Cognition Therapeutics(CGTX) - 2025 Q1 - Quarterly Report

Cautionary Note on Forward-Looking Statements This report contains forward-looking statements concerning the company's business, operations, and financial performance - This report contains forward-looking statements concerning the company's business, operations, and financial performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially. Readers are cautioned not to place undue reliance on these statements[8] - Key risks and uncertainties include the ability to raise additional capital, continue as a going concern, the success of clinical trials for the lead product candidate zervimesine (CT1812), regulatory approvals, and competition[8][11] Part I. Financial Information Item 1. Financial Statements (unaudited) Unaudited Q1 2025 financials show a $8.48 million net loss and $16.4 million cash, raising substantial doubt about going concern Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $23.5 million from $30.2 million at year-end 2024, mainly due to reduced cash Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $16,428 | $25,009 | | Total current assets | $22,866 | $29,555 | | Total assets | $23,500 | $30,234 | | Liabilities & Equity | | | | Total current liabilities | $10,950 | $11,142 | | Total liabilities | $11,230 | $11,484 | | Total stockholders' equity | $12,270 | $18,750 | Consolidated Statements of Operations and Comprehensive Loss Q1 2025 net loss improved to $8.48 million (or $0.14 per share) from $9.15 million in Q1 2024, driven by lower G&A expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Research and development | $10,786 | $10,553 | | General and administrative | $2,989 | $3,549 | | Total operating expenses | $13,775 | $14,102 | | Grant income | $5,086 | $4,912 | | Net loss | $(8,480) | $(9,151) | | Net loss per share (basic & diluted) | $(0.14) | $(0.27) | Consolidated Statements of Cash Flows Net cash used in operations increased to $9.9 million in Q1 2025, while financing cash decreased to $1.3 million, resulting in an $8.6 million net cash decrease Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,877) | $(7,244) | | Net cash used in investing activities | $0 | $0 | | Net cash provided by financing activities | $1,296 | $11,993 | | Net (decrease) increase in cash | $(8,581) | $4,749 | Notes to Consolidated Financial Statements Notes detail critical liquidity, with $16.4 million cash insufficient for 12 months, raising substantial doubt about going concern - The company's cash and cash equivalents of $16.4 million as of March 31, 2025, are not sufficient to fund operations for the next year, which raises substantial doubt about its ability to continue as a going concern[29][30] - During Q1 2025, the company sold 2,004,729 shares of common stock under its ATM agreement for gross proceeds of approximately $1.5 million[27][28] - The company recognized $5.1 million in grant income for Q1 2025, primarily from reimbursements from the National Institute of Aging (NIA) for research[37] - Total equity-based compensation expense was $0.59 million in Q1 2025, a decrease from $1.17 million in Q1 2024[86] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, liquidity, and outlook, highlighting positive Phase 2 data for Alzheimer's and DLB, strategic focus on dementia programs, and urgent need for funding Overview Cognition Therapeutics, a clinical-stage biopharmaceutical company, focuses on zervimesine for degenerative diseases, reporting positive Phase 2 results for Alzheimer's and DLB, while discontinuing the dAMD study - The Phase 2 SHINE study in mild-to-moderate Alzheimer's Disease met its primary safety endpoints. A prespecified analysis showed that patients with baseline plasma p-tau217 below the median experienced a 95% reduction in cognitive decline[93][94] - The Phase 2 SHIMMER study in Dementia with Lewy Bodies (DLB) met its primary safety endpoints and demonstrated benefits across behavioral, functional, cognitive, and motor scales compared to placebo[97][98] - The company voluntarily discontinued the Phase 2 MAGNIFY study for geographic atrophy (dAMD) to focus resources on its AD and DLB programs. The decision was not due to safety concerns[99] Results of Operations Q1 2025 total operating expenses decreased to $13.8 million, with R&D up slightly and G&A down, contributing to a reduced net loss of $8.5 million compared to Q1 2024 Comparison of Operations (in thousands) | Item | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $10,786 | $10,553 | $233 | | General and administrative | $2,989 | $3,549 | $(560) | | Loss from operations | $(13,775) | $(14,102) | $327 | | Grant income | $5,086 | $4,912 | $174 | | Net loss | $(8,480) | $(9,151) | $671 | - The $0.2 million increase in R&D expenses was primarily driven by a $0.5 million rise in clinical program costs for Phase 2 trials, partially offset by a $0.4 million decrease in manufacturing costs[121] Liquidity and Capital Resources The company's liquidity is critical, with $16.4 million cash as of March 31, 2025, sufficient only into Q4 2025, raising substantial doubt about its ability to continue as a going concern and necessitating additional funding - As of March 31, 2025, the company had $16.4 million in cash and cash equivalents[128] - Management believes existing cash will fund operations into the fourth quarter of 2025, which is not sufficient for the next twelve months from the filing date[128] - The company has access to additional capital through its ATM program (approx. $20.4 million remaining) and the Lincoln Park Purchase Agreement (approx. $34.8 million remaining), subject to market conditions and other limitations[126] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a 'smaller reporting company,' Cognition Therapeutics is not required to provide the information for this item - The company is exempt from this disclosure requirement due to its status as a 'smaller reporting company'[148] Item 4. Controls and Procedures As of March 31, 2025, management concluded that disclosure controls and procedures, along with internal control over financial reporting, were effective with no material changes - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[149] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[152] Part II. Other Information Item 1. Legal Proceedings The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - As of the filing date, the company is not aware of any pending legal actions that would have a material adverse effect on its business and operations[156] Item 1A. Risk Factors The company adds a new risk factor concerning potential disruptions at the FDA and other government agencies, which could delay product development and approval - A new risk factor was added regarding potential disruptions to the FDA and other government agencies due to funding issues, personnel changes, or policy shifts[159] - These disruptions could slow the review and approval of new drugs, negatively impacting the company's business[160] - Uncertainty surrounding the 2025 U.S. presidential administration change could create new challenges or a more costly environment for therapeutic development[162][164] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of the company's equity securities during the quarter ended March 31, 2025 - The company reports no unregistered sales of its equity securities during the fiscal quarter[165] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[167] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[168] Item 5. Other Information The company reports no other information for this item - None[169] Item 6. Exhibits This section lists exhibits filed with Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer - The exhibits include certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[170]