Financial Performance - As of June 30, 2022, the company had an accumulated deficit of $103.6 million and incurred a net loss of $5.8 million for the three months ended June 30, 2022[76]. - The net loss for the three months ended June 30, 2022, was $5.8 million, compared to a net loss of $1.5 million in the same period of 2021, indicating an increase in loss of 253.7%[89]. - Research and development expenses increased to $9.1 million for the three months ended June 30, 2022, up from $4.9 million in the same period of 2021, representing an increase of 85.7%[88]. - General and administrative expenses rose to $3.1 million for the three months ended June 30, 2022, compared to $1.1 million for the same period in 2021, marking an increase of 181.8%[91]. - Total operating expenses for the three months ended June 30, 2022, were $12.2 million, up from $6.0 million in the same period of 2021, reflecting a 103.9% increase[89]. - Research and development expenses for the six months ended June 30, 2022, totaled $15.6 million, up from $9.3 million for the same period in 2021, a 67.6% increase[97]. - General and administrative expenses for the six months ended June 30, 2022, were $6.0 million, compared to $2.2 million for the same period in 2021, an increase of 172.7%[100]. - Grant income for the three months ended June 30, 2022, was $6.4 million, compared to $4.6 million for the same period in 2021, an increase of 38.8%[92]. - Grant income for the six months ended June 30, 2022, was $12.3 million, compared to $9.3 million for the same period in 2021, reflecting a 32.2% increase[101]. 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[76]. - The company has been awarded grants that extend through May 31, 2025, with specific funding amounts including approximately $81.0 million for a Phase 2 study of CT1812 in early-stage Alzheimer's disease[86]. - The company anticipates needing to raise additional funding in the future to support ongoing and future product development, including commercialization efforts[108]. - The company may face challenges in obtaining additional NIA grants or raising capital, which could adversely affect its business[110]. Cash and Liquidity - The company had cash and cash equivalents of $45.8 million as of June 30, 2022[76]. - As of June 30, 2022, the company had $45.8 million in cash and cash equivalents and has not generated positive cash flows from operations[107]. - Net cash used in operating activities for the six months ended June 30, 2022 was $8.3 million, primarily due to a net loss of $9.6 million[113]. - Net cash used in investing activities for the six months ended June 30, 2022 was $0.1 million related to fixed asset purchases[114]. Operational Challenges - The ongoing COVID-19 pandemic has adversely affected patient enrollment in clinical trials, potentially impacting the company's operations[79]. - The company expects to incur significant and increasing expenses and net losses for the foreseeable future as it advances product candidates through clinical development[78]. - The company anticipates substantial increases in general and administrative expenses due to operating as a public company[85]. Corporate Structure and Compliance - The company completed its IPO on October 13, 2021, issuing 3,768,116 shares at a public offering price of $12.00 per share, resulting in net proceeds of approximately $44.2 million[78]. - The company is classified as an emerging growth company under the JOBS Act, allowing it to delay adopting new accounting standards until certain conditions are met[124]. - The company will remain an emerging growth company until it achieves at least $1.07 billion in annual revenue or the market value of its common stock exceeds $700 million[124]. - There were no changes in internal control over financial reporting during the quarter ended June 30, 2022, that materially affected the internal control[127]. - The management evaluated the effectiveness of disclosure controls and procedures and concluded they were effective as of the end of the reporting period[126]. - The company does not expect its disclosure controls to prevent all errors and fraud due to inherent limitations in control systems[126]. Other Financial Information - Interest expense, net decreased to less than $0.1 million for the three months ended June 30, 2022, down from $0.4 million in the same period of 2021, a reduction of 75%[94]. - The company maintained a full valuation allowance against all deferred tax assets as of June 30, 2022, indicating no expectation of realizing future tax benefits[88]. - The total unrecognized compensation expense related to unvested time-based vesting awards was $9.0 million as of June 30, 2022, expected to be recognized over approximately 2.5 years[123]. - The company has entered into an operating lease for office and laboratory facilities with future minimum lease payments totaling $703,000[116].
Cognition Therapeutics(CGTX) - 2022 Q2 - Quarterly Report