Alpha Cognition Inc(ACOG) - 2024 Q4 - Annual Report

PART I Business The company is a biopharmaceutical firm focused on commercializing its newly FDA-approved Alzheimer's drug, ZUNVEYL™ - The company's lead product, ZUNVEYL™ (formerly ALPHA-1062), received FDA approval on July 26, 2024, for the treatment of mild to moderate dementia of the Alzheimer's type[20] - The commercial strategy for ZUNVEYL focuses on the U.S. long-term care (LTC) market, representing 36% of the acetylcholinesterase inhibitor (AChEI) prescription market, with a launch announced on March 19, 2025[28][57][60] Product Pipeline Overview | Product Candidate | Indication | Development Stage | | :--- | :--- | :--- | | ZUNVEYL™ (Oral Tablet) | Mild-to-Moderate Alzheimer's Disease | FDA Approved & Commercial Launch | | ZUNVEYL™ + Memantine | Moderate-to-Severe Alzheimer's Disease | Pre-clinical | | ALPHA-1062 (Sublingual) | Mild-to-Moderate Alzheimer's (Dysphagia) | Pre-clinical | | ALPHA-1062IN (Intranasal) | Cognitive Impairment with mTBI | Pre-clinical | | ALPHA-0602, 0702, 0802 | ALS and other Neurodegenerative Diseases | Pre-clinical (for out-licensing) | - The company entered an exclusive licensing agreement with China Medical System Holdings Limited (CMS) for ZUNVEYL in Asia, Australia, and New Zealand, with terms totaling $44 million plus royalties[59] - The company possesses a significant intellectual property portfolio for ZUNVEYL, with patents potentially extending protection beyond 2042[90][92] Risk Factors The company faces substantial risks in its financial position, product dependency, manufacturing, and regulatory compliance - The company is a commercial development stage entity with a history of significant net losses, reporting a net loss of approximately $12.4 million for FY2024 and an accumulated deficit of approximately $74 million[191] - The business is heavily dependent on the successful commercialization of ZUNVEYL, its only FDA-approved product, and has no prior commercialization history[193][194][207] - Substantial additional capital will be required to fund commercialization and development, and failure to raise capital could force program delays or elimination[198] - The company relies on third-party suppliers for manufacturing, including a key manufacturer in Taiwan, exposing it to supply chain, geopolitical, and quality control risks[267][268][272] - Success depends on obtaining and maintaining patent protection, which can be challenged, and some key patents are set to expire in 2026[286][295][303] - The regulatory approval process is lengthy and unpredictable, and ZUNVEYL remains subject to ongoing regulatory scrutiny and post-marketing requirements[343][348] Unresolved Staff Comments The company reports no unresolved staff comments from the SEC - None[428] Cybersecurity The company manages cybersecurity risks through a program overseen by the CFO and the audit committee, with third-party support - The company utilizes a third-party service provider, under the direction of the CFO, to help identify, assess, and manage cybersecurity threats[430][433] - The audit committee of the board of directors is responsible for overseeing the company's cybersecurity risk management processes[436][440] - The CFO is responsible for implementing and maintaining cybersecurity processes, including managing external providers and reporting incidents to the audit committee[437][438][439] Properties The company does not own or lease any real estate for its corporate or laboratory facilities - The Company does not own or rent any real estate for its corporate head office and laboratory facilities[441] - The corporate head office is located at Suite 1200 – 750 West Pender Street, Vancouver, BC, V6C 2T8[442] Legal Proceedings The company is not currently a party to any material legal proceedings - The company is not currently a party to any material legal proceedings[443] Mine Safety Disclosures This item is not applicable to the company - Not applicable[443] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common shares began trading on Nasdaq in November 2024, and it does not plan to pay dividends - On November 12, 2024, the company's common shares began trading on Nasdaq under the symbol "ACOG" after a 1-for-25 reverse stock split on November 5, 2024[445] - The company has never paid dividends and does not expect to in the foreseeable future, intending to reinvest any future earnings into growth[447] - During fiscal year 2024, the company conducted several unregistered sales of equity securities, including a private placement, convertible notes, and warrants[448][455] [Reserved] This item is reserved Management's Discussion and Analysis of Financial Condition and Results of Operations The company's net loss increased to $14.6 million in 2024 due to commercial launch costs, with sufficient cash for the next year Key Financial Results (Year Ended Dec 31) | Metric | 2024 | 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Research and Development | $3,918,543 | $4,883,973 | (20)% | | General and Administrative | $7,942,112 | $5,054,120 | 57% | | Net Operating Loss | ($11,860,655) | ($9,938,093) | 19% | | Net Loss | ($14,636,865) | ($13,763,658) | 6% | | Net Loss Per Share | ($2.02) | ($3.84) | (47)% | - As of December 31, 2024, the company had $48.6 million in cash and cash equivalents and an accumulated deficit of $76.3 million, with sufficient capital for at least the next 12 months[471][543] - The company completed a public offering on November 13, 2024, raising gross proceeds of approximately $50 million, which triggered the conversion of $4.545 million in convertible notes[517][518] - Effective August 31, 2023, the company changed its functional currency from the Canadian Dollar (CAD) to the U.S. Dollar (USD)[530] Quantitative and Qualitative Disclosures About Market Risk This item is not applicable to the company - Not Applicable[552] Financial Statements and Supplementary Data This section presents the company's audited consolidated financial statements for fiscal years 2024 and 2023 Consolidated Balance Sheet Highlights (As of Dec 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Assets | $50,736,938 | $2,452,170 | | Cash and cash equivalents | $48,546,210 | $1,404,160 | | Total Liabilities | $9,273,893 | $7,155,865 | | Total Stockholders' Equity (Deficiency) | $41,463,045 | ($4,703,695) | Consolidated Cash Flow Highlights (Year Ended Dec 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Cash used in operating activities | ($7,755,654) | ($8,799,565) | | Net cash provided by financing activities | $54,851,864 | $8,230,015 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no disagreements with its independent accounting firm on accounting or financial disclosure matters - There have been no disagreements with the company's Independent Registered Public Accounting Firm[727] Controls and Procedures Management concluded that disclosure controls were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that as of December 31, 2024, the company's disclosure controls and procedures were effective[728] - A management report on internal control over financial reporting is not included due to the transition period for newly public companies[729] - No material changes were made to the company's internal control over financial reporting during the quarter ended December 31, 2024[730] Other Information The company reports no other information and no new director or officer trading plans were adopted during the quarter - No directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fourth quarter of 2024[732] Disclosure Regarding Foreign Jurisdictions That Prevent Inspections This item is not applicable to the company - Not applicable[731] PART III Directors, Executive Officers and Corporate Governance Required information on directors, officers, and governance is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the upcoming 2025 Proxy Statement[734] Executive Compensation Required information on executive compensation is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the upcoming 2025 Proxy Statement[735] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Required information on security ownership is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the upcoming 2025 Proxy Statement[736] Certain Relationships and Related Transactions, and Director Independence Required information on related transactions and director independence is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the upcoming 2025 Proxy Statement[737] Principal Accountant Fees and Services Information on principal accountant fees and services is incorporated by reference from the 2025 Proxy Statement - The company's independent public accounting firm is Manning Elliott, Vancouver, British Columbia, Canada, PCAOB Auditor ID: 1524[738] - Information on fees and services is incorporated by reference from the upcoming 2025 Proxy Statement[739] PART IV Exhibits and Financial Statements Schedules This section lists the financial statements and exhibits filed as part of the annual report - This section lists the consolidated financial statements filed under Item 8 and all exhibits filed with the report, including corporate documents, material contracts, and certifications[742][744] Form 10-K Summary The company has elected not to provide a summary for this item - None[745]