10-Q 1 v378256_10q.htm QUARTERLY REPORT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2014

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

For the transition period from __________________ to __________________

Commission File Number: 333-172647

Neurotrope, Inc.

(Exact name of registrant as specified in its charter)


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

10732 Hawk’s Vista Street

Plantation, FL 33324

945-632-6630

(Registrant’s telephone number, including area code)

Not Applicable

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No o (Note: The registrant is a voluntary filer of reports under Section 13 or 15(d) of the Securities Exchange Act of 1934; the registrant has filed during the preceding 12 months all reports it would have been required to file by Section 13 or 15(d) of the Securities Exchange Act of 1934 if the registrant had been subject to one of such Sections.)

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x

As of May 14, 2014, there were 21,889,006 shares of the registrant’s common stock, $ 0.0001 par value per share, issued and outstanding.

TABLE OF CONTENTS

		Page No.
PART I – FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements for the three months ended March 31, 2014 (unaudited)

	Condensed Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013 (unaudited)	4

	Condensed Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013, and for the period from October 21, 2012 (inception) to March 31, 2014 (unaudited)	5

	Condensed Consolidated Statements of Changes in Shareholders’ Deficit for the period from October 21, 2012 (inception) to March 31, 2014 (unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013, and for the period from October 21, 2012 (inception) to March 31, 2014 (unaudited)	7

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	22

Item 4.	Controls and Procedures.	22

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	23

Item 1A.	Risk Factors.	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	23

Item 3.	Defaults Upon Senior Securities.	23

Item 4.	Mine Safety Disclosures.	23

Item 5.	Other Information.	23

Item 6.	Exhibits.	24

	Signatures	25

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this report contain or may contain forward-looking statements. These statements, identified by words such as “plan”, “anticipate”, “believe”, “estimate”, “should”, “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to secure suitable financing to continue with our existing business or change our business and conclude a merger, acquisition or combination with a business prospect, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this report in its entirety, including but not limited to our financial statements and the notes thereto and the risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the Securities and Exchange Commission (the “SEC”). We advise you to carefully review the reports and documents we file from time to time with the SEC, particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

OTHER INFORMATION

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

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Neurotrope, Inc.

(A Development Stage Company)

Condensed Consolidated Balance Sheets

(Unaudited)

	March 31,			December 31,
	2014			2013
ASSETS

CURRENT ASSETS
Cash	$	13,569,519		$	15,211,744
Prepaid expenses		78,469			87,059
TOTAL CURRENT ASSETS		13,647,988			15,298,803

TOTAL ASSETS	$	13,647,988		$	15,298,803

LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued expenses - related party	$	115,148		$	251,779
Accounts payable and accrued expenses		162,030			156,637
TOTAL CURRENT LIABILITIES		277,178			408,416

Commitments and contingencies

Convertible redeemable preferred stock, Series A, $.0001 par value, 50,000,000 shares authorized;
22,851,000 and 23,000,000 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively.
Liquidation preference of $22,851,000 plus dividends accruable at 8% per annum of $1,471,050 at March 31, 2014.
Liquidation preference of $23,000,000 plus dividends accruable at 8% per annum of $1,023,616 at December 31, 2013.		19,811,194			19,943,572

SHAREHOLDERS' DEFICIT
Common stock - 300,000,000 shares authorized, $.0001 par value; 21,889,006 issued and outstanding at March 31, 2014; 21,740,006 shares issued and outstanding at December 31, 2013		2,189			2,174
Additional paid-in capital		4,277,290			3,974,007
Deficit accumulated during the development stage		(10,719,863	)		(9,029,366	)

TOTAL SHAREHOLDERS' DEFICIT		(6,440,384	)		(5,053,185	)

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$	13,647,988		$	15,298,803

See accompanying notes to condensed consolidated financial statements.

Neurotrope, Inc.

(A Development Stage Company)

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended March 31, 2014			Three Months Ended March 31, 2013			Period from October 31, 2012 (inception) to March 31, 2014

OPERATING EXPENSES:
Research and development - related party	$	651,859		$	-		$	3,002,994
General and administrative - related party		93,763			438,686			4,652,639
General and administrative		949,304			79,805			3,067,868
TOTAL OPERATING EXPENSES		1,694,926			518,491			10,723,501

OTHER INCOME:
Interest income		4,429			-			5,807
Net loss before income taxes		(1,690,497	)		(518,491	)		(10,717,694	)
Provision for income taxes		-			-			-
Net loss	$	(1,690,497	)	$	(518,491	)	$	(10,717,694	)

PER SHARE DATA:
Basic and diluted loss per common share	$	(0.08	)	$	(0.02	)
Basic and diluted weighted average common shares outstanding		21,881,000			21,690,000

See accompanying notes to condensed consolidated financial statements.

Neurotrope, Inc.

(A Development Stage Company)

Condensed Consolidated Statements of Changes in Shareholders’ Deficit

(Unaudited)

							Deficit
							Accumulated
					Additional		During the
	Common Stock				Paid-In		Development
	Shares		Amount		Capital		Stage			Total
Balance, October 31, 2012 (Inception)		2,690,400	$	269	$	-	$	(269	)	$	-

Issuance of common stock		19,000,006		1,900		-		(1,900	)		-

Net loss		-		-		-		(1,437,793	)		(1,437,793	)

Balance, December 31, 2012		21,690,406		2,169		-		(1,439,962	)		(1,437,793	)

Issuance of common stock for consulting fees		49,600		5		44,635		-			44,640

Stock based compensation		-		-		3,122,944		-			3,122,944

Issuance of common stock warrants		-		-		806,428		-			806,428

Net loss		-		-		-		(7,589,404	)		(7,589,404	)

Balance December 31, 2013		21,740,006		2,174		3,974,007		(9,029,366	)		(5,053,185	)

Conversion of Series A preferred stock to common stock		149,000		15		132,363		-			132,378

Stock based compensation		-		-		170,920		-			170,920

Net loss		-		-		-		(1,690,497	)		(1,690,497	)

Balance, March 31, 2014		21,889,006	$	2,189	$	4,277,290	$	(10,719,863	)	$	(6,440,384	)

See accompanying notes to condensed consolidated financial statements.

Neurotrope, Inc.

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

							Period from
							October 31,
	Three Months			Three Months			2012
	ended			ended			(inception) to
	March 31, 2014			March 31, 2013			March 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,690,497	)	$	(518,491	)	$	(10,717,694	)
Adjustments to reconcile net loss to net cash used by operating activities
Stock based compensation		170,920			-			3,293,864
Consulting services paid by issuance of common stock		-			-			44,640
Change in assets and liabilities
Decrease (Increase) in prepaid expenses		8,590			(1,500	)		(78,469	)
(Decrease) increase in accounts payable and accrued expenses - related party		(136,631	)		(16,225	)		115,148
(Decrease) increase in accounts payable and accrued expenses		5,393			(188,780	)		162,030
Total adjustments		48,272			(206,505	)		3,537,213
Net Cash Used by Operating Activities		(1,642,225	)		(724,996	)		(7,180,481	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of preferred stock, net of transaction costs		-			8,190,970			20,750,000
Repayment of advances from related party		-			(3,195	)		-

Net Cash Provided by Financing Activities		-			8,187,775			20,750,000

NET (DECREASE) INCREASE IN CASH		(1,642,225	)		7,462,779			13,569,519

CASH AT BEGINNING OF PERIOD		15,211,744			-			-

CASH AT END OF PERIOD	$	13,569,519		$	7,462,779		$	13,569,519

DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:

Conversion of Series A convertible redeemable preferred stock to common stock	$	132,378		$	-		$	-

See accompanying notes to condensed consolidated financial statements.

Neurotrope, Inc.

(a Development Stage Company)

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 – Organization and Nature of Planned Business:

References in these notes to the unaudited consolidated financial statements to “Neurotrope, Inc.,” “we,” “us,” “our Company” refer to Neurotrope, Inc. and its consolidated subsidiary Neurotrope Biosciences, Inc. (“NBI”). NBI was incorporated in Delaware on October 31, 2012. NBI was formed to advance new therapeutic and diagnostic technologies in the field of neurodegenerative disease, primarily Alzheimer’s Disease. NBI plans to collaborate with the Blanchette Rockefeller Neurosciences Institute (“BRNI”), a related party, in this process. The exclusive rights to the licensed technology transferred to the Company on February 28, 2013 (see Note 2).

The Merger is being accounted for as a reverse-merger and recapitalization with NBI as the acquirer for financial reporting purposes and Neurotrope, Inc. as the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger are those of NBI and are recorded at the historical cost basis of NBI and the consolidated financial statements after completion of the Merger include the assets and liabilities of NBI and Neurotrope, Inc., and the historical operations of Neurotrope, Inc. and NBI from the closing date of the Merger. The stockholders’ equity section has been retroactively restated for all periods presented to reflect the accounting effect of the reverse merger transaction on the basis of the 1:1 exchange ratio on the Merger date. All references to “we,” ”our,” or the “Company” in these financial statements refer to operations and capital transactions of NBI for all periods prior to the Merger.

As a result of the Reverse Merger, Neurotrope, Inc. discontinued its pre-Reverse Merger business and acquired the business of NBI, and will continue the existing business operations of NBI as a publicly-traded company.

Note 2 – Basis of Presentation

The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for the interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Results for the three month periods ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.

Note 3 – Contractual Commitments:

From January 1, 2013 through February 28, 2013, the Company compensated its President under an independent contractor agreement at the rate of $20,833 per month (see Note 4). On February 25, 2013, the Company executed a four-year employment agreement, effective March 1, 2013, with its President. This agreement provides for an annual salary of $250,000 and annual bonus of $50,000, which shall increase to an annual salary of $300,000 and an annual bonus of $100,000 effective as of the later of (a) February 28, 2015 or (b) the closing by the Company of a Series B Preferred Stock financing.

Neurotrope, Inc.

(a Development Stage Company)

Notes to Unaudited Condensed Consolidated Financial Statements

Effective February 28, 2013, the Company executed an agreement with Ramat Consulting Corp. (“Ramat”), a related party, for consulting services, including business development and marketing consulting, for a five-year period, subject to annual renewals thereafter. Ramat's annual fee is $50,000, payable in monthly installments of $4,167, plus pre-approved travel and other reimbursable expenses. Ramat also received to an option, with a term of ten years, to purchase 300,000 shares of common stock of the Company at an exercise price of $1.00 per share. The option shall be deemed to have vested with respect to 20% of the shares as of February 28, 2013, and the balance shall vest on a daily basis over the four-year period beginning on February 28, 2013. An entity related to Ramat purchased one million shares of Series A preferred stock on the effective date of this agreement.

Effective June 2, 2013, the Company executed a consulting agreement with Medical Cash Management Solutions, LLC (“MCMS”) for services as the Company's Chief Financial Officer, on an independent contractor basis, through November 30, 2013 at a fee of $20,000 per month plus reimbursable expenses. This agreement is subject to renewal terms as agreed to by the parties.

On October 1, 2013, the Company canceled its agreement with MCMS and executed a four-year employment agreement, effective October 1, 2013, with its Chief Financial Officer. This agreement provides for an annual salary of $240,000 which shall increase to an annual salary of $275,000 beginning January 1, 2015. In addition, the agreement provides for a $35,000 bonus for year ended December 31, 2013, a $50,000 bonus for year ended December 31, 2014 and a targeted bonus of 50% of base salary for all subsequent years. In addition, on October 1, 2013 the Board granted a qualified stock option to the CFO under the Company’s 2013 Equity Incentive Plan to purchase 650,000 shares of the Company’s common stock, with a term of ten years, exercisable at $1.00 per share. These options vest 25% per year over four years, with accelerated vesting of 25% upon a termination without cause or for good reason.

On January 2, 2014, the Company executed a one-year employment letter which is renewable annually, with NBI’s Vice President – Regulatory Affairs. This agreement provides for an annual salary of $195,000 which shall increase at the discretion of the Company’s Compensation Committee. In addition, the offer letter provides for a discretionary bonus of up to 20% of base salary for all years. In addition, on January 23, 2014, the Company’s Board of Directors granted a qualified stock option to its VP – Regulatory Affairs under the Company’s 2013 Equity Incentive Plan to purchase 75,000 shares of the Company’s common stock, with a term of ten years, exercisable at $1.76 per share. These options vest 20% per year over five years.

On January 16, 2014, the Company executed a four-year employment letter, with NBI’s Vice President – Commercial Operations. This agreement provides for an annual salary of $210,000 which shall increase at the discretion of the Company’s Compensation Committee. In addition, the offer letter provides for a discretionary bonus of up to 35% of base salary for all years. In addition, on January 23, 2014, the Company’s Board of Directors granted a qualified stock option to its VP – Commercial Operations under the Company’s 2013 Equity Incentive Plan to purchase 100,000 shares of the Company’s common stock, with a term of ten years, exercisable at $1.76 per share. These options vest 20% per year over five years.

On January 22, 2014, the Company executed a four-year employment agreement, with NBI’s Vice President and Chief Medical Officer. This agreement provides for an annual salary of $210,000 which shall increase at the discretion of the Company’s Compensation Committee. In addition, the offer letter provides for a discretionary bonus of up to 35% of base salary for all years. In addition, on January 23, 2014, the Company’s Board of Directors granted a qualified stock option to its VP – Commercial Operations under the Company’s 2013 Equity Incentive Plan to purchase 125,000 shares of the Company’s common stock, with a term of ten years, exercisable at $1.76 per share. These options vest 25% per year over four years, with accelerated vesting of 25% upon a termination without cause or for good reason.

Neurotrope, Inc.

(a Development Stage Company)

Notes to Unaudited Condensed Consolidated Financial Statements

Note 4 - Summary of Significant Accounting Policies:

Development Stage:

The Company is considered to be a development stage company, as defined by Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 915-10, in that the Company is devoting substantially all of its efforts to establishing a new business where planned principal operations have commenced, but no revenues have been derived from these operations.

In addition, the Company’s licensed technology may not be ready for commercialization for several years, if at all. The Company expects to continue to incur losses at least until commercialization, because it anticipates that its expenditures on research and development and administrative activities will significantly exceed any potential revenues during the period. The Company cannot predict when, if ever, it will become profitable.

Use of Estimates:

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

Cash and Cash Equivalents:

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less when purchased to be cash equivalents. At March 31, 2014, the Company’s cash balances exceed the current insured amounts under the Federal Deposit Insurance Corporation.

Research and Development Costs:

All research and development costs, including costs to maintain or expand the patent portfolio which do not meet the criteria for capitalization are expensed when incurred. FASB ASC Topic 730 requires companies involved in research and development activities to capitalize non-refundable advance payments for such services pursuant to contractual arrangements because the right to receive those services represents an economic benefit. Such capitalized advances will be expensed when the services occur and the economic benefit is realized. There were no capitalized research and development services at March 31, 2014 and December 31, 2013.

Income Taxes:

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due and deferred taxes. Deferred taxes are recognized for differences between the bases of assets and liabilities for financial statement and income tax purposes and the tax effects of net operating loss and other carry forwards. The deferred tax assets and liabilities represent the future tax consequences of those differences and carry forwards, which will either be taxable or deductible when the related assets, liabilities or carry forwards are recovered or settled. Deferred tax assets are reduced by a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Neurotrope, Inc.

(a Development Stage Company)

Notes to Unaudited Condensed Consolidated Financial Statements

Uncertain Tax Positions:

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

The Company has concluded that there are no significant uncertain tax positions requiring recognition in the accompanying financial statements. The tax period that is subject to examination by major tax jurisdictions is from October 31, 2012 (inception) through December 31, 2013.

In the event the Company was to receive an assessment for interest and/or penalties, it will be classified in the financial statements as selling, general and administrative expense when assessed.

Risks and Uncertainties:

The Company operates in an industry that is subject to rapid technological change, intense competition and significant government regulation. The Company’s operations are subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risks including the potential for business failure.

Stock Compensation:

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

Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model.

Note 5 – Related Party Transactions:

A director of the Company is both the president and a director of BRNI. These current and former directors are stockholders of a corporation, Neuroscience Research Ventures, Inc. (“NRVI”) that currently owns 41.2% of the Company's outstanding common stock.

Neurotrope, Inc.

(a Development Stage Company)

Notes to Unaudited Condensed Consolidated Financial Statements

Effective October 31, 2012, the Company executed a Technology License and Services Agreement with BRNI, a related party, and two entities affiliated with BRNI (the “Agreement”). Under the terms of the Agreement, BRNI provides research services and grants the Company the exclusive and nontransferable license right to certain patent and intellectual property which became effective upon the Company's completion of a Series A Preferred Stock financing generating net proceeds to the Company of at least $8,000,000 on February 28, 2013. The Agreement terminates on the latter of the date (i) the last of the licensed patent expires, is abandoned, or is declared unenforceable or invalid or (ii) the last of the intellectual property enters the public domain.

The research services provided under the Agreement commenced on April 2, 2012. The Agreement requires the Company to reimburse BRNI for services rendered (the “Services Reimbursement”) on a pro-rated, thirty month basis, with respect to the period of time elapsed from April 2, 2012 through the date of the Series A Preferred Stock financing on February 28, 2013. BRNI invoiced the Company $1,198,696 for service reimbursements through December 31, 2012 and an additional $266,666 from January 1, 2013 to February 28, 2013.

After the initial Series A Preferred Stock financing, the License Agreement requires the Company to enter into scope of work agreements with BRNI, the preferred service provider for any research and development services or other related scientific assistance and support services. The Company shall not engage any other person other than BRNI to perform research or development services or other related scientific assistance without prior written consent of BRNI with such consent not unreasonably withheld. BRNI and Neurotrope may agree to have a third party provide services identical or similar to such services to Neurotrope in the case where BRNI is demonstrably unable to do so or such third party is demonstrably in a superior position to do so.

In addition to the fees under the services reimbursement and scope of work agreements, the Agreement requires the Company to pay BRNI a “Fixed Research Fee”, commencing the date that the Company completes a Series B Preferred Stock financing resulting in net proceeds of at least $25,000,000 (the “Series B Financing”). The fixed research fee is (i) a pro- rata amount of $1,000,000 in the year the Company completes such financing (ii) $1,000,000 per year for five calendar years subsequent to such financing and (iii) an annual fixed research fee in an amount to be negotiated and agreed upon no later than 90 days prior to the end of the fifth calendar year following the completion of such financing to be paid with respect to each remaining calendar year during the term of the Agreement. The Company had not completed this Series B Financing at March 31, 2014 and, accordingly, no such fee was due as of that date.

The Agreement also requires the payment of royalties ranging between 2% and 5% of the Company’s revenues generated from the licensed patents and other intellectual property, dependent upon the percentage ownership that NRVI holds in the Company. Under the Agreement, the Company is required to prepay royalty fees at a rate of 5% of all investor funds raised in the Series A or Series B Preferred Stock financings or any subsequent rounds of financing prior to a public offering, less commissions. On March 25, 2013, the Company prepaid $409,549 in royalties under the Agreement and paid the remainder due of $60,349 in July 2013 relating to the May 7, 2013 Series A preferred stock financing. On August 29, 2013, the Company paid $520,252 in prepaid royalties relating to the August 23, 2013 Series A preferred stock financing. On October 4, 2013, the Company paid $48,600 in prepaid royalties relating to the Series A preferred stock financing. These royalties are expensed in “general and administrative expenses – related party” in the statement of operations.

On August 21, 2013, the Company and BRNI amended the Technology License and Services Agreement to clarify certain provisions.

Neurotrope, Inc.

(a Development Stage Company)

Notes to Unaudited Condensed Consolidated Financial Statements

Effective August 28, 2013, the Company signed a statement of work (“SOW”) with BRNI pursuant to its licensing agreement (Noted above) whereas the Company has contracted for the further development of its AD diagnostic product. Pursuant to the SOW, the Company is obligated to pay BRNI a total of $1,645,470 in 12 equal monthly installments of $137,123, payable on the first business day of each month. These payments are for operating expenses associated with BRNI’s diagnostic laboratories. Operating expenses that are incurred in excess of this total amount are the responsibility of BRNI unless prior approval is obtained from the Company. The SOW may be extended if BRNI provides the Company with two months advanced notice that the SOW objectives are not met within the initial 12 month period. The Company will agree to continue funding the SOW at the same monthly rate for a period not to exceed an additional six (6) months to conclude the first anticipated clinical trial for the AD diagnostic product. In addition, the Company has agreed to pay an estimated $877,300 in external costs to complete the first clinical trial.

Effective November 13, 2013, the Company agreed to an SOW with BRNI pursuant to its licensing agreement (Noted Above) whereas the Company has contracted for the further development of its AD therapeutic product. Pursuant to the SOW, the Company paid BRNI $251,939 for related personnel and research services. The Company has expensed this entire amount in year ended December 31, 2013.

On March 12, 2014, the Company signed an SOW with BRNI to continue pre-clinical activities relating to the commercialization of the Company’s therapeutic product. The Company is obligated to pay BRNI a total of $465,000. Of this amount, the Company has paid $358,470 as of May 2014, the remaining $106,530 to be paid upon the completion, by BRNI, of certain activities relating to: transferring test materials; bio-analytical testing; contracting with a suitable contract research organization; completion of testing assays, and; finalizing a clinical study protocol.

Note 6 – Common Stock:

On June 20, 2013, BlueFlash Communications, Inc., a Florida corporation (“BlueFlash”), entered into an Agreement and Plan of Merger (the “Plan of Merger”) with Neurotrope, Inc., its wholly owned Nevada subsidiary, pursuant to which BlueFlash would merge with and into Neurotrope (the “Reincorporation Merger”). The Plan of Merger was amended by the Amendment to Agreement and Plan of Merger between the parties, dated July 10, 2013 (the “Amendment”). The purpose of the Merger was to re-domicile BlueFlash from Florida to Nevada, and to effect a name change and recapitalization as described below.

On August 5, 2013, Articles of Merger were filed with both the Secretary of State of the State of Nevada and the Secretary of State of the State of Florida, pursuant to which the Reincorporation Merger was effective as of August 9, 2013. Upon effectiveness of the Merger, Neurotrope, Inc.’s Articles of Incorporation and Neurotrope, Inc.’s Amended and Restated Bylaws became the Articles of Incorporation and Amended and Restated Bylaws of the registrant.

Neurotrope, Inc.

(a Development Stage Company)

Notes to Unaudited Condensed Consolidated Financial Statements

Neurotrope, Inc., has an authorized share capital of 300,000,000 shares of common stock, par value $0.0001 per share (“Neurotrope Common Stock”) and 50,000,000 shares of “blank check” preferred stock, par value $0.0001 per share. Prior to the Reincorporation Merger, Neurotrope, Inc. had 100 shares of its Neurotrope Common Stock outstanding, held by BlueFlash, and therefore was a wholly-owned subsidiary of BlueFlash. Prior to the Merger, Neurotrope, Inc. had no assets, liabilities or business.

Pursuant to the Plan of Merger, among other things, (i) each share of common stock of BlueFlash, $0.0001 par value per share (“BlueFlash Common Stock”) was automatically converted into 2.242 shares of Neurotrope Common Stock.

On August 21, 2013, the NBI amended its articles of incorporation to increase its authorized shares of common stock from 45,000,000 shares to 57,000,000 shares.

On August 23, 2013, the Reverse Merger occurred as described in Note 1 above, and all of the outstanding Neurotrope BioScience common stock was converted into shares of Neurotrope, Inc. common stock on a one-for-one basis.

In connection with the Reverse Merger and pursuant to a Split-Off Agreement, Neurotrope, Inc. transferred its pre-Reverse Merger business to Marissa Watson, its pre-Reverse Merger majority stockholder, in exchange for the surrender by her and cancellation of 20,178,000 shares of Neurotrope, Inc. common stock.

During the quarter ended March 31, 2014, two holders Series A of Preferred Stock, totaling 149,000 shares of Preferred Stock, converted that Preferred Stock into 149,000 shares of Common Stock.

Note 7 – Preferred Stock:

Through a private placement, NBI issued 9,073,300 preferred shares at $1 per share on that date, resulting in gross proceeds of $9,073,300. In connection with the February 28, 2013 closing of the private placement, the Company was required to pay the placement agent, Allied Beacon Partners, Inc., a cash fee equal to the sum of (a) 10% of the proceeds received from purchasers sourced by Allied Beacon Partners, Inc. and (b) 5% of the proceeds received from purchasers sourced by the Company. No fee was payable on proceeds received from purchasers who were already stockholders of the Company. The total cash fee that the Company was required to pay in connection with this closing was $882,330. The Company was also obligated to issue to Allied Beacon Partners, Inc. warrants for the purchase of common stock and Series A preferred stock of the Company in connection with the closing. The aggregate number of shares subject to such warrants was the sum of 10% of the number of shares purchased by purchasers sourced by Allied Beacon Partners, Inc. and (b) 5% of the number of shares purchased by purchasers sourced by the Company. No warrants were earned on proceeds received from purchasers who were already stockholders of the Company.

On May 17, 2013, NBI issued an additional 1,313,325 shares of Series A preferred stock at $1.00 per share, resulting in gross proceeds of $1,313,325, on which NBI paid the placement agent cash of $131,332 and warrant compensation under the same terms as applied with respect to the February 28, 2013 closing.

The total number of shares subject to warrants that NBI was required to issue in connection with the February and May 2013 closings was 988,663, consisting of 480,320 shares of common stock and 508,343 shares of Series A preferred stock. These warrants have a term of ten years. The strike price for the common stock warrants is $0.01 per share and the strike price for the Series A preferred stock warrants is $1.00 per share.

Neurotrope, Inc.

(a Development Stage Company)

Notes to Unaudited Condensed Consolidated Financial Statements

On August 23, 2013, NBI closed a private placement of 11,533,375 additional shares of its Series A preferred stock, for a purchase price of $1.00 per share, for aggregate gross proceeds of $11,533,375 (before deducting placement agent fees and expenses of the offering of $1,103,338). All of the 21,920,000 outstanding shares of NBI Series A preferred stock were converted into shares of Neurotrope Inc. Series A convertible preferred stock (the “Series A Preferred Stock”) on a one-for-one basis in the Reverse Merger. This additional financing was in conjunction with the Company’s merger with a publicly reporting shell company (See Note 1 above).

On October 4, 2013, the Company completed its Series A preferred stock offering through a private placement of 1,080,000 shares of its Series A preferred stock, for a purchase price of $1.00 per share, for aggregate gross proceeds of $1,080,000 (before deducting placement agent fees and expenses of the offering). As a result of the foregoing, the placement agent was paid an aggregate commission of $108,000 and was issued Agent Warrants to purchase 108,000 shares of the Company’s Series A preferred stock.

The Company agreed to pay the placement agent in the offering a cash commission of 10% of the gross funds raised from investors in the private placement offering (“PPO”). In addition, the placement agent received (a) for the first $12,000,000 of gross PPO proceeds, (i) warrants exercisable for a period of ten (10) years to purchase a number of shares of Common Stock equal to 7.5% of the number of shares of Series A preferred stock sold to investors introduced by it, with a per share exercise price of $0.01, and (ii) warrants exercisable for a period of ten (10) years to purchase a number of shares of Series A preferred stock equal to 2.5% of the number of shares of Series A preferred stock sold to investors introduced by it, with a per share exercise price of $1.00; and (b) on gross PPO proceeds in excess of $12,000,000, warrants exercisable for a period of ten (10) years to purchase a number of shares of Series A preferred stock equal to 10% of the number of shares of Series A preferred stock sold to investors introduced by it, with an exercise price of $1.00 per share (collectively, the “Agent Warrants”). As a result of the foregoing aggregate placements, the placement agent was issued Agent Warrants to purchase 900,000 shares of the Company’s Common Stock and 1,325,000 shares of the Company’s Series A preferred stock.

The Series A preferred stock ranks senior with respect to liquidation preference and dividend rights to the common stock and any other class or series of stock that the Company may issue. The Series A preferred stock accrues a dividend at an annual rate of $0.08 per share, when and if declared by the Board of Directors of the Company. No dividends have been declared on the Series A preferred stock. In the event of any voluntary or involuntary liquidation, dissolution or winding-up of our affairs or similar event, a holder of Series A preferred stock will be entitled to be paid, before any distribution or payment may be made to any holders of common stock or other class or series of stock, the liquidation amount (which shall equal $1.00 per share) and the amount of any accrued and unpaid dividends as of such distribution or payment date. Each share of Series A preferred stock is convertible into common stock at the option of the stockholder at a price of $1.00 per share, subject to adjustment. The Series A shares are subject to mandatory conversion upon the vote of holders of a majority of the outstanding shares of Series A preferred stock at any given time, or upon the closing of a sale of common stock to the public at a price of at least $5.00 per share (subject to adjustment in the case of certain events) in a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act, resulting in net proceeds to the Company of at least $30,000,000.The holders of Series A preferred stock are entitled to a class vote on certain Company actions, have the right to elect one of five members of the Company board of directors and have a right of first offer to purchase their pro rata share of equity securities issued by the Company in the future, in addition to certain additional rights and privileges as set forth in the Amended and Restated Certificate of Incorporation and in certain agreements between the Company and the holders thereof.

Neurotrope, Inc.

(a Development Stage Company)

Notes to Unaudited Condensed Consolidated Financial Statements

On August 21, 2013, NBI increased its authorized shares of preferred stock to 50,000,000 shares. As a result, the Company had a sufficient number of preferred shares to close the August 23, 2013 private placement.

Note 8 – Stock Options:

Before the Reverse Merger, our Board of Directors adopted, and our stockholders approved, our 2013 Equity Incentive Plan (the “2013 Plan”), which provides for the issuance of incentive awards of up to 7,000,000 shares of the Company’s common stock to officers, key employees, consultants and directors. Upon the closing of the Reverse Merger, options to purchase an aggregate of 5,154,404 shares of the Company’s common stock were issued. Of these options: 1. 3,500,000 options were issued to founding stockholders and 54,404 were granted to a consultant, each with a term of ten years, exercisable at $1.75 per common share, 100% of these options vested on date of grant; 2. 1,050,000 options were issued to four directors (or their affiliates) and 250,000 to a consultant with a term of ten years, exercisable at $1.00 per common share, which vest 20% per year for each of five years after the date of grant, and; 3. 300,000 options were granted to a consultant with a term of ten years, exercisable at $1.00 per common share which vested 20% on date of grant and vest 20% per year over the next four years. These options were issued in conversion of options issued by NBI on February 28, 2013.

On January 23, 2014, the Company issued 300,000 options under the 2013 Plan to three employees, each with a term of ten years, exercisable at $1.76 per common share. 125,000 of these options vest 25% per year, with accelerated vesting of 25% upon a termination without cause or for good reason, with the remaining 175,000 vesting 20% per year. On March 21, 2014, the Company issued 30,000 options under the 2013 Plan to one employee with a term of ten years, exercisable at $2.30 per common share and vests 20% per year.

Neurotrope, Inc.

(a Development Stage Company)

Notes to Unaudited Condensed Consolidated Financial Statements

A summary of the Company’s stock option activity during the three months ended March 31, 2014 is as follows:

	Options Outstanding		Weighted-Average Exercise Price
Outstanding at December 31, 2013		6,249,952	$	1.48
Options granted		330,000	$	1.81
Options exercised		0		0
Outstanding at March 31, 2014		6,579,952	$	1.50
Options exercisable		3,863,363	$	1.70

The weighted-average remaining contractual term of options exercisable and outstanding at March 31, 2014 was approximately 9.40.

The Company used the Black-Scholes valuation model to calculate the fair value of stock options. Stock-based compensation expense is recognized over the vesting period using the straight-line method.

The fair value of stock options issued for the three months ended March 31, 2014 was estimated at the grant date using the following weighted average assumptions: Dividend yield 0%; Volatility 99.75%; Risk-free interest rate 2.73%; weighted average grant date fair value of $1.63 per common share.

The total stock option-based compensation recorded as operating expense was approximately $171,000 for the three months ended March 31, 2014 and $3.3 million from inception to March 31, 2014. All of the stock option-based compensation expense was classified as general and administrative expense. As of March 31, 2014, unrecognized stock option-based compensation was $2,773,747.

Note 9 – Common and Preferred Stock Reserved for Future Issuances:

Common stock and preferred stock reserved for future issuances consisted of the following at March 31, 2014:

	Common Stock Reserved		Preferred Stock Reserved
Common stock warrants outstanding		900,000
Preferred stock warrants outstanding		1,217,000		1,217,000
Common stock options outstanding		6,579,952		0
Conversion of Series A preferred stock		22,851,000		0
Total		31,547,952		1,217,000

ITEM 2.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following management’s discussion and analysis should be read in conjunction with the Company’s historical financial statements and the related notes thereto. The management’s discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those under “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as filed with the SEC, that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. The Company’s actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this report.

On August 23, 2013, a wholly owned subsidiary of Neurotrope, Inc. (formerly “BlueFlash Communications, Inc.”), Neurotrope Acquisition, Inc., a corporation formed in the State of Nevada on August 15, 2013 (“Acquisition Sub”) merged (the “Merger”) with and into Neurotrope BioScience, Inc. (“Neurotrope Bioscience”). Neurotrope BioScience was the surviving corporation in the Merger and became the Company’s wholly owned subsidiary. All of the outstanding Neurotrope BioScience common stock was converted into shares of Neurotrope, Inc. common stock on a one-for-one basis. As the result of the Merger and the change in business and operations of the Company, from engaging in the business of providing software solutions to deliver geo-location targeted coupon advertising to mobile internet devices, to the business of developing two product platforms, including a drug candidate called bryostatin for the treatment of Alzheimer’s Disease (“AD”) and, potentially, a diagnostic test for AD, a discussion of the past financial results of Neurotrope, Inc. (formerly BlueFlash Communications, Inc.) is not pertinent, and under applicable accounting principles, the historical financial results of Neurotrope BioScience, the accounting acquirer, prior to the Merger, are considered the historical financial results of the Company.

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

Basis of Presentation

References in this section to “Neurotrope,” “we,” “us,” “our,” “the Company” and “our Company” refer to Neurotrope, Inc. and its consolidated subsidiary Neurotrope BioScience.

The unaudited financial statements, for our fiscal quarters ended March 31, 2014 and 2013, include a summary of our significant accounting policies and should be read in conjunction with the discussion below. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in these unaudited financial statements. All such adjustments are of a normal recurring nature.

Overview

Neurotrope Bioscience was founded as a Delaware corporation in October 2012. Activities since the Company’s inception through March 31, 2014, were devoted primarily to the development and commercialization of Alzheimer’s Disease (“AD”) therapeutic products related diagnostics for large and growing markets using innovative licensed patented technology. This technology, licensed by us from Blanchette Rockefeller Neurosciences Institute (“BRNI”), has been under development since 1999 and has been financed by BRNI from a variety of non-investor sources including not-for-profit foundations, the National Institute of Health and individual philanthropists up until March 2013. From March 2013 forward, the licensed technology has been funded principally through collaboration by BRNI with Neurotrope Bioscience. (See the description of Neurotrope Bioscience financings below in “Financial Condition, Liquidity and Capital Resources – Sources and Uses of Liquidity.”)

As of March 31, 2014, the Company had devoted substantially all of its efforts to product development, raising capital and building infrastructure through utilizing its strategic alliances, specifically with BRNI. The Company did not, as of that date, realize any revenues from its planned principal operations. Accordingly, the Company is considered to be in the development stage.

Strategy

One of the central tenets developed by BRNI is that the neurodegeneration underlying these neurological diseases can be halted and reversed if treatment is initiated early enough. This process occurs by an improvement in nerve cell viability and synaptic function through activation of an enzyme called protein kinase C (PKC). This enzyme is actually a super family of isozymes (α, β, γ, δ, ε…) which have different activities in different tissues. The PKCepsilon (aka PKCε) variant has a very high concentration in the synapses of neurons, suggesting it plays a role in maintaining synaptic function. Deficient activity or low concentrations of PKCε in aging subjects is thought to be once of main causes of the neurodegeneration seen in AD. Through a variety of the latest biomedical techniques and animal models developed to map and quantify neuroregeneration, BRNI has established a very central role for PKCε in re-modeling or restoring synaptic function in both healthy and diseased neurons in the central nervous system.

The flagship product in the Neurotrope armamentarium is bryostatin. This drug has previously been evaluated in 1,200 patients at the National Cancer Institute (“NCI”) for the treatment of various forms of cancer. While bryostatin did not show sufficient anti-cancer effects to warrant commercialization of the compound, much useful information on the safety, pharmacodynamics, and toxicity of the drug was gleaned from these in-human trials.

It was discovered that at a much lower dose than that which was used in these anti-cancer trials, bryostatin is a potent activator of PKCε and may have efficacy in treating AD. Activation of PKCε has now been shown to partially restore synaptic function in neurons damaged by AD, ischemic stroke or traumatic brain injury in in vitro and in vivo animal models.

The NCI has allowed BRNI access to the valuable chemical, animal and human data from its cancer studies, to which Neurotrope, in turn, has access under the License Agreement to be used in our own research and regulatory programs.

Since licensing the AD diagnostic technology from BRNI, we have conducted extensive analysis of the underlying technology and commercial sales potential of an AD diagnostic product. Based upon our analyses to date and our current resources, our Board of Directors may decide that allocation of future expenditures relating to the AD diagnostic product (beyond completion of our existing statement of work with BRNI for development of the diagnostic) may be better spent on development of bryostatin in the treatment of AD. As such, we are continuing to evaluate our original timeline for commercialization of the diagnostic product to insure the budget to develop bryostatin for the treatment of AD is fully funded over next 24 months. This on-going process could result in a delay of development of the diagnostic product.

The Company’s strategy is to efficiently utilize our licensed proprietary and patented technologies to further the development of those technologies toward commercializing a therapeutic and, potentially, a diagnostic product for AD and potentially utilize these technologies to diagnose and treat other neurological diseases. We may also seek to acquire, by license or otherwise, other development stage products that are consistent with our product portfolio objectives and commercialization strategy.

Critical Accounting Policies, Estimates, and Judgments

Our financial statements are prepared in accordance with accounting principles that are generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. We continually evaluate our estimates and judgments, the most critical of which are those related to our commitments to strategic alliance partners and the timing of the achievement of collaboration milestones. We base our estimates and judgments on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known. Besides the estimates identified above that are considered critical, we make many other accounting estimates in preparing our financial statements and related disclosures. All estimates, whether or not deemed critical, affect reported amounts of assets, liabilities, revenues and expenses, as well as disclosures of contingent assets and liabilities. These estimates and judgments are also based on historical experience and other factors that are believed to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known, even for estimates and judgments that are not deemed critical.

Results of Operations

Three months ended March 31, 2014

Revenues

The Company has not generated any revenues for the three months ended March 31, 2014.

Operating Expenses

Overview

Total operating expenses for the three months ended March 31, 2014 were $1,694,926 versus $518,491 for the three months ended March 31, 2013, an increase of 227%. The increase in operating expenses is due primarily to several factors including the acceleration of product research and development activities, relating to its collaboration with BRNI, to treating and diagnosing neurodegenerative diseases, general and administrative expenses for salaries, overhead and public company-related activities.

Research and Development Expenses

For the three months ended March 31, 2014, the Company incurred $651,859 of research and development expenses versus $0 for the three months ended March 31, 2013. These expenses are incurred pursuant to our strategic alliance with BRNI for ongoing research and development principally relating to the development of the Company’s therapeutic and diagnostic products. Of these expenses, for the three months ended March 31, 2014, $411,369 related to the continuing development of the Company’s AD diagnostic product, $125,342 related to the development of the Company’s AD therapeutic product, and $115,148 was incurred for patent expenses associated with the two licensed technology platforms from BRNI.

General and Administrative Expenses

The Company incurred related party general and administrative expenses totaling $93,763 and $438,686 for the three months ended March 31, 2014 and 2013, respectively, a decrease of 79%. The decrease is primarily attributable to the payment of a royalty of $409,549 to BRNI and $29,137 paid to consultants during the three month period ended March 31, 2013. For the three months ended March 31, 2014, the Company incurred $66,763 related to issuance of stock options as a non-cash expense and $27,000 was paid to our Chairman for services provided to the Company.

The Company incurred $949,304 and $79,805 of other general and administrative expenses for the three months ended March 31, 2014 and 2013, respectively, an increase of approximately 1,090%. Of the amounts for the three months ended March 31, 2014, $390,102 was incurred for wages, vacation pay and taxes, for six employees, versus $45,666 for one employee for the comparable 2013 period, $137,706 for ongoing legal expenses versus $30,089 for the comparable 2013 period, $191,584 was incurred for outside operations consulting services versus $5,016 for the comparable 2013 period, $61,240 was incurred for travel expenses, versus $1,594 for the comparable 2013 period, $20,630 was incurred for investor relations services, $18,560 was incurred for professional fees associated with financial and accounting advisory services, $104,157 for issuance of stock options as a non-cash expense, and $25,326 was incurred for office supplies, insurance, license fees, filing costs, advertising and other versus $1,440 for dues, licenses and supplies for the comparable 2013 period.

Other Income

The Company earned $4,429 of interest income for the three months ended March 31, 2014 on funds temporarily deposited in an interest bearing money market account versus $0 for the three months ended March 31, 2013.

Net loss and earnings per share

The Company incurred losses of $1,690,497 and $518,491 for the three months ended March 31, 2014 and 2013, respectively. The increased loss was primarily due to the Company’s increased activities and new employee hiring during the current period. Earnings per share was ($0.08) and ($0.02) for the three months ended March 31, 2014 and 2013, respectively. The increase in loss per share is primarily attributable to the increase in the Company’s operating loss for the current period.

Financial Condition, Liquidity and Capital Resources

Since its inception, the Company has primarily devoted its efforts to negotiating the License Agreement and using BRNI’s resources to further the development of the Company’s therapeutic and diagnostic products toward commercialization while conducting business planning and recruiting executive management. Accordingly, the Company is considered to be in the development stage.

Cash and Working Capital

Since inception, the Company incurred negative cash flows from operations. As of March 31, 2014, the Company had an accumulated deficit of $10,719,863 and had working capital of $13,370,810 as compared to working capital of $14,890,387 as of December 31, 2013. The $1,519,577 decrease in working capital was attributable to the Company’s expenditures relating to development of a therapeutic and diagnostic product and general and administration expenses which resulted in a net loss of $1,690,497 offset by non-cash expenses of $170,920 for the three months ended March 31, 2014.

Sources and Uses of Liquidity

Since inception, the Company has satisfied its operating cash requirements from the private placement of Series A sold principally to outside investors.

In February, 2013, through a private placement, the Company issued 9,073,300 shares of Series A at $1.00 per share, resulting in gross proceeds of $9,073,300. In connection with the closing of the private placement, the Company paid a placement agent $882,330. In May, 2013, the Company issued an additional 1,313,325 shares of Series A at $1.00 per share, resulting in gross proceeds of $1,313,325, on which the Company paid a placement agent $131,332. In August, 2013, through an additional private placement, the Company issued 11,533,375 of Series A at $1.00 per share, resulting in gross proceeds of $11,533,375. In connection with the closing of the August 2013 private placement, the Company paid a placement agent $1,103,338. Further, Neurotrope Bioscience became a wholly-owned subsidiary of a publicly traded company in the Merger, which management believes will provide additional alternatives to issue securities and raise capital in the future. In October, 2013, through an additional private placement, the Company issued 1,080,000 of Series A at $1.00 per share, resulting in gross proceeds of $1,080,000. In connection with the closing of the private placement, the Company paid a placement agent $108,000.

As of March 31, 2014, the Company had cash and cash equivalents totaling $13.6 million, which decreased to approximately $12.6 million as of the date of this report. With the proceeds from the private placements of Series A, management believes the Company has sufficient capital to fund the Company for at least the next 18 to 24 months of operations under its current product development plans. However, if our operating plan changes or we incur significant unanticipated expenses, we may require additional capital before this timeframe. During the next two years, we expect to spend up to approximately $10.5 million on development of both our AD diagnostic and therapeutic products. With these expenditures, we anticipate launching our commercialized AD diagnostic product and conducting significant clinical trials on our AD therapeutic. We expect to also incur up to approximately $6.0 million in general and administrative costs in that period to support our ongoing research and development expenses and our expenses associated with being a publicly traded company. Management believes the Company will generate revenues through commercialization of its diagnostic product within the next 36 months. Additional funds may be raised through debt financing and/or the issuance of equity securities; at this time no additional fundraising has been initiated, and no specific terms have been set. There can be no assurance that financing will be available when required in sufficient amounts, on acceptable terms or at all.

Pursuant to a statement of work signed with BRNI on August 28, 2013, we are obligated to pay BRNI a total of $1,645,470 in twelve equal monthly installments of $137,123, payable on the first business day of each month, commencing September 2013. In addition, we have agreed to pay an estimated $877,300 in external costs to complete the first clinical trial of its AD diagnostic. As of March 31, 2014, up to approximately $1.6 million remained potentially payable under this SOW.

On March 12, 2014, we signed an SOW with BRNI to continue pre-clinical activities relating to the commercialization of the Company’s therapeutic product. The Company is obligated to pay BRNI a total of $465,000 (subject to a 20% cost overage, which may not be exceeded without our consent). Of this amount, the Company has paid $358,470, and the remainder of the total ($106,530) is to be paid upon the completion by BRNI of certain activities relating to: transferring test materials; bio-analytical testing; contracting with a suitable contract research organization; completion of testing assays; and finalizing a clinical study protocol.

Off-Balance Sheet Arrangements

We did not engage in any “off-balance sheet arrangements” (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of March 31, 2014.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable to a smaller reporting company.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, our principal executive officer and principal financial officer, respectively, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective at the end of this period covered by this report to ensure that information we are required to disclose in the reports that we file or submit under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms relating to us, and was accumulated and communicated to our management, including our CEO/CFO, as appropriate, to allow timely decisions regarding required disclosure.

As discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, our management has identified certain material weaknesses and other deficiencies in the Company’s disclosure controls and procedures and has initiated, or plans to initiate, certain measures to address these material weaknesses. The Company is working as quickly as possible to implement these initiatives.

Changes in Internal Controls over Financial Reporting

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

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business, financial condition or results of operation. There are currently no pending legal proceedings that we believe will have individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. As far as we are aware, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties is subject.

ITEM 1A.

RISK FACTORS.

Other than as described in Item 5 below, there are no material changes from the risk factors as previously disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Other than as reported in our Current Reports on Form 8-K, we have not sold any of our equity securities during the period covered by this Report.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION.

In our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, we reported that in March 2014 we were made aware that the National Cancer Institute (“NCI”) withdrew its investigational new drug application (“IND”) supporting the use of bryostatin for cancer treatment in 2011 because it did not intend to pursue additional studies under the IND. The IND of Blanchette Rockefeller Neurosciences Institute (“BRNI”) supporting the use of bryostatin for treatment of patients with Alzheimer's Disease cross-referenced the NCI IND for certain information, including manufacturing and controls information, nonclinical toxicology studies and clinical safety data. We reported that BRNI was in discussions with both the NCI and the U.S. Food and Drug Administration (“FDA”) to confirm that the NCI’s withdrawal of its IND would not prevent BRNI from conducting its planned protocols and trials.

On April 18, 2014, BRNI received a written confirmation from the FDA that BRNI may proceed with both the single patient compassionate use protocol and with the planned single dose clinical trial described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013. However, continued development of bryostatin as a potential therapeutic for Alzheimer’s disease will require successful completion of a standard battery of nonclinical studies, including toxicology and genotoxicity studies, typically performed in advance of non-cancer clinical trials.

ITEM 6.

EXHIBITS.

The following exhibits are filed (or furnished) with this Report:

31.1	Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer

31.2	Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial and accounting officer

32.1	Section 1350 Certification of principal executive officer (This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.)

32.2	Section 1350 Certification of principal financial and accounting officer (This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.)

101	Interactive Data Files of Financial Statements and Notes.

101.ins	Instant Document

101.sch	XBRL Taxonomy Schema Document

101.cal	XBRL Taxonomy Calculation Linkbase Document

101.def	XBRL Taxonomy Definition Linkbase Document

101.lab	XBRL Taxonomy Label Linkbase Document

101.pre	XBRL Taxonomy Presentation Linkbase Document

SIGNATURES

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

Dated: May 15, 2014	Neurotrope, Inc.

	By:	/s/ Robert Weinstein
		Robert Weinstein
		Chief Financial Officer
		(Principal Financial and Accounting Officer)