Overview

Klotho Neurosciences, Inc. (the “Company” or “Klotho”) is a biopharmaceutical company that develops essential medicines for the treatment of chronic diseases, including cancer, cardiovascular, and neurodegenerative disorders. The company has acquired two licensed platforms: a generic drug portfolio and a biosimilar biologics platform that uses biologic therapies to treat cancer. Additionally, Klotho has two proprietary, patented technologies involving the melanocortin receptor-binding molecules and a gene therapy platform that uses a gene therapy approach to introduce a therapeutic protein called “Klotho” to treat neurodegenerative diseases.

In May 2023, Klotho (formerly known as ANEW Medical, Inc.) entered into a Business Combination Agreement with Redwoods Acquisition Corp., a special purpose acquisition company (SPAC). The merger was completed on June 21, 2024, with Redwoods acquiring ANEW and changing its name to Klotho Neurosciences, Inc.

Critical Accounting Policies and Estimates

The company’s critical accounting policies and estimates are detailed in Note 2 of the financial statements.

Results of Operations

Klotho has not generated any operating revenues to date. The company’s operations have consisted of acquiring licensed platforms and patents, as well as planning for the business combination with Redwoods.

Revenues

The company had no revenue for the nine months ended September 30, 2024, and September 30, 2023.

Operating Expenses

Klotho’s operating expenses are primarily composed of consultant fees and professional fees. For the three months ended September 30, 2024, operating expenses were $2,870,932, compared to $123,737 for the same period in 2023, an increase of $2,747,195. This increase was primarily due to increased share-based compensation expense.

For the nine months ended September 30, 2024, operating expenses were $3,688,584, compared to $520,589 for the same period in 2023, an increase of $3,167,995. This increase was primarily due to increased share-based compensation expense, as well as expenses associated with the business combination, including increases in third-party consulting fees and professional fees.

Net Loss

For the three months ended September 30, 2024, the company incurred a net loss of $2,959,426, compared to a net loss of $144,111 for the same period in 2023. The increase in net loss was primarily due to increased share-based compensation expense.

For the nine months ended September 30, 2024, the company incurred a net loss of $4,083,109, compared to a net loss of $580,983 for the same period in 2023, an increase of $3,502,126. The increase in net loss was primarily due to increased stock-based compensation expense, as well as expenses associated with preparing for the business combination, including increases in third-party consulting fees and professional fees.

Liquidity and Capital Resources

Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2024, was $2,002,358, compared to $247,406 for the same period in 2023, an increase of approximately $1,755,000. The significant increase in cash used in operating activities is primarily attributable to increases in expenses related to the business combination and continued operating costs.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2024, was $123,497, compared to $76,325 for the same period in 2023, an increase of approximately $47,000. The increase in cash used in investing activities is primarily attributable to licensing payments made during the period.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2024, was $2,173,942, which consisted of investments, proceeds from the business combination, as well as proceeds from related parties. For the nine months ended September 30, 2023, net cash provided by financing activities was $250,000, from repayment of an advance to a shareholder.

Liquidity, Capital Resources, and Going Concern

As of September 30, 2024, the company had cash of $50,895 and net working capital of $(827,783). The company has incurred and expects to continue to incur significant professional costs to remain as a publicly traded company and incurred significant transaction costs related to the consummation of the business combination.

The company has incurred significant operating losses and negative cash flows from operations since inception. As of September 30, 2024, the company had cash of approximately $51,000 and an accumulated deficit of approximately $8.5 million. The company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities in order to continue to execute its development plans and continue operations. Without additional funding, there is substantial doubt about the company’s ability to continue as a going concern for twelve months from the date of these financial statements.

Off-Balance Sheet Arrangements

The company has no off-balance sheet arrangements as of September 30, 2024.

Emerging Growth Company Status

Klotho Neurosciences, Inc. is an “emerging growth company” as defined in the JOBS Act. As such, the company may choose to take advantage of various reporting requirements and other benefits that are available to emerging growth companies, including not being required to have its independent registered public accounting firm audit its internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

The company will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of its initial public offering; (ii) the first fiscal year after its annual gross revenue are $1.07 billion or more; (iii) the date on which it has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which the market value of its common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.