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REVERSE MERGER | 3 Months Ended
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Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
REVERSE MERGER | NOTE 4 - REVERSE MERGER The acquisition of Phytanix Bio was considered a reverse merger. In accordance with ASC 805-40-45-1, the consolidated financial statements prepared following a reverse acquisition are issued under the name of the legal parent (Protagenic Therapeutics, Inc.) but described in the notes to the financial statements as a continuation of the financial statements of the legal subsidiary (Phytanix Bio), with one adjustment, which is to retroactively adjust the accounting acquirer’s legal capital to reflect the legal capital of the accounting acquiree (Protagenic Therapeutics, Inc.). That adjustment is required to reflect the capital of the legal parent. Comparative information presented in the consolidated financial statements also is retroactively adjusted to reflect the legal capital of the legal parent. Under ASC 805-40-45-2, the consolidated financial statements represent the continuation of the legal subsidiary except for the capital structure, as follows:
| (a) | The assets and liabilities of the legal subsidiary recognized and measured at their precombination carrying amounts;
| (b) | The assets and liabilities of the legal parent recognized and measured in accordance with the guidance in this topic applicable to business combinations (ASC 805);
| (c) | The retained earnings and other equity balances of the legal subsidiary before the business combination;
| (d) | The amount recognized as issued equity interests in the consolidated financial statements determined by adding the issued equity interest of the legal subsidiary outstanding immediately before the business combination to the fair value of the legal parent determined in accordance with the guidance in ASC 805 applicable to business combinations. However, the equity structure reflects the equity structure of the legal parent, including the equity interests the legal parent issued to effect the combination. Accordingly, the equity structure of the legal subsidiary is restated using the exchange ratio established in the acquisition agreement to reflect the number of shares of the legal parent issued in the reverse acquisition.
The Company acquired Phytanix Bio for an aggregate of (A) 117,690 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), which shares shall represent a number of shares equal to no more than 19.99% of the outstanding shares of Common Stock as of immediately before the Effective Time, (B) 5,705 shares of the Company’s Series C Convertible Preferred Stock, par value $0.000001 per share (the “Series C Preferred Stock”), and (C) 950,000 shares of the Company’s Series C-1 Convertible Preferred Stock, par value $0.000001 per share (the “Series C-1 Preferred Stock”, and together with the Series C Preferred Stock, the “Preferred Stock Payment Shares”). In addition, in exchange for all of the outstanding Preferred Shares of Phytanix Bio at the Effective Time, Protagenic Therapeutics, Inc. issued to the Preferred Stockholders, in accordance with their Preferred Pro Rata Portion, (A) an aggregate of 20,000 shares (the “Series D Payment Shares” of Series D Preferred Stock, par value $0.000001 per share of Protagenic Therapeutics, Inc. (the “Series D Preferred Stock”), and (b) common stock purchase warrants to purchase up to 715,493 shares of common stock. The issuance of the shares of Common Stock, Preferred Stock Payment Shares and Series D Payment Shares occurred on May 16, 2025. Each share of Preferred Stock Payment Shares is convertible into one of Common Stock, subject to certain conditions described in the Exchange Agreement. Each share of Series D Payment Shares is convertible into one of Common Stock, subject to certain conditions described in the Exchange Agreement. The combination is treated as a taxable exchange for U.S. federal income tax purposes. On May 15, 2025, the Company completed its acquisition of Phytanix Bio. As a result of this transaction, which is accounted for as a reverse merger, Phytanix Bio is a wholly owned subsidiary of the Company (the “Merger”). This exchange of shares and the resulting controlling ownership of Phytanix Bio constitutes a reverse acquisition resulting in a recapitalization of Phytanix Bio and purchase accounting being applied to Protagenic Therapeutics, Inc. under ASC 805 due to Phytanix Bio being the accounting acquirer and Protagenic Therapeutics, Inc., being deemed an acquired business. This requires financial reporting from the Merger close date forward to reflect only the historic consolidated results of Phytanix Bio and to include the consolidated results for Protagenic Therapeutics, Inc. and subsidiaries from May 15, 2025 forward. The primary reasons Phytanix Bio consummated the merger with Protagenic Therapeutics, Inc. were the opportunity to immediately become a public company without the process of doing its own initial public offering, thereby affording it the opportunity to more quickly raise capital and provide liquidity options to its stockholders, and at the same time acquiring the infrastructure required of a public company run by people experienced in investor relations and the public company regulatory compliance. The estimated allocation of the purchase price of the assets acquired and liabilities assumed for the acquisition by Phytanix Bio of Protagenic Therapeutics, Inc. via the reverse acquisition are set forth below: Purchase Price Allocation of Protagenic Therapeutics, Inc. SCHEDULE OF PURCHASE PRICE ALLOCATION
Current assets – cash and prepaid |  | $ | 1,029,985 |
Intangible assets – in process research and development and assembled workforce |  |  | 2,093,228 |
Fixed assets |  |  | 76,550 |
Accounts payable and accrued expenses |  |  | (857,504 | )
Purchase price |  | $ | 2,342,259 |
This allocation is based on an independent valuation received by the Company. The value was derived based off of the share price of Protagenic Therapeutics, Inc. at the time of the merger. The Company accounted for this transaction as an asset acquisition. From May 15, 2025 through June 30, 2025, there are no indications of impairment of the long-lived assets.

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