Cognition Therapeutics(US:CGTX)2022-05-10 16:00Financial Performance - As of March 31, 2022, the company had an accumulated deficit of $97.8 million and incurred a net loss of $3.8 million for the three months ended March 31, 2022[111]. - Net loss for the three months ended March 31, 2022, was $3.8 million, compared to a net income of $0.2 million for the same period in 2021, a change of $4.0 million[134]. - Cash flows used in operating activities were $3.0 million for the three months ended March 31, 2022, compared to $0.8 million for the same period in 2021, indicating a significant increase in cash outflow[153]. - The effective tax rate for the three months ended March 31, 2022, was (3.4%), compared to 0.0% for the same period in 2021[132]. Funding and Grants - The company has received approximately $168.9 million in cumulative grant awards, primarily from the National Institute on Aging (NIA), to fund clinical trials, including an $81.0 million grant for a Phase 2 study of CT1812[127]. - Grant income was $5.9 million for the three months ended March 31, 2022, compared to $4.7 million for the same period in 2021, reflecting an increase of $1.2 million[138]. - The company will need substantial additional funding to support operations and pursue growth strategies until it can generate significant revenue from product sales[114]. - The company anticipates needing to raise additional funding in the future to support ongoing and future product development, including commercialization efforts[146]. Expenses and Costs - The company expects to incur significant and increasing expenses and net losses for the foreseeable future as it advances product candidates through clinical development and seeks regulatory approval[112]. - General and administrative expenses are expected to increase significantly due to the costs associated with operating as a public company following the IPO[125]. - Research and development expenses increased to $6.5 million for the three months ended March 31, 2022, compared to $4.4 million for the same period in 2021, representing a $2.1 million increase[135]. - General and administrative expenses rose to $2.9 million for the three months ended March 31, 2022, up from $1.2 million in the same period of 2021, an increase of $1.7 million[137]. - The company anticipates substantial increases in research and development expenses as product candidates advance into later stages of development[123]. Operational Challenges - The ongoing COVID-19 pandemic has adversely affected patient enrollment in clinical trials, potentially impacting the progress of CT1812[117]. - The company relies on third parties for the manufacture of CT1812 and expects to continue this strategy to maintain an efficient infrastructure[116]. Cash and Assets - Cash and cash equivalents as of March 31, 2022, were $51.5 million, with net proceeds of approximately $44.2 million from the IPO completed on October 13, 2021[112]. - As of March 31, 2022, the company had $51.5 million in cash and cash equivalents, with no positive cash flows from operations generated to date[145]. - Net cash used in investing activities was $0.1 million for the three months ended March 31, 2022, related to purchases of fixed assets[156]. - Net cash provided by financing activities was $9.0 million for the three months ended March 31, 2021, primarily from the issuance of SAFEs[157]. Contracts and Obligations - As of March 31, 2022, total contractual obligations amount to $744,000, with operating lease obligations of $190,000 for less than one year, $193,000 for 1 to 3 years, $170,000 for 3 to 5 years, and $191,000 for more than 5 years[158]. - The company entered into a lease agreement for 2,864 square feet of office space in Purchase, New York, with an annual base rent of less than $0.1 million for the first year, subject to annual increases of 1.82% to 2.04%[159][160]. - An insurance premium financing arrangement was established, financing $1.5 million at a 3.25% annual interest rate, with monthly payments of $0.1 million due until September 2022; as of March 31, 2022, the outstanding principal was $0.8 million[161]. Compensation and Equity - Total unrecognized compensation expense related to unvested time-based vesting awards was $9.6 million, expected to be recognized over a weighted-average remaining vesting period of approximately 3.1 years[174]. - The company maintains an equity-based compensation plan allowing for various forms of equity awards, with expenses recognized on a straight-line basis over the requisite service period[165][166]. - The expected term for stock-based awards is calculated using a simplified method due to insufficient historical experience[167]. - The fair value of common stock for stock-based awards is determined based on the closing price on the Nasdaq Stock Market LLC on the grant date post-IPO[172]. Company Classification - The company is classified as an emerging growth company, allowing it to delay adopting new accounting standards until certain conditions are met[176][177]. - The company has entered into contracts with research organizations and vendors that are generally cancelable and do not contain minimum purchase commitments[162].