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

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this report and our annual report on Form 10-K for the year end December 31, 2018.

The following discussion highlights our 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 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.

Overview

We are a biopharmaceutical company with product candidates in pre-clinical and clinical development. We are principally focused on developing a product platform based upon a drug candidate called bryostatin for the treatment of Alzheimer’s disease (“AD”), which is in the clinical testing stage. We are also evaluating bryostatin for other neurodegenerative or cognitive diseases and dysfunctions, such as Fragile X syndrome, Multiple Sclerosis, and Niemann-Pick Type C disease, which have undergone pre-clinical testing. In addition, we are also in the early stages of testing bryostatin activity which may lead to applications in Leukemia and Lymphoma. Neurotrope has been a party to a technology license and services agreement with the original Blanchette Rockefeller Neurosciences Institute (“BRNI”) (which has been known as Cognitive Research Enterprises, Inc. (“CRE”) since October 2016), and its affiliate NRV II, LLC, which we collectively refer to herein as “CRE,” pursuant to which we now have an exclusive non-transferable license to certain patents and technologies required to develop our proposed products. Neurotrope BioScience was formed for the primary purpose of commercializing the technologies initially developed by BRNI for therapeutic applications for AD or other cognitive dysfunctions. These technologies have been under development by BRNI since 1999 and, until March 2013, had been financed through funding from a variety of non-investor sources (which include not-for-profit foundations, the National Institutes of Health, which is part of the U.S. Department of Health and Human Services, and individual philanthropists). From March 2013 forward, development of the licensed technology has been funded principally through the Company in collaboration with CRE. We have entered into licensing agreements with Stanford University for the exclusive use of synthetic bryostatin and for the use of bryostatin-like compounds, called Bryologs, for certain therapeutic indications.

Pursuant to the CRE License and as amended, Neurotrope BioScience maintains its exclusive, non-transferable (except pursuant to the CRE License’s assignment provision), world-wide, royalty-bearing right, with a right to sublicense, title and interest in and to certain patents and technology owned by CRE or its affiliates to develop, use, manufacture, market, offer for sale, sell, distribute, import and export certain products or services for therapeutic applications for AD and other cognitive dysfunctions in humans or animals (the “Field of Use”). Additionally, the CRE License specifies that all patents that issue from a certain patent application shall constitute licensed patents and all trade secrets, know-how and other confidential information claimed by such patents constitute licensed technology under the CRE License.

On August 23, 2013, our wholly-owned subsidiary, Neurotrope Acquisition, Inc., a corporation formed in the State of Nevada on August 15, 2013 merged with and into Neurotrope BioScience. Neurotrope BioScience was the surviving corporation in the reverse merger and became Neurotrope, Inc.’s wholly-owned subsidiary. As the result of the reverse merger, the Company’s business changed from engaging in the business of providing software solutions to deliver geo-location targeted coupon advertising to mobile internet devices, to the biotechnology business, including the development of a drug candidate called bryostatin for the treatment of AD.

Review of Strategic Alternatives

On October 8, 2019, following our announcement of top-line results from our Phase 2 study of bryostatin-1 in moderate to severe AD (as described below), we announced our plans to explore strategic alternatives to maximize shareholder value. Our Board has formed a strategic alternatives committee to aid in evaluating our alternatives. There can be no assurance that our formal strategic review of alternatives will result in any successful transaction or other outcome. We are continuing to determine how to proceed with respect to our current development programs for bryostatin-1 in our effort to maximize shareholder value.

Results of Phase 2 Clinical Trial

On May 1, 2017, we reported certain relevant top-line results from our Phase 2 exploratory clinical trial based on a preliminary analysis of a limited portion of the complete data set generated. A comprehensive analysis of these data from the Phase 2 exploratory trial evaluating bryostatin-1 as a treatment of cognitive deficits in moderate to severe AD were recently published in the Journal of Alzheimer's Disease, vol. 67, no. 2, pp. 555-570, 2019.  A total of 147 patients were enrolled into the study; 135 patients in the mITT population (as defined below) and 113 in the Completer population (as defined below). This study was the first repeat dose study of bryostatin-1 in patients with late stage AD (defined as a Mini Mental State Exam 2 (“MMSE-2”) of 4-15), in which two dose levels of bryostatin-1 were compared with placebo to assess safety and preliminary efficacy (p < 0.1, one-tailed) after 12 weeks of treatment. The pre-specified primary endpoint, the Severe Impairment Battery (the “SIB”) (used to evaluate cognition in severe dementia), compared each dose of bryostatin-1 with placebo at Week 13 in two sets of patients: (1) the modified intent-to-treat (the “mITT”) population, consisting of all patients who received study drug and had at least one efficacy/safety evaluation, and (2) the Completer population, consisting of those patients within the mITT population who completed the 13-week dosing protocol and cognitive assessments.

These announced top-line results indicated that the 20 µg dose, administered after two weekly 20 µg doses during the first two weeks and every other week thereafter, met the pre-specified primary endpoint in the Completer population, but not in the mITT population. Among the patients who completed the protocol (n = 113), the patients on the 20 µg dose at 13 weeks showed a mean increase on the SIB of 1.5 vs. a decrease in the placebo group of -1.1 (net improvement of 2.6, p < 0.07), whereas, in the mITT population, the 20 µg group had a mean increase on the SIB of 1.2 vs. a decrease in the placebo group of -0.8 (net improvement of 2.0, p < 0.134). At the pre-specified 5 week secondary endpoint, the Completer patients in the 20 µg group showed a net improvement of 4.0 SIB (p < .016), and the mITT population showed a net improvement of 3.0 (p < .056). Unlike the 20 µg dose, there was no therapeutic signal observed with the 40 µg dose.

The Alzheimer Disease Cooperative Study Activities of Daily Living Inventory Severe Impairment version (the “ADCS-ADL-SIV”) was another pre-specified secondary endpoint. The p values for the comparisons between 20 µg and placebo for the ADCS-ADL endpoint at 13 weeks were 0.082 for the Completers and 0.104 for the mITT population.

Together, these initial results after preliminary analysis of this exploratory trial, provided signals that bryostatin-1, at the 20 µg dose, caused sustained improvement in important functions that are impaired in patients with moderate to severe AD, i.e., cognition and the ability to care for oneself. Since many of the patients in this study were already taking donepezil and/or memantine, the efficacy of bryostatin-1 was evaluated in the Top Line results over and above the standard of care therapeutics.

The safety profile of bryostatin-1 20 µg was minimally different from the placebo group except for a higher incidence of diarrhea and infusion reactions (11% versus 2% for diarrhea and 17% versus 6% for infusion reactions). Fewer adverse events were reported in patients in the 20 µg group, compared to the 40 µg group. Patients dosed with 20 µg had a dropout rate less than or identical to placebo, while patients dosed at 40 µg experienced poorer safety and tolerability, and had a higher dropout rate. Treatment emergent adverse events (“TEAEs”) were mostly mild or moderate in severity. TEAEs, including serious adverse events, were more common in the 40 µg group, as compared to the 20 µg and placebo groups. The mean age of patients in the study was 72 years and similar across all three treatment groups.

Following presentation of the top line results in July 2017 at the Alzheimer’s Association International Conference in London, a much more extensive analysis of a complete set of the Phase 2 trial data was conducted.

On January 5, 2018, we announced that a pre-specified exploratory analysis of the comprehensive data set from our recent Phase 2 trial in patients with advanced AD found evidence of sustained improvement in cognition in patients receiving the 20 μg bryostatin regimen. As specified in the Statistical Analysis Plan (“SAP”), analysis of patients who did not receive memantine, an approved AD treatment, as baseline therapy showed greater SIB improvement. These findings suggested that this investigational drug could potentially treat AD itself and help reduce and/or reverse the progression of AD, in addition to alleviating its symptoms.

Comprehensive follow-on analyses found that patients in the 20 μg treatment arm showed a sustained improvement in cognition over baseline compared to the placebo group at an exploratory endpoint week 15 (30 days after last dose at week 11). These data were observed in the study population as a whole as well as in the Completers study group.

This follow-on analysis of the data evaluated SIB scores of patients at 15 weeks, 30 days after all dosing had been completed – a pre-specified exploratory endpoint. For the 20 μg group, patients in the mITT population (n=34) showed an overall improvement compared to controls (n=33) of 3.59 (p=0.0503) and in the Completers population (n=34) showed an overall improvement compared to controls (n=33) of 4.09 (p=0.0293). In summary, patients on the 20 μg dose showed a persistent SIB improvement 30 days after all dosing had been completed. These p-values and those below are one-tailed.

Additional analyses compared 20 µg dose patients who were on baseline therapy of Aricept vs. patients off Aricept. No significant differences were observed. Another analysis compared the 20 µg dose patients who were on or off baseline therapy of memantine. The secondary analysis comparing SIB scores in non-memantine versus memantine patients found the following:

Memantine, an NMDA receptor antagonist, is marketed under the brand names Namenda®, Namenda® XR, and Namzaric® (a combination of memantine and donepezil) for the treatment of dementia in patients with moderate-to-severe AD. It has been shown to delay cognitive decline and help reduce disease symptoms.

Further follow-on analyses used trend analyses (testing the dependence of treatment effect on repeated doses).

In the trend analyses, we found that the SIB values did not increase over time for the placebo patients resulting in slopes that were non-significantly different from zero (e.g., ‘zero-slopes’). In contrast, the SIB slopes for the 20 μg bryostatin patients who did not receive baseline memantine were found to be statistically significant (p<.001), giving a slope (95% CI) = 0.38 (0.18, 0.57) SIB points per week in the random intercept model, and a slope (95% CI) = 0.38 (0.18, 0.59) points per week in the random intercept and slope model. These results provided evidence that SIB improvement (drug benefit) increased as the number of successive bryostatin doses increased for the 20 μg patient cohort.

Confirmatory Phase 2 Clinical Trial

On May 4, 2018, we announced a confirmatory, 100 patient, double-blinded clinical trial for the safe, effective 20 μg dose protocol for advanced AD patients not taking memantine as background therapy to evaluate improvements in SIB scores with an increased number of patients. We engaged Worldwide Clinical Trials, Inc. (“WCT”), in conjunction with consultants and investigators at leading academic institutions, to collaborate on the design and conduct of the trial, which began in April 2018. During July 2018, the first patient was enrolled in this study. Pursuant to a new Services Agreement (the “New Services Agreement”) with WCT dated as of May 4, 2018, WCT provided services relating to the trial. The total estimated budget for the services, including pass-through costs, drug supply and other statistical analyses, was approximately $7.8 million. Of the total estimated study costs, as of September 30, 2019, we have incurred approximately $7.2 million in expenses of which WCT has represented a total of approximately $6.8 million and approximately $400,000 of expenses have been incurred to other trial-related vendors and consultants. In addition, we paid $1.2 million to WCT as prepaid deposits of which we have utilized the entire amount.

On September 9, 2019, the Company issued a press release announcing that the confirmatory Phase 2 study of bryostatin-1 in moderate to severe AD did not achieve statistical significance on the primary endpoint, which was changed from baseline to Week 13 in the SIB total score.

An average increase in SIB total score of 1.3 points and 2.1 points was observed for the bryostatin-1 and placebo groups, respectively, at Week 13. There were multiple secondary outcome measures in this trial, including the changes from baseline at Weeks 5, 9 and 15 in the SIB total score. No statistically significant difference was observed in the change from baseline in SIB total score between the bryostatin -1 and placebo treatment groups.

The confirmatory Phase 2 multicenter trial was designed to assess the safety and efficacy of bryostatin-1 as a treatment for cognitive deficits in patients with moderate to severe AD — defined as a Mini Mental State Exam 2 score of 4-15 – who are not currently taking memantine. Patients were randomized 1:1 to be treated with either bryostatin -1 20μg or placebo, receiving 7 doses over 12 weeks. Patients on memantine, an NMDA receptor antagonist, were excluded unless they had been discontinued from memantine treatment for a 30-day washout period prior to study enrollment. The primary efficacy endpoint was the change in the SIB score between the baseline and week 13. Secondary endpoints included repeated SIB changes from baseline SIB at weeks 5, 9, 13 and 15.

Further analyses of this confirmatory trial are expected be completed during the fourth quarter of 2019. We are continuing to determine how to proceed with respect to our current development programs for bryostatin-1.

Other Development Projects

To the extent resources permit, we may pursue development of selected technology platforms with indications related to the treatment of various disorders, including neurodegenerative disorders such as AD, based on our currently licensed technology and/or technologies available from third party licensors or collaborators.

For example, we have entered into a Cooperative Research and Development Agreement (“CRADA”) with the National Cancer Institute (“NCI”) for the research and clinical development of bryostatin-1. Under the CRADA, Neurotrope will collaborate with the NCI’s Center for Cancer Research, Pediatric Oncology Branch (“POB”) to develop a Phase I clinical trial testing the safety and toxicity of bryostatin-1 in children and young adults with CD22 + leukemia and B-cell lymphoma. In the growing era of highly effective immunotherapies targeting cell-surface antigens (e.g., CAR-T cell therapy), and the recognition that antigen modulation plays a critical role in evasion of response to immunotherapy, the ability for bryostatin-1 to upregulate CD22 may serve a synergistic role in enhancing the response to a host of CD22 targeted therapies. Under the CRADA, bryostatin-1 is expected to be tested in the clinic to evaluate its ability to modulate CD22 in patients with relapsed/refractory CD22+ disease, while evaluating safety, toxicity and overall response.

Comparison of the nine months ended September 30, 2019 and September 30, 2018

The following table summarizes our results of operations for the nine months ended September 30, 2019 and 2018:

Revenues

We did not generate any revenues for the nine months ended September 30, 2019 and 2018.

Operating Expenses

Overview

Total operating expenses for the nine months ended September 30, 2019 were $12,822,807 as compared to $7,369,337 for the nine months ended September 30, 2018, an increase of approximately 74%. The increase in total operating expenses is due primarily to an increase in our research and development principally from our recently concluded confirmatory Phase 2 clinical trial, general and administrative and stock-based, non-cash, compensation expenses.

Research and Development Expenses

For the nine months ended September 30, 2019, we incurred $0 of research and development expenses with a related party as compared to $225,793 for the nine months ended September 30, 2018. The total amounts incurred for the nine months ended September 30, 2018 consisted of patent expenses and lab testing of drug materials. We have discontinued utilizing our licensing partner CRE for patent expense and lab testing assistance.

For the nine months ended September 30, 2019, we incurred $4,273,531 in research and development expenses with non-related parties as compared to $2,450,566 for the nine months ended September 30, 2018. These expenses were incurred pursuant to developing the potential AD therapeutic product, specifically expenses relating to the recently concluded confirmatory Phase 2 clinical trial for AD. Of these expenses, for the nine months ended September 30, 2019, $3,647,450 was incurred principally relating to our confirmatory clinical trial and related storage of drug product, $584,745 for clinical consulting services, $20,729 of amortization of prepaid licensing fees relating to the Stanford and Mount Sinai license agreements and $20,607 for development of alternative drug supply with Stanford University as compared to, for the nine months ended September 30, 2018, a credit of $163,400 was reflected related to closing out our AD Phase 2 clinical trial, which was substantially completed in 2017, plus $2,407,936 incurred relating to our recently concluded confirmatory clinical trial, and related storage of drug product, $156,962 for clinical consulting services, $28,652 of amortization of prepaid licensing fees relating to the Stanford and Mount Sinai license agreements and $20,416 for development of alternative drug supply with Stanford University. We expect our research and development expenses to decrease, in the short term, as our confirmatory Phase 2 clinical trial was recently concluded. Other development might increase, as our resources permit, in order to advance our potential products. We are continuing to determine how to proceed with respect to our current development programs for bryostatin-1.

General and Administrative Expenses

We incurred related party general and administrative expenses totaling $37,500 for the nine months ended September 30, 2019 and 2018. The amounts for both years are attributable to director fees paid to certain members of the Board that are affiliates of CRE.

We incurred $5,165,096 and $2,980,105 of general and administrative expenses for the nine months ended September 30, 2019 and 2018, respectively, an increase of approximately 73%. Of the amounts for the nine months ended September 30, 2019, as compared to the comparable 2018 period: $1,625,174 was incurred primarily for wages, bonuses, vacation pay, severance, taxes and insurance, versus $1,265,331 for the 2018 comparable period. The increase for the nine months ending September 30, 2019 is principally based upon contractual bonus payments made to certain officers of $210,000 and the hiring of a new Chief Operating Officer; $573,018 was incurred for ongoing legal expenses associated with ongoing obligations, regulatory compliance and litigation versus $399,484 for the 2018 comparable period; $1,188,685 was incurred for outside operations consulting services, versus $394,524 for the 2018 comparable period as we incurred additional cash and non-cash expenses for banking consulting; $160,078 was incurred for travel expenses, versus $120,096 for the 2018 comparable period; $972,577 was incurred for investor relations services which included adding outside service providers to replace our internal investor relations staff person paid both in cash and non-cash compensation, versus $228,876 for the 2018 comparable period; $109,555 was incurred for professional fees associated with auditing, financial, accounting and tax advisory services, versus $105,992 for the 2018 comparable period; $361,494 was incurred for insurance, versus $321,970 for the 2018 comparable period; and $174,515 was incurred for utilities, supplies, license fees, filing costs, rent, advertising and other versus $143,832 for the 2018 comparable period.

Stock Based Compensation Expenses

We incurred related party non-cash expenses totaling $173,161 and $235,434 for the nine months ended September 30, 2019 and 2018, respectively. The decrease is primarily attributable to fully expensing certain options in 2018.

We incurred $3,173,519 and $1,439,939 of non-related party non-cash expenses for the nine months ended September 30, 2019 and 2018, respectively. The increase for the comparable period is primarily attributable to newly issued stock options during the first three months of 2019 which included awards with accelerated vesting terms and shareholder approval of certain options issued during the first three months of 2019 expensed during the third quarter of 2019.

Other Income, net

We earned $301,620 of interest income for the nine months ended September 30, 2019 as compared to $88,795 for the nine months ended September 30, 2018 on funds deposited in interest bearing money market accounts which were received from our December 2018 capital raise.

Net loss and loss per share

We incurred losses of $12,521,187 and $7,280,542 for the nine months ended September 30, 2019 and 2018, respectively. The increased loss was primarily attributable to our increase in expenses associated with our recently concluded confirmatory Phase 2 clinical trial, the increase in our general and administrative expenses and stock-based compensation expense, offset by discontinuing our related party research and development activities. Earnings (losses) per common share were ($0.97) and ($0.92) for the nine months ended September 30, 2019 and 2018, respectively. The increase in loss per share is primarily attributable to the increase in our net loss partially offset by an increase in weighted average common shares outstanding.

The computation of diluted loss per share for the nine months ended September 30, 2019 excludes 10,368,158 warrants and options to purchase 2,295,246 shares of our common stock as they are anti-dilutive due to our net loss. For the nine months ended September 30, 2018, the computation excludes 5,101,440 warrants and options to purchase 1,423,961 shares of our common stock, as they are anti-dilutive due to our net loss.

Comparison of the three months ended September 30, 2019 and September 30, 2018

The following table summarizes our results of operations for the three months ended September 30, 2019 and 2018:

Revenues

We did not generate any revenues for the three months ended September 30, 2019 and 2018.

Operating Expenses

Overview

Total operating expenses for the three months ended September 30, 2019 were $3,914,722 as compared to $3,202,752 for the three months ended September 30, 2018, an increase of approximately 22%. The increase in total operating expenses is due primarily to an increase in our general and administrative and stock-based, non-cash, compensation expenses offset by a decrease in our research and development expenses principally as our confirmatory Phase 2 clinical trial was winding down.

Research and Development Expenses

For the three months ended September 30, 2019, we incurred $0 of research and development expenses with a related party as compared to $62,900 for the three months ended September 30, 2018. The total amounts incurred during the three months ended September 30, 2018 consisted of patent expenses and lab testing of drug materials. We have discontinued utilizing our licensing partner CRE for patent expense and lab testing assistance.

For the three months ended September 30, 2019, we incurred $845,797 in research and development expenses with non-related parties as compared to $1,674,387 for the three months ended September 30, 2018. These expenses were incurred pursuant to developing the potential AD therapeutic product, specifically expenses relating to the recently concluded confirmatory Phase 2 clinical trial for AD. Of these expenses, for the three months ended September 30, 2019, $664,677 was incurred principally relating to our recently concluded confirmatory clinical trial and related storage of drug product, $165,033 for clinical consulting services, $7,480 of amortization of prepaid licensing fees relating to the Stanford and Mount Sinai license agreements and $8,607 for development of alternative drug supply with Stanford University as compared to, for the three months ended September 30, 2018, we incurred $1,575,925 relating to our recently concluded confirmatory Phase 2 clinical trial, and related storage of drug product, $84,590 for clinical consulting services, $7,917 of amortization of prepaid licensing fees relating to the Stanford and Mount Sinai license agreements and $5,955 for development of alternative drug supply with Stanford University. We expect our research and development expenses to decrease, in the short term, as our confirmatory Phase 2 clinical trial was recently concluded. Other development might increase, as our resources permit, in order to advance our potential products. 

General and Administrative Expenses

We incurred related party general and administrative expenses totaling $12,500 for the three months ended September 30, 2019 and 2018. The amounts for both years are attributable to director fees paid to certain members of the Board that are affiliates of CRE.

We incurred $2,131,205 and $904,729 of other general and administrative expenses for the three months ended September 30, 2019 and 2018, respectively, an increase of approximately 136%. Of the amounts for the three months ended September 30, 2019, as compared to the comparable 2018 period: $447,695 was incurred primarily for wages, bonuses, vacation pay, severance, taxes and insurance, versus $430,158 for the 2018 comparable period. The increase for the three months ending September 30, 2019 is principally based upon the hiring of our new Chief Operating Officer; $288,161 was incurred for ongoing legal expenses associated with ongoing obligations, regulatory compliance and litigation versus $120,307 for the 2018 comparable period as we incurred additional expenses relating to patent filings and maintenance costs incurred during the 2019 period; $764,747 was incurred for outside operations consulting services as we incurred additional cash and non-cash expenses for banking consulting, versus $86,250 for the 2018 comparable period; $48,769 was incurred for travel expenses, versus $29,966 for the 2018 comparable period; $350,654 was incurred for investor relations services which included adding outside service providers to replace our internal investor relations staff person paid both in cash and non-cash compensation, versus $60,690 for the 2018 comparable period; $24,768 was incurred for professional fees associated with auditing, financial, accounting and tax advisory services, versus $21,440 for the 2018 comparable period; $146,243 was incurred for insurance, versus $107,761 for the 2018 comparable period; and $60,168 was incurred for utilities, supplies, license fees, filing costs, rent, advertising and other versus $48,157 for the 2018 comparable period.

Stock Based Compensation Expenses

We incurred related party non-cash expenses totaling $47,695 and $60,498 for the three months ended September 30, 2019 and 2018, respectively. The decrease is primarily attributable to fully expensing certain options in 2018.

We incurred $877,525 and $487,738 of non-related party non-cash expenses for the three months ended September 30, 2019 and 2018, respectively. The increase for the comparable period is primarily attributable to newly issued stock options during the first three months of 2019 which included awards with accelerated vesting terms and shareholder approval of certain options issued during the first three months of 2019 expensed during the third quarter of 2019.

Other Income, net

We earned $90,159 of interest income for the three months ended September 30, 2019 as compared to $33,398 for the three months ended September 30, 2018 on funds deposited in interest bearing money market accounts which were received from our December 2018 capital raise.

Net loss and loss per share

We incurred losses of $3,824,563 and $3,169,354 for the three months ended September 30, 2019 and 2018, respectively. The increased loss was primarily attributable to our increase in general and administrative expenses and stock-based compensation expense, offset by our decrease in expenses associated with our confirmatory Phase 2 clinical trial as it was winding down and discontinuing our related party research and development activities. Earnings (losses) per common share were ($0.29) and ($0.40) for the three months ended September 30, 2019 and 2018, respectively. The decrease in loss per share is primarily attributable to the increase in our net loss partially offset by an increase in weighted average common shares outstanding.

The computation of diluted loss per share for the three months ended September 30, 2019 excludes 10,368,158 warrants and options to purchase 2,295,246 shares of our common stock as they are anti-dilutive due to our net loss. For the three months ended September 30, 2018, the computation excludes 5,101,440 warrants and options to purchase 1,423,961 shares of our common stock, as they are anti-dilutive due to our net loss.

Financial Condition, Liquidity and Capital Resources

Cash and Working Capital

Since inception, we have incurred negative cash flows from operations. As of September 30, 2019, we had an accumulated deficit of $86,203,280 and had working capital of $19,101,024 as compared to working capital of $26,500,467 as of December 31, 2018. The $7,399,443 decrease in working capital was primarily attributable to our net loss, excluding non-cash compensation and consulting expenses, of $7,817,361 plus capital expenditures of $5,214 offset by proceeds received from exercise of warrants, by outside investors, to purchase shares of common stock totaling $419,843.

Sources and Uses of Liquidity

Since inception, we have satisfied our operating cash requirements from the private placement of equity securities sold principally to outside investors. We expect to continue to incur expenses, resulting in losses and negative cash flows from operations, over at least the next several years as we may continue to develop AD and other therapeutic products. We anticipate that this development may include new clinical trials and additional research and development expenditures. We are continuing to determine how to proceed with respect to our current development programs for bryostatin-1.

Net Cash Used in Operating Activities

Cash used in operating activities was $10,367,137 for the nine months ended September 30, 2019, compared to $6,371,014 for the nine months ended September 30, 2018. The $3,996,123 increase primarily resulted from the increased net loss of approximately $5.2 million and decrease in payable of approximately $2.2 million, offset by the increase in non-cash stock-based compensation expenses of approximately $3.0 million offset by a utilization of prepaid expenses and other of approximately $540,000, for the nine months ended September 30, 2019.

Net Cash Used in Investing Activities

Net cash used in investing activities was $5,214 for the nine months ended September 30, 2019 compared to $3,186 for the nine months ended September 30, 2018. The cash used in investing activities for both periods was for capital expenditures.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $419,843 for the nine months ended September 30, 2019 compared to $4,427 for the nine months ended September 30, 2018. Net cash provided for the nine months ended September 30, 2019 and 2018 was the result of funds raised through exercise of warrants by investors in our historical private placements.

As of November 8, 2019, we had approximately $18.5 million in cash, cash equivalents and marketable investment securities. The Company expects that its existing capital resources will be sufficient to support our projected operating requirements over at least the next 24 months, including the potential continued development of bryostatin, our novel drug targeting the activation of PKC epsilon. We are continuing to determine how to proceed with respect to our current development programs for bryostatin-1, which will affect how our financial resources are deployed. Currently, our funds are anticipated to be used to make final payments relating to our recently concluded Phase 2 confirmatory study treating moderate to severe Alzheimer's patients, and to potentially conduct other non-clinical and research activities for our existing and other potential therapeutic products. We currently expect that the balance of the funds will be used for general corporate and working capital purposes, but that is subject to change based on how we determine to proceed with respect to our current development programs for bryostatin-1 and if we pursue any strategic alternatives. Our forecasted cash runway is based upon our current business plan, however if an alternative plan is enacted, this runway could vary materially.

We expect to require additional capital in order to initiate, pursue and complete all potential AD clinical trials, including the development of bryostatin for other potential product applications, or in connection with any strategic alternatives that we may pursue. Additional funding may not be available to us on acceptable terms, or at all. If we are unable to access additional funds when needed, we may not be able to initiate, pursue and complete all planned clinical trials or continue the development of our product candidates or we could be required to delay, scale back or eliminate some or all of our development programs and operations. Any additional equity financing, if available, may not be available on favorable terms, would most likely be significantly dilutive to our current stockholders and debt financing, if available, and may involve restrictive covenants. If we are able to access funds through collaborative or licensing arrangements, we may be required to relinquish rights to some of our technologies or product candidates that we would otherwise seek to develop or commercialize on our own, on terms that are not favorable to us. Our ability to access capital when needed is not assured and, if not achieved on a timely basis, will materially harm our business, financial condition and results of operations.