What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-08 · 106 added, 54 removed, 209 unchanged (43% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial conditions and results of operations should be read together with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and our audited financial statements and notes thereto as of and for the years ended December 31, 2025 and 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report filed with the Securities and Exchange Commission (“SEC”), on March 26, 2026.

The following discussion and analysis of our financial conditions and results of operations should be read together with our financial statements and related notes appearing elsewhere in this Quarterly Report and our audited financial statements and notes thereto as of and for the years ended December 31, 2025 and 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report filed with the Securities and Exchange Commission (“SEC”), on March 26, 2026.

In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements.

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FDA concurred with the proposed study design, which would randomize participants to 100 mg of oral zervimesine or placebo daily for at least six months.

Primary outcomes would include a composite cognitive endpoint such as the integrated Alzheimer's Disease Rating Scale (iADRS) as well as a functional endpoint such as ADCS-ADL.

Primary outcomes would include a composite cognitive endpoint such as the integrated Alzheimer's Disease Rating Scale (iADRS).

The Phase 3 study population would be enriched with AD patients who have lower plasma p-tau217 at screening.

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SHIMMER was funded by a grant of approximately $29.5 million awarded by the NIA.

Zervimesine treatment resulted in an 86% slowing of decline on NPI-12 vs placebo in the SHIMMER study.

Zervimesine treatment resulted in an 86% slowing of decline on NPI-12 vs placebo in the

SHIMMER study.

This tool describes the frequency and severity of 12 behavioral symptoms including hallucinations, delusions and anxiety.

In June 2025, the company initiated an expanded access program (“EAP”) for 32 eligible participants who completed the Phase 2 SHIMMER study as well as additional patients with a diagnosis of mild-to-moderate DLB who met the criteria for this program.

Through this open-label EAP (COG1202), participants are being provided with 100 mg of oral zervimesine to take daily for approximately one year.

Through this open-label EAP (COG1202), participants are being provided with 100 mg of oral zervimesine to take daily for approximately two years.

The first participant was enrolled in June 2025 and the last in December 2025.

In January 2026, the Company conducted a Type C meeting with the FDA, with a focus on identifying clinically meaningful endpoints for future DLB studies.

Based on the FDA’s feedback and the strength of its Phase 2 results, the company plans to develop zervimesine for DLB psychosis.

Cognition is planning to meet with the FDA Division of Psychiatry in the second quarter 2026 to discuss a DLB psychosis program and align on study design.

We are now evaluating a few additional patients.

The Company has held meetings with the FDA to align on a framework for a registrational program for zervimesine in DLB psychosis.

In May 2026, the FDA and the company aligned on key aspects of a pivotal study.

The company plans to enroll people with DLB who experience psychosis symptoms of hallucinations and delusions.

This includes people with DLB psychosis who are receiving stable background treatment with off-label antispsychotic medications as well as those who are untreated.

Following screening, participants will be randomized to receive either 100 mg of once-daily oral zervimesine or placebo for nine months.

The Company will work with the FDA on the analytical and statistical details for the primary endpoint for a pivotal trial in DLB psychosis.

The Company is planning additional meetings with the FDA to confirm its registrational program.

Based on proteomic evidence generated from the Company’s clinical programs in Alzheimer’s disease and supported by in vitro findings, the company initiated the Phase 2 COG2201 (MAGNIFY) clinical study of zervimesine for the treatment of geographic atrophy secondary to dry AMD.

Based on favorable results from the AD and DLB programs, and a desire to conserve company resources, the MAGNIFY study was voluntarily concluded in January 2025 after approximately 100 participants were enrolled, approximately half of whom received zervimesine for at least one year.

A manuscript is currently in preparation.

The above Overview covers only the most recently concluded studies in each indication.

The following table highlights findings from these and subsequent studies:

The following table highlights findings from these and subsequent clinical programs:

Study Identifier

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Participants treated with zervimesine experienced slower growth of their GA lesions over the course of the study

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

Since our inception, we have raised approximately $175.2 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 March 31, 2026, we had cash, cash equivalents and restricted cash of $31.2 million.

As of March 31, 2026, we had approximately $25.6 million available from obligated NIA funds for applicable expenses to be incurred in the future.

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 $181.9 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 June 30, 2026, we had cash, cash equivalents, and restricted cash equivalents of $34.8 million.

As of June 30, 2026,

we had approximately $21.6 million available from obligated NIA funds for applicable expenses to be incurred in the future.

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.

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On December 18, 2025, we filed a shelf registration statement with the SEC and a prospectus supplement, which registered the offering, issuance and sale of up to $300.0 million of various equity and debt securities and up to $75.0 million of common stock pursuant to an at-the-market equity offering program with Jefferies LLC (“Jefferies”) (the “2025 ATM”).

For the period ended March 31, 2026, we did not sell any shares of common stock pursuant to the 2025 ATM.

As of March 31, 2026, $75.0 million remain in gross proceeds available for future issuances of common stock under the 2025 ATM.

For the six months ended June 30, 2026, we sold 5,506,610 shares of common stock pursuant to the 2025 ATM for gross proceeds of approximately $6.9 million.

As of June 30, 2026, $68.1 million remain in gross proceeds available for future issuances of common stock under the 2025 ATM.

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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We expense general and administrative costs as incurred.

We expect that our general and administrative expenses will increase for the foreseeable future as we increase our headcount to support our continued research activities and development of our programs.

Other Income (Expense)

Grant income relates to the grants awarded from governmental bodies that are conditional cost reimbursement grants and are recognized as grant income as allowable costs are incurred and the right to payment is realized.

Grant income relates to the grants and donations received from government and other (non-government) parties.

Grants awarded are conditional cost reimbursement grants and are recognized as grant income as allowable costs are incurred and the right to payment is realized.

The grants awarded relate to agreed upon direct and indirect costs for specific studies or clinical trials, which may include personnel and consulting costs, costs paid to CROs, research institutions and /or consortiums involved in the grant, as well as facilities and administrative costs.

These grants are cost plus fixed fee arrangements in which we are reimbursed for eligible direct and indirect costs over time, up to the maximum amount of each specific grant award.

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 March 31, 2026, 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 AD, 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 AD, and an approximately $29.5 million grant from the NIA to fund our Phase 2 (COG1201-SHIMMER) study of zervimesine in patients with dementia with Lewy bodies.

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, 2026, 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 March 31, 2026 and 2025 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 March 31, 2026 and 2025

Comparison of the Three Months Ended June 30, 2026 and 2025

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

Three Months Ended March 31,

Three Months Ended June 30,

Operating Expenses:

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

Three Months Ended March 31,

Three Months Ended June 30,

Clinical programs

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Total research & development expenses

Research and development expenses were $6.1 million for the three months ended March 31, 2026, compared to $10.8 million for the three months ended March 31, 2025.

The decrease of $4.7 million was primarily due to the following:

Research and development expenses were $5.1 million for the three months ended June 30, 2026, compared to $11.5 million for the three months ended June 30, 2025.

The decrease of approximately $6.4 million was primarily due to the following:

● a decrease of $5.3 million in clinical programs primarily related to decreased Phase 2 trial activities with contract research organizations;

● a decrease of $1.4 million in personnel costs related to reduced professional fees and headcount, driven by reduction in laboratory personnel;

● a decrease of $0.6 million in personnel costs related to reduced professional fees and headcount;

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

● an increase of $0.5 million in preclinical programs and other expenses primarily due to an increase in non-clinical activities.

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

General and Administrative Expenses

General and administrative expenses were $2.7 million for the three months ended March 31, 2026, compared to $3.0 million for the three months ended March 31, 2025.

The change in general and administrative expenses was driven primarily by a decrease in stock compensation, compensation, professional fees and office expenses.

General and administrative expenses were $2.6 million for the three months ended June 30, 2026, compared to $2.5 million for the three months ended June 30, 2025.

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

Other Income (Expense)

Grant income was $4.0 million for the three months ended March 31, 2026, compared to $5.1 million for the three months ended March 31, 2025.

Grant income was $3.5 million for the three months ended June 30, 2026, compared to $7.1 million for the three months ended June 30, 2025.

The change in grant income is correlated with the decrease in eligible reimbursable costs related to clinical trials incurred during 2026 as compared to 2025.

O ther Income, Ne t

Other income, net was $0.3 million for the three months ended June 30, 2026, compared to other income, net of $0.1 million for the three months ended June 30, 2025.

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, 2026, compared to interest expense of less than $0.1 million for the three months ended June 30, 2025.

Interest expense was not significant in either period.

Comparison of the Six Months Ended June 30, 2026 and 2025

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

Six Months Ended June 30,

Operating Expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Other income, net

Other income, net was $0.3 million for the three months ended March 31, 2026, compared to other income, net of $0.2 million for the three months ended March 31, 2025.

Interest expense

Total other income, net

Loss before income tax

Income tax expense

Research and Development Expenses

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

Six Months Ended June 30,

Clinical programs

Manufacturing

Preclinical programs

Other expense

Total research & development expenses

Research and development expenses were $11.2 million for the six months ended June 30, 2026, compared to $22.3 million for the six months ended June 30, 2025.

The decrease of $11.1 million was primarily due to the following:

● a decrease of $8.8 million in clinical programs primarily related to decreased Phase 2 trial activities with contract research organizations;

● a decrease of $2.0 million in personnel costs related to reduced professional fees and headcount;

● a decrease of $0.7 million in manufacturing and other expense, primarily due to lower costs with contract manufacturing organizations for the replenishment of clinical trial supply;

● an increase of $0.4 million in preclinical activity to support registrational programs

General and Administrative Expenses

General and administrative expenses were $5.3 million for the six months ended June 30, 2026, compared to $5.5 million for the six months ended June 30, 2025.

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

Other Income (Expense)

Grant income was $7.5 million for the six months ended June 30, 2026, compared to $12.2 million for the six months ended June 30, 2025.

The change in grant income is correlated with the decrease in eligible reimbursable costs related to clinical trials incurred during 2026 as compared to 2025.

O ther Income, Ne t

Other income, net was $0.6 million for the six months ended June 30, 2026, compared to other income, net of $0.4 million for the six months ended June 30, 2025.

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 March 31, 2026, compared to interest expense of less than $0.1 million for the three months ended March 31, 2025.

Interest expense was less than $0.1 million for the six months ended June 30, 2026, compared to interest expense of less than $0.1 million for the six months ended June 30, 2025.

Interest expense was not significant in either period.

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Sources of Liquidity

To date, we have funded our operations primarily with proceeds from grants awarded by the NIA and proceeds from the sales of our convertible promissory notes, convertible preferred stock, SAFE, stock option exercises, IPO, follow-on equity offerings, and sales under our ATM programs.

To date, we have funded our operations primarily with proceeds from grants awarded by the NIA, and proceeds from the sales of our convertible promissory notes, convertible preferred stock, SAFE, stock option exercises, follow-on equity offerings, sales under our ATM and equity line financing, and our IPO.

Since our inception, we have been awarded grant awards primarily from the NIA in the aggregate amount of approximately $171.0 million and have raised approximately $181.9 million in net proceeds from sales of our equity securities, convertible notes and SAFE, stock option exercises, our IPO and our follow-on public offerings.

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As of December 18, 2025, immediately prior to termination of the 2022 ATM, we sold 36,396,325 shares of common stock under the 2022 ATM for gross proceeds of approximately $27.5 million.

In addition, in March 2023, we entered 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.

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.

The Lincoln Park Purchase Agreement’s term expired on March 10, 2026.

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On December 18, 2025, we entered into a Sales Agreement with Jefferies, providing for the offering, issuance and sale by us of up to $75.0 million of our common stock from time to time in ATM offerings.

As of March 31, 2026, we have not sold any shares of common stock under the 2025 ATM.

As of March 31, 2026, we had $31.2 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 public offerings will be sufficient for us to fund our operating expenses and capital expenditures requirements through the second quarter of 2027, which assumes no usage from the 2025 ATM.

As of June 30, 2026, we have sold 5,506,610 shares of common stock under the 2025 ATM for gross proceeds of approximately $6.9 million.

As of June 30, 2026, we had $34.8 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 public offerings will be sufficient for us to fund our operating expenses and capital expenditures requirements into the fourth quarter of 2027, which assumes no usage from the 2025 ATM.

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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To the extent available, we expect to continue our pursuit of non-dilutive research contributions, or grants, including additional NIA grant funding.

However, we may fail to receive additional NIA grants, or we may be unable to raise additional funds or enter into such other agreements or arrangements when needed on acceptable terms, or at all.

However, we may fail to receive additional NIA grants, or we may be unable to raise additional funds or enter into such other

agreements or arrangements when needed on acceptable terms, or at all.

Our failure to obtain additional NIA grants or raise capital or enter into such agreements as and when needed could have a material adverse effect on our business, results of operations and financial condition.

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

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows used in operating activities

Cash flows used in investing activities

Cash flows provided (used) by financing activities

Cash flows provided by financing activities

Net decrease in cash, cash equivalents, and restricted cash equivalents

Cash used in operating activities

Net cash used in operating activities for the three months ended March 31, 2026 and 2025 was $5.5 million and $9.9 million, respectively.

The change in cash used in operating activities of $4.4 million was driven by a decrease in net loss.

Net cash used in operating activities for the six months ended June 30, 2026 and 2025 was $8.6 million and $15.5 million, respectively.

The change in cash used in operating activities of $6.9 million was driven by a decrease in net loss of $6.7 million, combined with an increase of $0.8 million in operating assets and liabilities and a decrease in non-cash adjustments of $0.6 million.

The increase in net operating assets and liabilities of $0.8 million was primarily related to an increase in grant receivables of $10.6 million, which was partially offset by a decrease in accounts payable and accrued expenses of $9.1 million and a decrease in deferred income and other liabilities of $0.5 million.

The decrease in non-cash adjustments of $0.6 million was primarily related to a decrease in equity-based compensation of $0.6 million.

Cash used in investing activities

During the three months ended March 31, 2026 and 2025, no cash was used in or provided by investing activities.

Cash provided (used) by financing activities

Net cash provided (used) by financing activities was $0.2 million and $1.3 million for the three months ended March 31, 2026 and 2025, respectively.

The change in net cash by financing activities is primarily related to no ATM activity during 2026 compared to net proceeds from the issuance of common stock under the ATM program in 2025.

Net cash used in investing activities for the six months ended June 30, 2026 and 2025 was less than $0.1 million.

Cash provided by financing activities

Net cash provided by financing activities was $6.4 million and $2.0 million for the six months ended June 30, 2026 and 2025, respectively.

The change in net cash by financing activities is primarily related to increased proceeds from the issuance of common stock under the 2025 ATM program during the six months ended June 30, 2026.

Contractual Obligations

The following table summarizes our contractual obligations as of March 31, 2026 (in thousands):

The following table summarizes our contractual obligations as of June 30, 2026 (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 March 31, 2026, there was no outstanding balance on the loan.

As of June 30, 2026, 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.

As of March 31, 2026, the outstanding principal amount of the loan was $0.2 million.

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

As of June 30, 2026, the outstanding principal amount of the loan was $0.1 million.

We have entered into an operating lease for office space under agreements that run through March 31, 2031.

The amounts reflected in the table above consist of the future minimum lease payments under the non-cancelable lease arrangements.

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On January 27, 2026, we modified our existing lease agreement with the landlord to reduce our lab space from 3,706 square feet to 1,577 square feet with no change to the lease term.

On June 30, 2026, the lease term expired.

On July 1, 2021, we entered into an agreement to lease 2,864 square feet of office space in Purchase, New York.

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We provided a security deposit in the form of a Letter of Credit in the amount of less than $0.1 million pursuant to the terms of the lease.

On April 6, 2026, we modified our existing lease agreement with the landlord to increase our office space from 2,864 square feet to 4,200 square feet at the same location, and to extend the lease termination date for an additional 2 years.

We enter into contracts in the normal course of business with CROs and other vendors to assist in the performance of our research and development and other services and products for operating purposes.

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Recent Accounting Pronouncements

For a description of recent accounting pronouncements, see Note 2 of the notes to our consolidated financial statements included in this Quarterly Report.

For a description of recent accounting pronouncements, see Note 2 of the notes to our financial statements included in this Quarterly Report.

Emerging Growth Company Status

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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