What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-07 · 70 added, 62 removed, 286 unchanged (32% of the section changed)

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Currently available therapies for these diseases are limited, with few Alzheimer’s disease treatments, two approved treatments for geographic atrophy (“GA”) secondary to dry age-related macular degeneration (“dAMD”) and no approved treatments for dementia with Lewy bodies (“DLB”).

Our goal is to develop disease-modifying treatments for people with these degenerative disorders by initially leveraging our expertise in the σ-2 (sigma-2) receptor (“S2R”), which is expressed by multiple cell types, including neuronal synapses, and acts as a key regulator of cellular damage commonly associated with certain age-related degenerative diseases of the CNS and retina.

Our goal is to develop disease-modifying treatments for people with these degenerative disorders by initially leveraging our expertise in the σ-2 (sigma-2) receptor (“S2R”), which is expressed by multiple cell types, including at neuronal synapses, and acts as a key regulator of cellular damage commonly associated with certain age-related degenerative diseases of the CNS and retina.

Our lead candidate for the treatment of age-related degenerative diseases is zervimesine (CT1812).

Data indicates that zervimesine antagonizes the binding and toxicity of amyloid beta oligomers via targeting the S2R complex and represents a mechanism that is functionally distinct from other current approaches in clinical development for the treatment of degenerative diseases.

Data indicate that zervimesine antagonizes the binding and toxicity of amyloid beta oligomers via targeting the S2R complex and represents a mechanism that is functionally distinct from other current approaches in clinical development for the treatment of degenerative diseases.

Clinical results support this hypothesis, and our clinical trial findings provide evidence that the displacement of oligomers from synapses via zervimesine engagement with the S2R results in improved synapse function.

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Food and Drug Administration (“FDA”).

Formal minutes are expected to be provided to the Company approximately 30 days following this meeting.

Formal minutes were provided by the FDA in August 2025 confirming our Phase 3 clinical program plan.

SHINE was a randomized, double-blind, placebo-controlled trial that enrolled 153 adults with mild-to-moderate Alzheimer’s disease.

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In the overall modified intent-to-treat population in SHINE, participants treated with once-daily oral zervimesine experienced less cognitive decline than those treated with placebo.

As measured with ADAS-Cog 11, zervimesine-treated participants (pooled 100 mg and 300 mg) experienced a mean 38% slowing of decline at six months from baseline compared to placebo-treated participants, but this difference did not achieve statistical significance.

This difference did not achieve statistical significance.

These results are comparable in magnitude to what was achieved with currently approved monoclonal antibody treatments, with the convenience of once-daily oral administration.

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The average age of participants was approximately 75 years.

Among the 238 participants treated with zervimesine, there were 23 incidents of transient treatment-emergent liver enzyme test (“LFT”) increases greater than 3xULN (9.6%) during the treatment period.

Of these incidents, ten occurred in the SHINE study, nine in the SHIMMER study and four in the MAGNIFY study.

these participants, the elevated liver enzymes subsided after cessation of drug with no evidence of permanent liver injury.

Among the 238 participants treated with zervimesine, there were 23 incidents of transient treatment-emergent elevations in the liver function test (“LFT”) that were greater than 3xULN (9.6%) during the treatment period.

Of these incidents, ten occurred in the SHINE study, nine in the SHIMMER study and four in the

MAGNIFY study.

In these participants, the elevated liver enzymes subsided after cessation of drug with no evidence of permanent liver injury.

Overall, adverse events (AEs) were well balanced between treatment and placebo arms;

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To date, we have funded our operations primarily with proceeds from grants awarded by the National Institute of Aging (the “NIA”), a division of the National Institutes of Health (the “NIH”), and proceeds from our initial public offering (the “IPO”), completed in October 2021, proceeds from our follow-on public offerings, sales of our common stock through our ATM (as defined below), sales of our convertible promissory notes, convertible preferred stock, simple agreements for future equity (“SAFE”) and stock option exercises.

Since our inception, we have received approximately $140.4 million in net proceeds from sales of our equity securities, convertible notes, SAFE, stock option exercises, IPO follow-on public offerings, ATM, and equity line financing with Lincoln Park.

As of June 30, 2025, we had cash, cash equivalents, and restricted cash equivalents of $11.6 million.

As of June 30, 2025, we had approximately $41.9 million available from obligated NIA funds for applicable expenses to be incurred in the future.

Since our inception, we have received approximately $176.7 million in net proceeds from sales of our equity securities, convertible notes, SAFE, stock option exercises, IPO follow-on public offerings, registered direct offering in August 2025, at-the-market offerings, and equity line financing with Lincoln Park.

As of September 30, 2025, we had cash, cash equivalents, and restricted cash equivalents of $39.8 million.

As of September 30, 2025, we had approximately $36.3 million available from obligated NIA funds for applicable expenses to be incurred in the future.

On December 23, 2022, we entered into a sales agreement with Cantor Fitzgerald & Co.

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(the “Sales Agents”), providing for the offering, issuance and sale by us of up to $40.0 million of our common stock from time to time in “at-the-market” offerings (the “ATM”).

For the six months ended June 30, 2025, we sold 4,926,473 shares of common stock pursuant to the ATM for gross proceeds of approximately $2.4 million.

As of June 30, 2025, we have approximately $19.5 million remaining in gross proceeds available for future issuances of common stock under the ATM, subject to the limitations of General Instruction I.B.6 of Form S-3.

For the nine months ended September 30, 2025, we sold 13,159,619 shares of common stock pursuant to the ATM for gross proceeds of approximately $8.6 million.

As of September 30, 2025, we have approximately $13.3 million remaining in gross proceeds available for future issuances of common stock under the ATM.

On March 10, 2023, we entered into a purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) for an equity line financing (the “Lincoln Park Purchase Agreement”).

The Lincoln Park Purchase Agreement provides

that, subject to the terms and conditions set forth therein, we have the right, but not the obligation, to direct Lincoln Park to purchase up to $35.0 million of shares of common stock at our sole discretion, over a 36-month period commencing on March 10, 2023.

The Lincoln Park Purchase Agreement provides that, subject to the terms and conditions set forth therein, we have the right, but not the obligation, to direct Lincoln Park to purchase up to $35.0 million of shares of common stock at our sole discretion, over a 36-month period commencing on March 10, 2023.

We filed a prospectus supplement to our registration statement on Form S-3 (File No.

covering the resale of shares of common stock that are issued under the Lincoln Park Purchase Agreement.

During the six months ended June 30, 2025, we did not sell any shares of common stock to Lincoln Park.

As of June 30, 2025, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

During the nine months ended September 30, 2025, we did not sell any shares of common stock to Lincoln Park.

As of September 30, 2025, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

On March 14, 2024, we completed our follow-on public offering, pursuant to which we issued and sold 6,571,428 shares of our common stock at a public offering price of $1.75 per share.

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In connection with the follow-on public offering, we received net proceeds of approximately $11.9 million, after deducting underwriting discounts and commissions and other offering related expenses.

On August 29, 2025, we completed our registered direct offering, pursuant to which we issued and sold 14,700,000 shares of our common stock at an offering price of $2.05 per share.

We received net proceeds of approximately $27.9 million, after deducting underwriting discounts, commissions, placement agent fees, and other offering related expenses payable by us.

In connection with the registered direct offering, we agreed to pay the placement agent an aggregate cash fee of 7.0% of the gross proceeds raised from the sale and issuance of the shares of common stock minus certain expenses.

We agreed to issue warrants to the placement agent to purchase up to 514,500 shares of common stock which have an exercisable price equal to $2.78 and will be exercisable commencing six months from the close of the registered direct offering with a term of five (5) years from the date of the Placement Agency Agreement.

We expect to continue to incur significant and increasing expenses and net losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

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Only costs that are allowable under the grant award, certain government regulations and the NIH’s supplemental policy and procedure manual may be claimed for reimbursement, and the reimbursements are subject to routine audits from governmental agencies from time to time.

As of June 30, 2025, the Company has been awarded grants with project periods that extend through May 31, 2027, subject to extension.

Our clinical trials have been funded

by approximately $171.0 million in cumulative grants awarded primarily by the NIA, which includes an approximately $81.0 million grant from the NIA to fund our Phase 2 (COG0203-START) study of zervimesine in patients with early-stage Alzheimer’s disease, an approximately $30.5 million grant from the NIA to fund our Phase 2 (COG0201-SHINE) study of zervimesine in patients with mild-to-moderate Alzheimer’s disease, and an approximately $29.5 million grant from the NIA to fund our Phase 2 (COG1201-SHIMMER) study of zervimesine in patients with DLB.

As of September 30, 2025, the Company has been awarded grants with project periods that extend through May 31, 2027, subject to extension.

Our clinical trials have been

funded by approximately $171.0 million in cumulative grants awarded primarily by the NIA, which includes an approximately $81.0 million grant from the NIA to fund our Phase 2 (COG0203-START) study of zervimesine in patients with early-stage Alzheimer’s disease, an approximately $30.5 million grant from the NIA to fund our Phase 2 (COG0201-SHINE) study of zervimesine in patients with mild-to-moderate Alzheimer’s disease, and an approximately $29.5 million grant from the NIA to fund our Phase 2 (COG1201-SHIMMER) study of zervimesine in patients with DLB.

Other Income, Net

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Interest Expense

Interest expense for the three months ended June 30, 2025 and 2024 consisted of interest expense related to the insurance premium financing arrangement with a lender.

Interest expense primarily consists of interest expense related to the insurance premium financing arrangement with a lender.

Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

Comparison of the Three Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Operating Expenses:

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The following table summarizes our research and development expenses (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Clinical programs

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Other expense

Research and development expenses were $11.5 million for the three months ended June 30, 2025, compared to $11.6 million for the three months ended June 30, 2024.

The decrease of $0.1 million was primarily due to the following:

● an increase of $0.2 million in clinical programs primarily related to continued Phase 2 trial activities with contract research organizations;

● a decrease of $0.4 million in personnel costs related to reduced professional fees, partially offset by increased employee compensation and benefits costs;

Research and development expenses were $3.8 million for the three months ended September 30, 2025, compared to $11.4 million for the three months ended September 30, 2024.

The decrease of approximately $7.6 million was primarily due to the following:

● a decrease of $6.5 million in clinical programs primarily related to decreased Phase 2 trial activities with contract research organizations;

● a decrease of $1.0 million in personnel costs related to reduced professional fees and headcount;

● a decrease of $0.3 million in preclinical programs and other expense, primarily due to decreased research activities ;

● an increase of $0.2 million in manufacturing related to higher costs with contract manufacturing organizations for the replenishment of clinical trial supply .

● a decrease of less than $0.1 million in preclinical programs and other expense, primarily due to decreased research activities.

General and Administrative Expenses

General and administrative expenses were $2.5 million for the three months ended June 30, 2025, compared to $3.1 million for the three months ended June 30, 2024.

The change in general and administrative expenses was driven primarily by a decrease in equity-based compensation, which was partially offset by an increase in employee compensation and benefits costs.

General and administrative expenses were $2.6 million for the three months ended September 30, 2025, compared to $3.1 million for the three months ended September 30, 2024.

The change in general and administrative expenses was driven primarily by a decrease in equity-based compensation, which was partially offset by an increase in professional fees.

Other Income (Expense)

Grant income was $7.0 million for the three months ended June 30, 2025, compared to $7.3 million for the three months ended June 30, 2024.

Grant income was $1.2 million for the three months ended September 30, 2025, compared to $4.3 million for the three months ended September 30, 2024.

The change in grant income is correlated with the decrease in eligible reimbursable costs related to clinical trials incurred during 2025 as compared to 2024, offset partially by grant income recognized from the donation received.

O ther Income, Ne t

Other income, net was $0.1 million for the three months ended June 30, 2025, compared to other income, net of $0.3 million for the three months ended June 30, 2024.

Other income, net was $0.2 million for the three months ended September 30, 2025, compared to other income, net of $0.2 million for the three months ended September 30, 2024.

The change in other income, net was insignificant period over period.

Interest Expense

Interest expense was less than $0.1 million for the three months ended June 30, 2025, compared to interest expense of less than $0.1 million for the three months ended June 30, 2024.

Interest expense was less than $0.1 million for the three months ended September 30, 2025, compared to interest expense of less than $0.1 million for the three months ended September 30, 2024.

Interest expense was not significant in either period.

Comparison of the Six Months Ended June 30, 2025 and 2024

Comparison of the Nine Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Operating Expenses:

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The following table summarizes our research and development expenses (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Clinical programs

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Total research & development expenses

Research and development expenses were $22.3 million for the six months ended June 30, 2025, compared to $22.1 million for the six months ended June 30, 2024.

The increase of $0.1 million was primarily due to the following:

● an increase of $0.7 million in clinical programs primarily related to increased Phase 2 trial activities with contract research organizations;

● a decrease of $0.1 million in personnel costs related to reduced professional fees, partially offset by an increase in year over year employee compensation and benefits and equity-based compensation;

● a decrease of $0.3 million in manufacturing related to lower costs with contract manufacturing organizations for the replenishment of clinical trial supply ;

● a decrease of $0.2 million in preclinical programs and other expense, primarily due to decreased research activities.

Research and development expenses were $26.0 million for the nine months ended September 30, 2025, compared to $33.5 million for the nine months ended September 30, 2024.

The decrease of $7.5 million was primarily due to the following:

● a decrease of $5.8 million in clinical programs primarily related to decreased Phase 2 trial activities with contract research organizations;

● a decrease of $1.2 million in personnel costs related to reduced professional fees and headcount;

● a decrease of $0.5 million in manufacturing, preclinical programs and other expense, primarily due to decreased research activities.

General and Administrative Expenses

General and administrative expenses were $5.5 million for the six months ended June 30, 2025, compared to $6.7 million for the six months ended June 30, 2024.

General and administrative expenses were $8.1 million for the nine months ended September 30, 2025, compared to $9.7 million for the nine months ended September 30, 2024.

The change in general and administrative expenses was driven primarily by a decrease in equity-based compensation, which was partially offset by an increase in professional fees.

Other Income (Expense)

Grant income was $12.1 million for the six months ended June 30, 2025, compared to $12.2 million for the six months ended June 30, 2024.

Grant income was $13.4 million for the nine months ended September 30, 2025, compared to $16.5 million for the nine months ended September 30, 2024.

O ther Income, Ne t

Other income, net was $0.4 million for the six months ended June 30, 2025, compared to other income, net of $0.6 million for the six months ended June 30, 2024.

Other income, net was $0.6 million for the nine months ended September 30, 2025, compared to other income, net of $0.8 million for the nine months ended September 30, 2024.

The change in other income, net was insignificant period over period.

Interest Expense

Interest expense was less than $0.1 million for the six months ended June 30, 2025, compared to interest expense of less than $0.1 million for the six months ended June 30, 2024.

Interest expense was less than $0.1 million for the nine months ended September 30, 2025, compared to interest expense of less than $0.1 million for the nine months ended September 30, 2024.

Interest expense was not significant in either period.

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On December 23, 2022, we entered into a sales agreement with the Sales Agents, providing for the offering, issuance and sale by us of up to $40.0 million of our common stock from time to time in ATM offerings.

As of June 30, 2025, we sold 27,698,736 shares of common stock under the ATM for gross proceeds of approximately $20.5 million.

As of June 30, 2025, there was $19.5 million of common stock remaining available for sale under the ATM, subject to the limitations of General Instruction I.B.6 of Form S-3.

As of September 30, 2025, we sold 35,931,882 shares of common stock under the ATM for gross proceeds of approximately $26.7 million.

As of September 30, 2025, there was $13.3 million of common stock remaining available for sale under the ATM.

In addition, in March 2023, we entered into the Lincoln Park Purchase Agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”), giving the Company the right, but not the obligation to sell to Lincoln Park up to $35.0 million worth of shares of our common stock.

As of June 30, 2025, we have sold 125,000 shares of common stock to Lincoln Park for proceeds of $0.2 million, as part of the equity line financing arrangement.

As of June 30, 2025, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

As of September 30, 2025, we have sold 125,000 shares of common stock to Lincoln Park for proceeds of $0.2 million, as part of the equity line financing arrangement.

As of September 30, 2025, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

On March 14, 2024, we closed a follow-on public offering of 6,571,428 shares of our common stock at a public offering price of $1.75 per share.

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The net proceeds were approximately $11.9 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us.

As of June 30, 2025, we had $11.6 million in cash, cash equivalents, and restricted cash equivalents and have not generated positive cash flows from operations.

Based on our current business plans, we believe that our existing cash and cash equivalents, income from non-dilutive grants and donations, and net proceeds from our March 2024 follow-on public offering will be sufficient for us to fund our operating expenses and capital expenditures requirements into the second quarter of 2026, which assumes no usage from the remaining ATM nor the Lincoln Park Purchase Agreement.

On August 29, 2025, we completed the registered direct offering of 14,700,000 shares of our common stock at an offering price of $2.05 per share.

As part of the registered direct offering, we agreed to issue warrants to the placement agent to purchase up to 514,500 shares of common stock which have an exercise price equal to $2.78.

The net proceeds were approximately $27.9 million, after deducting underwriting discounts, commissions, placement agent fees, and other offering related expenses payable by us.

As of September 30, 2025, we had $39.8 million in cash, cash equivalents, and restricted cash equivalents and have not generated positive cash flows from operations.

Based on our current business plans, we believe that our existing cash and cash equivalents, income from non-dilutive grants and donations, and net proceeds from our March 2024 follow-on public offering and August 2025 registered direct offering will be sufficient for us to fund our operating expenses and capital expenditures requirements into the second quarter of 2027, which assumes no usage from the remaining ATM nor the Lincoln Park Purchase Agreement.

We have based these estimates on assumptions that may prove to be incorrect or require adjustment as a result of business decisions, and we could utilize our available capital resources sooner than we currently expect.

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Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to

us and/or may reduce the value of our common stock.

Adequate funding may not be available when needed or on terms acceptable to us, or at all.

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The following table summarizes our cash flows for the periods indicated (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows used in operating activities

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Cash flows provided by financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash, cash equivalents, and restricted cash equivalents

Cash used in operating activities

Net cash used in operating activities for the six months ended June 30, 2025 and 2024 was $15.5 million and $13.2 million, respectively.

Net cash used in operating activities for the nine months ended September 30, 2025 and 2024 was $21.2 million and $20.1 million, respectively.

The change in cash used in operating activities of $1.1 million was driven by a decrease in net loss of $6.0 million, combined with a decrease of $5.4 million in operating assets and liabilities primarily related to an increase in grant receivables of $2.9 million, and a decrease in non-cash adjustments of $1.8 million primarily related to a decrease in equity-based compensation of $1.5 million.

Cash used in investing activities

Net cash used in investing activities for the six months ended June 30, 2025 and 2024 was zero and less than $0.1 million, respectively.

Net cash used in investing activities for the nine months ended September 30, 2025 and 2024 was zero and less than $0.1 million, respectively.

Cash provided by financing activities

Net cash provided by financing activities was $2.0 million and $11.9 million for the six months ended June 30, 2025 and 2024, respectively.

The change in net cash provided by financing activities is primarily related to net proceeds from the issuance of common stock in our follow-on offering in March 2024 and under the ATM program.

Net cash provided by financing activities was $36.0 million and $12.2 million for the nine months ended September 30, 2025 and 2024, respectively.

The change in net cash provided by financing activities is primarily related to net proceeds from the issuance of common stock in the registered direct offering in August 2025 of $27.9 million and net proceeds from the issuance of common stock under the ATM program of $8.3 million, as compared to the net proceeds of $11.9 million in our follow-on offering in March 2024 and net proceeds of $0.9 million under the ATM program.

Contractual Obligations

The following table summarizes our contractual obligations as of June 30, 2025 (in thousands):

The following table summarizes our contractual obligations as of September 30, 2025 (in thousands):

Operating lease obligations

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Payments of less than $0.1 million are due monthly from November 2024 through July 2025.

As of June 30, 2025, the outstanding principal of the loan was less than $0.1 million.

As of September 30, 2025, there was no outstanding balance on the loan.

In October 2025, we entered into an insurance premium financing arrangement whereby we financed $0.4 million of certain premiums at a 7.95% annual interest rate.

Payments of less than $0.1 million are due monthly from November 2025 through August 2026.

We have entered into an operating leases for office and laboratory facilities under agreements that run through May 31, 2029.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis