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Organization, Business, Risks and Uncertainties: | 3 Months Ended
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Mar. 31, 2026
Organization, Business, Risks and Uncertainties: |
Organization, Business, Risks and Uncertainties: | Note 1 – Organization, Business, Risks and Uncertainties: Organization and Business On May 17, 2020, Neurotrope, Inc. (“Neurotrope” or “the Parent”) announced plans for the complete legal and structural separation of its wholly owned subsidiary, Neurotrope Bioscience, Inc., from Neurotrope (the “Spin-Off”). Under the Separation and Distribution Agreement between Neurotrope and Synaptogenix (the “Separation and Distribution Agreement”), Neurotrope distributed all of its equity interest in this wholly owned subsidiary to Neurotrope’s stockholders. Following the Spin-Off, Neurotrope does not own any equity interest in the Company, and the Company operates independently from Neurotrope. On December 7, 2020, the Company became an independent company, Synaptogenix, Inc., a Delaware corporation (formerly known as Neurotrope Bioscience, Inc.) (“Synaptogenix”) when Synaptogenix filed an amended and restated certificate of incorporation which, among other things, changed its name to Synaptogenix, Inc. (the “Company”). On June 9, 2025, in connection with the Company’s previously announced exploration of strategic opportunities, the Company announced the launch of a differentiated cryptocurrency treasury strategy focused on the pure play artificial intelligence (“AI”) crypto coin, TAO, the native cryptocurrency of Bittensor, a decentralized blockchain network for machine learning and AI. On June 25, 2025, the Company filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation with the Secretary of State for the State of Delaware, effective June 26, 2025, to change the name of the Company from “Synaptogenix, Inc.” to “TAO Synergies Inc.” On September 26, 2025, the Company formed a subsidiary TAOX Florida Inc. for the purpose of facilitating the Company’s expansion into the cryptocurrency treasury strategy business. The Company’s shares of common stock, par value $0.0001 per share (the “Common Stock”), are listed on The Nasdaq Capital Market under the symbol “TAOX.” Background on TAO and Bittensor Bittensor is a public Layer 1 blockchain, called Subtensor, built with the Substrate framework and organized into independent “subnets” where miners produce digital commodities (commonly AI outputs) and validators evaluate them. Depending on the subnet’s incentive mechanism, miners may produce digital commodities that can include, for example, text prompt completions and other question-answer outputs, vector embeddings and related semantic search or ranking outputs, code-related outputs, image generation outputs, and speech-to-text transcription outputs. On chain, an algorithm named Yuma Consensus aggregates validators’ rankings of miners to compute emissions (new tokens minted by the protocol) for miners, validators, stakers, and subnet creators. This mechanism is widely referred to in project materials as Bittensor’s “Proof-of-Intelligence” consensus model. In this context, “consensus” refers to stake-weighted convergence on subnet validator scoring used to allocate emissions and other incentives, and not to transaction ordering or block finality, which are currently provided on Subtensor through a separate proof-of-authority authority set. Subtensor’s transaction ordering and block finality are currently provided by a proof of authority model under which a small, permissioned “authority set” produces and finalizes blocks. TAO is the Network’s native token and is used to pay transaction fees, incentivize subnet participants, and for staking. Staking TAO affects how emissions and incentives are allocated (including by influencing validator stake weight and related reward calculations and, under dTAO (defined below), by staking into a subnet’s on-chain pool to receive that subnet’s alpha token) and may affect governance participation. Staking TAO does not itself validate or finalize Subtensor transactions. TAO is, however, also used for governance (including voting power that may be exercised directly or via delegation) and may be used to create/register subnets under protocol rules. As of May 12, 2026, TAO’s circulating supply was approximately 10.9 million tokens with a market capitalization of approximately $3.38 billion, according to publicly available sources. The lifecycle of TAO follows a supply schedule. Approximately one block is produced every ~12 seconds, with 1 TAO per block minted before the first halving (about 7,200 TAO/day), and 0.5 TAO per block minted after the first halving (about 3,600 TAO/day). The first halving occurred when total issuance reached 10.5 million TAO on December 15, 2025. TAO is not halved on a daily basis. Instead, the per-block emission rate decreases by 50% when predetermined issuance thresholds are reached. TAO has a hard cap of 21,000,000 tokens. Subtensor transaction fees are paid in TAO. Current public documentation indicates that transaction fees are deducted from total issuance rather than distributed as rewards. Accordingly, subnet miners and subnet validators generally do not receive TAO as transaction-fee awards for validating transactions, and instead earn rewards primarily through protocol emissions. In addition, per current documentation, certain staking-related transactions are described as subject to a percentage-based fee (for example, 0.05% of the TAO amount being staked or unstaked), in addition to any weight-based transaction fees (in this context “weight” is a measure of compute time). Under the February 13, 2025 Dynamic TAO (“dTAO”) upgrade, newly issued TAO is first routed to subnets under protocol rules that, as of November 2025, allocate TAO across subnets based on net TAO inflows from staking activity rather than subnet token prices, and staking into a subnet exchanges TAO for that subnet’s alpha token. Subnet alpha tokens are subnet-specific tokens a participant receives when staking TAO into the subnet’s on-chain market pool, and the alpha token to subnet exchange rate is generally determined by the pool’s reserves. Exits convert alpha tokens back to TAO at the prevailing pool exchange rate at the time of conversion, so outcomes are price sensitive. According to current documentation, emissions for each subnet are generally distributed at the end of every approximately 360 blocks, or about 72 minutes, and the subnet’s participant distribution is generally allocated 41% to miners, 41% to validators and their stakers, and 18% to the subnet owner. The Bittensor blockchain does not impose protocol-enforced delays (unbonding periods) in accessing unstaked TAO. That said, custodians, validators, liquidity pools, or other service providers and operational setups may impose operational, contractual, or practical limits on withdrawal timing or liquidity. The initial Bittensor mainnet “Kusanagi” launched in January 2021, was followed by the “Nakamoto” upgrade in November 2021, then a fork to the current “Finney” chain on March 20, 2023. Subnets went live on October 2, 2023. Governance has transitioned to a bicameral model in which a “Triumvirate” (employees of the Opentensor Foundation) authors proposals and a “Senate” (a group of delegates who have elected to participate in proposals) must approve the proposals prior to implementation. The Senate is comprised of the top delegate hotkeys by stake. In this specific context, a “hotkey” is the operational public key used by a participant to conduct on-chain actions (including by a validator), and a “delegate” is a hotkey that accepts delegated TAO from third parties for staking. “Top” refers to the delegate hotkeys with the highest total stake at a given time. Per current documentation, the Senate has 12 seats (although not all must be filled), and a delegate generally must reach at least 2% of total network stake amount through delegation or self-stake and elect to participate in the Senate. If all twelve Senate seats are filled, and a delegate wishes to join, the lowest stake member is replaced. Because Senate membership is stake-based, governance influence may be concentrated among large stakers and delegates. Our Cryptocurrency Asset Strategy In June 2025, the Company adopted a differentiated cryptocurrency treasury strategy focused on the pure play artificial intelligence (AI) crypto coin, TAO, the native cryptocurrency of Bittensor. Bittensor is a decentralized blockchain network for machine learning and AI. This was a shift from our prior approach of holding excess cash (as defined below) primarily in Federal Deposit Insurance Corporation (“FDIC”)-insured interest-bearing accounts. We now seek to allocate substantial portions of our excess cash to purchasing TAO, with the goal of obtaining an increased yield on excess cash by staking TAO for revenue generation and capital appreciation, a strategy that underscores our mission to create significant value for shareholders. To identify “excess cash,” the Company first evaluates its cash, cash equivalents, and short-term investments (collectively, “cash assets”). The Company then estimate the amount of cash assets required to fund approximately 1.5 to 2.0 years of projected operating and working capital needs. Cash assets in excess of this estimated liquidity requirement are considered “excess cash” for purposes of its TAO accumulation strategy. By allocating a substantial portion of its excess cash to TAO, the Company generally mean that we seek to allocate between 75 percent and 100 percent of this excess cash to the purchase of TAO. However, actual allocation levels may vary due to market conditions, the prevailing price of TAO, liquidity needs, and other factors considered by management. To guide its cryptocurrency asset purchases, the Company’s Board of Directors (the “Board”) adopted a long-only TAO accumulation strategy and has delegated authority to our Executive Chairman, in consultation with internal personnel and external advisors, to determine the timing, size, and method of TAO purchases with the objective of maximizing tokens per share. Under this authority, management reviews our cash assets, identifies any excess cash as described above, and determines whether to allocate such excess cash to the acquisition of TAO. In addition to using excess cash, the Company’s acquisition strategy may also involve issuing debt or equity securities or undertaking other capital raising transactions, subject to market conditions, with the objective of using the proceeds to purchase additional TAO. The Company has not established a specific target amount of TAO that we seek to hold. Instead, the Company monitors market conditions, liquidity needs, and financing opportunities in determining whether to make additional TAO purchases in the future. The Company views its TAO holdings as long-term holdings and expect to continue accumulating TAO over time. As of March 31, 2026, approximately 87.3% of the Company’s treasury holdings were invested in TAO. The Company does not hedge our TAO exposure and has no diversification strategy into other crypto assets. Accordingly, the Company’s treasury strategy currently reflects long-only exposure to TAO. However, the Company is exploring the potential implementation of hedging strategies to manage risks associated with digital asset price volatility; the Company has not implemented any hedging strategies to date, and there can be no assurance that any such strategies will be implemented or, if implemented, effective. Although a liquid market for TAO exists, the Company has not monetized (i.e., sold) any TAO to date. A majority of the Company’s TAO is staked as soon as trade settlement permits, and the Company currently stakes TAO through two staking providers - tao5 and Yuma Validator, LLC (“Yuma”). The Company only engages in TAO staking. In the future, the Company may explore additional yield-enhancement strategies, including participation in Bittensor subnets. Any such activity would likely be undertaken with a third-party partner possessing substantial subnet expertise. Liquidity Uncertainties As of March 31, 2026, the Company had approximately $3.6 million in cash and cash equivalents and approximately $25.2 million in digital asset value as compared to $23.4 million of cash, cash equivalents and digital asset value at December 31, 2025. The Company expects that its current cash and cash equivalents and TAO token market value, approximately $28 million as of the date of this Quarterly Report on Form 10-Q, will be sufficient to support its projected operating requirements and financial commitments for at least the next 12 months from the date of this Quarterly Report. The operating requirements include the current plans for increasing its TAO holdings and staking while determining its strategy for Bryostatin-1, the Company’s novel drug candidate targeting the activation of Protein Kinase C Epsilon (PKC ε). The financial commitments include the potential redemption of the Series D convertible preferred stock, par value $0.0001, with a stated value of $1,000 per share (the “Series D Convertible Preferred Stock”), for cash. The Company expects to need additional capital in order to continue pursuing its TAO treasury strategy. Any additional equity financing, if available, may not be on favorable terms and would likely be significantly dilutive to the Company’s current stockholders, and debt financing, if available, may involve restrictive covenants. If the Company is able to access funds through collaborative or licensing arrangements, it may be required to relinquish rights to some of its technologies or product candidates that the Company would otherwise seek to develop or commercialize on its own, on terms that are not favorable to the Company. The Company’s ability to access capital when needed is not assured and, if not achieved on a timely basis, will likely have a materially adverse effect on its business, financial condition and results of operations. Other 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 and regulatory. Such factors include, but are not necessarily limited to, market conditions of, and overall sentiment towards, the cryptoeconomy, the ability to obtain favorable licensing, manufacturing or other agreements, including risk associated with the Company’s Cognitive Research Enterprises, Inc. (formerly known as the Blanchette Rockefeller Neurosciences Institute, or BRNI) (“CRE”) licensing agreement, and the ability to raise capital to achieve strategic objectives. The Company maintains its digital assets with a third-party custodian. As a result, the Company is exposed to custodial concentration risk related to the safekeeping and access to such assets. See additional risks and uncertainties set forth under the heading “Risk Factors” contained elsewhere in this Quarterly Report on Form 10-Q.

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