PART I – FINANCIAL INFORMATION Condensed Consolidated Financial Statements Alpha Cognition reported Q1 2025 revenues of $2.93 million and a net loss of $2.01 million, reflecting its commercial-stage transition Condensed Interim Consolidated Balance Sheets As of March 31, 2025, total assets were $48.61 million, slightly down from $50.74 million, driven by reduced cash Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $45,527,197 | $48,546,210 | | Total current assets | $48,118,956 | $50,251,178 | | Total assets | $48,608,419 | $50,736,938 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $2,807,397 | $3,350,752 | | Total liabilities | $7,796,544 | $9,273,893 | | Total stockholders' equity | $40,811,875 | $41,463,045 | | Total liabilities and stockholders' equity | $48,608,419 | $50,736,938 | Condensed Interim Consolidated Statements of Operations and Comprehensive Loss Q1 2025 total revenue reached $2.93 million, improving net loss to $2.01 million from $5.00 million in Q1 2024 Statement of Operations Summary (Unaudited, For the Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total revenue | $2,928,654 | $0 | | - Product, net | $346,929 | $0 | | - Licensing | $2,581,725 | $0 | | Total costs and expenses | $6,615,086 | $4,411,518 | | Selling, general and administrative expenses | $5,365,647 | $3,474,208 | | Research and development | $407,511 | $916,716 | | Net loss and comprehensive loss | $(2,006,543) | $(5,002,711) | | Loss per share, basic and diluted | $(0.13) | $(0.87) | Condensed Interim Consolidated Statements of Stockholders' Equity Stockholders' equity decreased to $40.81 million as of March 31, 2025, due to a $2.01 million net loss, partially offset by share-based compensation - The change in stockholders' equity for Q1 2025 was driven by a net loss of $2,006,543 and non-cash share-based compensation of $1,355,37311 Condensed Interim Consolidated Statements of Cash Flows Q1 2025 saw $2.04 million net cash used in operations, $0.83 million in financing, resulting in a $2.94 million decrease in cash, ending at $45.62 million Cash Flow Summary (Unaudited, For the Three Months Ended March 31) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,044,280) | $(2,471,492) | | Net cash used in investing activities | $(63,270) | $0 | | Net cash provided by (used in) financing activities | $(834,303) | $3,399,981 | | Change in cash and cash equivalents | $(2,941,853) | $928,489 | | Cash and cash equivalents, end of period | $45,622,229 | $2,423,062 | Notes to Condensed Consolidated Financial Statements Notes detail the company's commercial transition post-FDA approval of ZUNVEYL, covering revenue recognition, licensing, intangible asset life, and warrant liabilities - The company is a commercial-stage biopharmaceutical company focused on neurodegenerative diseases, having received FDA approval for ZUNVEYL in July 2024 for mild-to-moderate Alzheimer's disease1516 - In January 2025, the company entered into a license and collaboration agreement with CMS International, granting exclusive rights to commercialize ZUNVEYL in the Asia-Pacific region. The company received a $3.0 million upfront payment and is eligible for up to $41.0 million in future development, regulatory, and sales milestones, plus royalties131132 - Following a new patent grant, the estimated useful life of a related intangible license asset was extended from 5 years to 19 years, prospectively reducing amortization expense by approximately $14,400 for Q1 2025899091 - Certain warrants are classified as derivative liabilities due to features that fail the 'fixed-for-fixed' indexation test under ASC 815. These liabilities are revalued at each reporting period, resulting in a gain of $1,147,882 in Q1 2025112115119 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) MD&A discusses the company's commercial transition with ZUNVEYL's launch, highlighting new revenue, decreased R&D, increased SG&A, and sufficient liquidity Overview The company focuses on commercializing ZUNVEYL for Alzheimer's, launched in March 2024 at $749 per month WAC, and has pre-clinical programs - The company is now focused on the commercial sales of ZUNVEYL oral tablets for Alzheimer's Disease, which was launched on March 17, 2024171172 - The Wholesale Acquisition Cost (WAC) for ZUNVEYL has been set at $749 per month172 - The company's common shares began trading on The Nasdaq Capital Market under the symbol 'ACOG' on November 12, 2024, and were delisted from the CSE and OTCQB on December 17, 2024175 Results of Operations Q1 2025 net loss improved by 60% to $2.0 million due to $2.9 million new revenue, 56% R&D decrease, and 54% SG&A increase Comparison of Operations for the Three Months Ended March 31 | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total revenue | $2,928,654 | $0 | 100% | | Research and development | $407,511 | $916,716 | (56)% | | Selling, general and administrative expenses | $5,365,647 | $3,474,208 | 54% | | Net loss and comprehensive loss | $(2,006,543) | $(5,002,711) | (60)% | - R&D expenses decreased by $509,205 (56%) YoY, mainly due to lower product development costs and reduced allocation of management and employee time to R&D194 - General and administrative expenses increased by $1,891,439 (54%) YoY, driven by costs to support the commercial launch of ZUNVEYL, including a $1.7 million increase in employee costs and a $1.06 million increase in share-based compensation196 - A gain on warrant liabilities of $1,147,882 was recorded in Q1 2025, compared to a loss of $619,989 in Q1 2024, primarily due to the fluctuation in the company's stock price and the addition of new derivative warrants204 Liquidity and Capital Resources As of March 31, 2025, the company held $45.6 million in cash, deemed sufficient for 24 months, bolstered by a November 2024 public offering - The company had $45.6 million in cash and cash equivalents as of March 31, 2025, and believes it has sufficient capital to fund operations for at least the next 24 months178209 - In November 2024, the company completed a public offering, issuing 8,695,653 common shares for gross proceeds of approximately $50 million216 - The company expects expenses to increase substantially with the commercialization of ZUNVEYL and may need to raise additional capital to fully execute its plans207209 Cash Flow Summary (For the Three Months Ended March 31) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Cash used in operating activities | $(2,044,280) | $(2,471,492) | | Cash used in investing activities | $(63,270) | $0 | | Net cash provided by (used in) financing activities | $(834,303) | $3,399,981 | Critical Accounting Policies and Estimates Critical accounting policies involve significant judgment in valuing share-based payments, warrant liabilities, intangible asset useful lives, and impairment - Key estimates involve valuing equity securities, the fair value of warrant liabilities, useful lives of intangible assets, and impairment assessments228 - Share-based compensation and liability-based awards are valued using the Black-Scholes model, which requires subjective inputs like expected volatility and term236239 - The company has elected to use the extended transition period for complying with new or revised accounting standards available to emerging growth companies248 - Management's going concern analysis concludes that existing cash is sufficient to fund operations and capital expenditures for at least the next 12 months from the date of the Form 10-Q filing241 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Alpha Cognition Inc. is exempt from providing market risk disclosures - The company is a smaller reporting company and is not required to provide information under this item250 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective251 - No material changes to the company's internal control over financial reporting occurred during the first quarter of 2025252 PART II – OTHER INFORMATION Legal Proceedings The company is not currently a party to any material legal proceedings, though it may face ordinary course litigation - As of the filing date, the company is not a party to any material legal proceedings254 Risk Factors No material changes have occurred to the risk factors previously disclosed in the Annual Report on Form 10-K for 2024 - No material changes have occurred from the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2024255 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity sales occurred; $5.84 million of $46.15 million public offering net proceeds used for ZUNVEYL commercialization and operations - There were no unregistered sales of equity securities during the quarter256 - From the November 2024 public offering net proceeds of ~$46.15M, the company has used ~$2.27M for ZUNVEYL commercialization, ~$1M for CMC activities, and ~$2.57M for working capital, with ~$40.3M remaining as of March 31, 2025258259 Other Information No other material information was reported for the quarter, and no Rule 10b5-1 trading arrangements were adopted or modified - During the quarter ended March 31, 2025, no directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements263 Exhibits This section lists exhibits filed with the Form 10-Q, including corporate articles, warrant forms, and CEO/CFO certifications - The report includes standard exhibits such as articles of incorporation, forms of securities, and CEO/CFO certifications as required by the SEC264
Alpha Cognition Inc(ACOG) - 2025 Q1 - Quarterly Report