq and ongoing financial challenges.

Summary

• Protagenic Therapeutics, Inc. has filed its annual report on Form 10-K for the fiscal year ended March 31, 2026.
• The company is focused on developing PT00114, a synthetic form of TCAP-1, for stress-related neuropsychiatric and mood disorders.
• A Phase I trial for PT00114 has been completed, with a Phase 2 study anticipated in late 2026.
• The company experienced a significant financial loss of $3,591,858 in the year ended March 31, 2025, and a net income of $1,367,977 in the year ended March 31, 2026, with an accumulated deficit of $4,029,629 as of March 31, 2026.
• Protagenic Therapeutics' common stock was delisted from the Nasdaq Capital Market effective January 5, 2026, and now trades on the OTCQB.
• The company identified material weaknesses in its internal controls over financial reporting, including a lack of segregation of duties and insufficient risk assessment.
• The company has a history of losses and expects to continue incurring losses, with current cash resources projected to fund operations only until the end of the third quarter of 2026.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as having a negative sentiment due to the company's delisting from Nasdaq, ongoing financial losses, and material weaknesses in internal controls, despite progress in clinical development.

Positives

• Completed Phase I trial for PT00114, with positive topline safety results from the multiple-dose study.
• Anticipates commencing a Phase 2 study in late 2026 for PT00114 in patients with chronic stress-related psychiatric disorders.
• Secured exclusive, worldwide rights to PT00114 through a license agreement with the University of Toronto.
• Developing follow-on compounds in the TCAP family.
• The company's lead compound, PT00114, has demonstrated efficacy in preclinical animal models for depression, anxiety, substance abuse, addiction, and PTSD.
• The company has a strategy to advance PT00114 through clinical trials and explore additional stress-related indications.

Negatives

• The company's common stock was delisted from the Nasdaq Capital Market effective January 5, 2026, and now trades on the OTCQB, reducing liquidity.
• The company incurred a net loss of $3,591,858 for the year ended March 31, 2025, and has an accumulated deficit of $4,029,629 as of March 31, 2026.
• Material weaknesses in internal controls over financial reporting were identified, including lack of segregation of duties and insufficient risk assessment.
• Current cash resources are projected to fund operations only until approximately the end of the third quarter of 2026, necessitating future capital raises.
• The company has no approved products and has generated no product revenue.
• The company has no sales, marketing, or distribution capabilities.
• The company's stock is subject to penny stock rules, which can limit trading activity and liquidity.

Risks

• The company's financial statements have been prepared on a going concern basis, and there is substantial doubt about its ability to continue as a going concern.
• Failure to obtain necessary capital to fund operations could lead to delays or cessation of operations.
• Clinical trials may experience delays or failures, impacting regulatory approval and commercialization.
• Reliance on third parties for clinical studies and manufacturing could lead to disruptions.
• The company has no experience in commercializing products, which could delay product launch and revenue generation.
• Intellectual property rights may not be adequately protected or may be challenged by competitors.
• The market price of the company's common stock is volatile and subject to significant fluctuations.
• The delisting from Nasdaq impairs access to capital markets and may increase the cost and difficulty of raising capital.

Future Outlook

The company anticipates continuing to incur significant expenses and losses for the foreseeable future as it advances its neuropeptide drug development program, particularly for PT00114. Current cash resources are expected to fund operations until approximately the end of the third quarter of 2026, necessitating the need for additional capital. The company is exploring strategic and financing alternatives, including partnerships, royalty-based financing, and other business development opportunities.

Management Comments

• We believe these stress-related disorders are suitable indications for the use of Protagenic Therapeutics neuropeptide-based drug candidates.
• We believe this novel mechanism of action can provide an attractive therapeutic profile for patients who are not fully responsive to currently available therapies.
• Management concluded that, during the period covered by this report, our internal controls and procedures were not effective to detect the inappropriate application of GAAP.

Industry Context

StockSavvy.ai notes that Protagenic Therapeutics operates in the highly competitive biopharmaceutical sector, focusing on unmet needs in neuropsychiatric and mood disorders. The company's approach with PT00114 targets stress-related pathways, a complex area with significant market potential but also high development risks and competition from established pharmaceutical companies.

Comparison to Industry Standards

• The company's lead compound, PT00114, targets TCAP-1, a peptide that dampens stress responses, a novel mechanism compared to many existing treatments for depression and anxiety which often target neurotransmitter systems.
• Preclinical data suggests PT00114 has a rapid onset of action and long-lasting effects, with a favorable safety profile compared to some current therapies like atypical antipsychotics and benzodiazepines.
• The company's strategy to develop additional TCAP family compounds aims to build a broader pipeline, a common strategy in the biopharmaceutical industry to diversify risk and leverage platform technology.
• The company's reliance on third-party contract research organizations (CROs) for preclinical studies and clinical trials is standard practice in the industry due to the high cost and specialized nature of these activities.

Management Changes

Legal Proceedings

• Protagenic Therapeutics, Inc. v. Alterola Biotech Inc., et al., Case No. 2025-1238-KMM, pending in the Court of Chancery of the State of Delaware, which was settled and unwound.
• No other legal proceedings, government actions, administrative actions, investigations or claims are pending against the company that are expected to have a material adverse effect.

Related Party Transactions

• The company utilizes office space provided by Agenus, Inc., where the Executive Chairman, Garo H. Armen, is also CEO and Chairman.
• Zack Armen, son of Garo H. Armen, assisted with investor presentations and received stock options for his services.
• During the year ended March 31, 2026, the company owed $0 to related parties, compared to $779,201 owed as of March 31, 2025.
• Advances were received from related parties totaling $62,347 in FY2026 and $187,062 in FY2025.

Stakeholder Impact

• Shareholders may experience dilution due to future equity issuances and a decline in stock price following delisting.
• Employees may be impacted by workforce reductions related to the restructuring plan.
• Customers, suppliers, and other stakeholders may perceive the delisting and financial challenges negatively, potentially affecting relationships and business operations.

Next Steps

• Advance PT00114 through clinical trials in treatment-resistant depression, substance use disorder, generalized anxiety disorder, and/or post-traumatic stress disorder.
• Develop additional product candidates from the TCAP family.
• Explore efficacy in additional stress-related neuropsychiatric, neurodegenerative, and mood disorders.
• Assess strategic partnership opportunities, including in important international markets.
• Strengthen the IP position in neuropsychiatry.
• Re-submit IND application later in 2026 for Phase IIa portion of the clinical study.
• Commence multiple dose portion of Phase Ib study for PT00114 in Q4 2026.
• Initiate Phase IIa study for PT00114 in Q2 2027.

Key Dates

Recommendation

While the company is making progress in its clinical development for PT00114, the delisting from Nasdaq, material weaknesses in internal controls, and ongoing financial losses present significant risks. The company's ability to secure future funding and successfully navigate clinical trials and regulatory approvals remains uncertain. Therefore, a 'hold' recommendation is appropriate, pending further positive developments in clinical data and financial stability.

Keywords

Protagenic Therapeutics, PT00114, TCAP-1, Neuropsychiatric disorders, Depression, Anxiety, PTSD, Clinical trials