Business Overview and Company History
Bullfrog AI Holdings, Inc. (BFRG) is a pioneering company focused on leveraging advanced Artificial Intelligence and Machine Learning (AI/ML) technologies to drive innovation in the pharmaceutical and healthcare industries. With its proprietary bfLEAP platform, the company is revolutionizing the drug development process, aiming to improve the odds of success at every stage, from pre-clinical to late-stage clinical trials.
Bullfrog AI Holdings, Inc. was incorporated in the State of Nevada in February 2020, with operations commencing in the same year. The company is the parent of Bullfrog AI, Inc. and Bullfrog AI Management, LLC, which were incorporated in Delaware and Maryland in 2017 and 2021, respectively. All of Bullfrog AI’s operations are currently conducted through the parent company, Bullfrog AI Holdings, Inc.
The company’s founding mission is to utilize its AIML capabilities, particularly its bfLEAP platform, to advance medicines through partnerships with biopharmaceutical companies, as well as through its own internal drug development programs. The bfLEAP platform was originally developed at the prestigious Johns Hopkins University Applied Physics Laboratory (JHU-APL) and was exclusively licensed by Bullfrog AI in February 2018. This initial license covered three issued patents, one provisional patent application, and non-patent rights to proprietary algorithms and trade secrets.
In September 2020 and October 2021, the company executed amendments to the original 2018 license, which represented improvements and new advanced analytics capabilities. As part of the consideration for the original license agreement, Bullfrog AI granted JHU-APL 178,570 warrants exercisable at $2.10 per share.
In July 2022, Bullfrog AI further expanded its intellectual property rights by entering into an exclusive, worldwide, royalty-bearing license from JHU-APL. This new license provided additional patents, copyrights, and know-how to be utilized under the bfLEAP analytical AIML platform. In consideration, the company issued 39,880 shares of common stock to JHU-APL.
The company has also acquired the rights to various pre-clinical and early-stage drug assets from universities, such as a glioblastoma brain cancer drug from Johns Hopkins University and a hepatocellular carcinoma liver cancer drug from George Washington University. Additionally, Bullfrog AI has entered into a strategic collaboration with the Lieber Institute for Brain Development (LIBD) to analyze its extensive repository of post-mortem brain data using the bfLEAP platform.
Business Segments
Bullfrog AI operates in three main business segments:
Proprietary Development Segment In this segment, Bullfrog AI leverages its bfLEAP platform to advance its own internal drug development programs. The company has secured exclusive, worldwide, royalty-bearing licenses from universities such as JHU and George Washington University for various drug assets targeting conditions like glioblastoma, hepatocellular carcinoma, and other cancers. Bullfrog AI is using its AI/ML capabilities to analyze preclinical and clinical data with the goal of de-risking and accelerating the development of these licensed drug candidates. As of September 30, 2024, the company has not generated any revenue from its proprietary drug development activities, as these programs are still in the early stages.
Digital Transformation Segment This segment generates revenue by providing the bfLEAP platform and analytical services to biopharmaceutical companies and other organizations. The company’s strategic partnerships and collaborations aim to leverage its AI/ML capabilities to analyze complex data sets and provide insights that can streamline drug development processes. In the third quarter of 2023, Bullfrog AI completed its first commercial service contract and recognized $65,000 in revenue. However, the company did not generate any revenue during the nine months ended September 30, 2024, as it continues to build out its service offerings and expand its customer base.
Bio Health Segment Through its partnerships and licensing agreements, Bullfrog AI has acquired rights to leverage its bfLEAP platform for target discovery and analytics in various biomedical research areas, such as its collaboration with the Lieber Institute for Brain Development to analyze large, proprietary data sets. The company intends to monetize these bio health initiatives through strategic partnership deals with biopharmaceutical companies, but has not yet recognized any revenue from these activities as of September 30, 2024.
Financial Ratios and Scale of Business
As of September 30, 2024, Bullfrog AI Holdings, Inc. reported a cash balance of $4.24 million, with total assets of $4.60 million and total liabilities of $779,040. The company’s current ratio stood at 5.90, indicating a strong liquidity position. The quick ratio was also 5.90, further emphasizing the company’s ability to meet short-term obligations.
However, the company has yet to generate significant revenues, reporting no revenue for the nine months ended September 30, 2024. This is consistent with the company’s focus on R&D and platform development during its early stages. The company’s net loss for the nine-month period was $5.28 million, with negative operating and free cash flows of $4.34 million and $4.34 million, respectively.
For the most recent fiscal year (2023), Bullfrog AI reported revenue of $65,000, a net loss of $5,355,869, and negative operating cash flow and free cash flow of $6,001,299 each. In the most recent quarter (Q3 2024), the company reported no revenue, a net loss of $1,763,464, and negative operating cash flow and free cash flow of $1,206,065 and $1,206,060, respectively.
The company’s debt-to-equity ratio as of September 30, 2024, was 0.045, indicating a low level of leverage. Bullfrog AI had access to short-term insurance premium financing arrangements, with $172,000 outstanding as of September 30, 2024.
Bullfrog AI’s capital-raising efforts have been crucial to funding its operations. In February 2023, the company completed its initial public offering (IPO), raising approximately $8.40 million in gross proceeds. Additionally, in February 2024, the company received $5.70 million in net proceeds from an underwritten secondary public offering of common stock and warrants. Most recently, in October 2024, the company closed a $2.70 million registered direct offering and concurrent private placement.
Solvency and Liquidity
While Bullfrog AI has been operating at a loss and consuming cash, the company’s recent capital raises have bolstered its liquidity. As of September 30, 2024, the company had a cash balance of $4.24 million, which management believes is sufficient to fund planned operations into the fourth quarter of 2025, in the absence of significant revenues during 2024 and 2025.
However, the company will require additional capital to continue executing its strategy, which may involve further equity or debt financing, as well as potential licensing agreements and collaborative arrangements. The company’s ability to secure such funding on favorable terms will be crucial to its ongoing operations and development activities.
Risks and Challenges
Bullfrog AI’s success is heavily dependent on the continued development and advancement of its proprietary bfLEAP platform. Any setbacks or technological hurdles in enhancing the platform’s capabilities could significantly impact the company’s ability to deliver on its value proposition to biopharmaceutical partners and for its internal drug development programs.
Additionally, the company’s reliance on strategic partnerships and collaborations, such as the agreement with LIBD, exposes it to risks related to the availability and continued access to proprietary data sets. The termination or disruption of these partnerships could hamper Bullfrog AI’s target discovery efforts and overall business strategy.
The highly competitive nature of the pharmaceutical and healthcare technology industries also poses challenges for Bullfrog AI. The company must continually innovate and stay ahead of both established players and emerging competitors in the AIML-driven drug development space.
Lastly, as a relatively young and pre-revenue company, Bullfrog AI faces the typical risks associated with scaling its operations, maintaining regulatory compliance, and attracting and retaining top talent to execute its ambitious plans.
Guidance and Outlook
Bullfrog AI has not provided specific financial guidance for the upcoming fiscal year or long-term outlook. However, the company has stated that it is focused on several key initiatives to drive its business forward, including:
The company’s ability to execute on these initiatives and navigate the inherent challenges of the industry will be critical in determining its long-term success and shareholder value creation.
Recent Developments
Bullfrog AI has reported increased research and development expenses, which reached $566,580 and $1.63 million for the three and nine month periods ended September 30, 2024, respectively. This increase is attributed to the expansion of the company’s technical staff and the ramp-up of its target discovery and preclinical research efforts.
Similarly, general and administrative expenses have grown to $1.25 million and $3.84 million for the three and nine month periods ended September 30, 2024, driven by increased personnel costs and equity compensation.
It’s worth noting that the company operates primarily in the United States and, as of the latest available information, there have been no publicly disclosed scandals, short seller reports, or CEO departures for Bullfrog AI Holdings, Inc.
Conclusion
Bullfrog AI Holdings, Inc. (BFRG) is a pioneering company at the intersection of artificial intelligence, machine learning, and drug development. With its proprietary bfLEAP platform, the company is poised to revolutionize the pharmaceutical industry by improving the odds of success at every stage of the drug development process. While the company is currently in the early stages of its growth and faces several risks, its innovative approach, strategic partnerships, and recent capital raises provide a strong foundation for future development and potential value creation for shareholders. The company’s focus on leveraging AI/ML capabilities across its three business segments – Proprietary Development, Digital Transformation, and Bio Health – positions it uniquely in the rapidly evolving landscape of pharmaceutical and healthcare technology. As Bullfrog AI continues to advance its internal drug development programs and expand its service offerings, investors and industry observers will be closely watching its progress in translating its technological advantages into tangible clinical and commercial successes.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.