What changed in this filing

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Item 1. Financial Statements

2024-05-07 compared with 2023-11-02 · 97 added, 110 removed, 323 unchanged (39% of the section changed)

4 unchanged sentences

(in thousands, except share and per share amounts)

September 30, 2023

March 31, 2024

December 31, 2023

15 unchanged sentences

Operating lease liabilities, noncurrent

Deferred grant income and other liabilities, noncurrent

Total liabilities

2 unchanged sentences

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized;

no shares issued and outstanding at September 30, 2023 and December 31, 2022

no shares issued and outstanding at March 31, 2024 and December 31, 2023

Common stock, $ 0.001 par value, 250,000,000 shares authorized;

30,417,082 and 28,991,548 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

39,985,866 and 32,165,478 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

8 unchanged sentences

(in thousands, except share and per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Operating Expenses:

6 unchanged sentences

Interest expense

Loss on currency translation from liquidation of subsidiary

Total other income, net

Unrealized gain (loss) on foreign currency translation

Foreign currency translation adjustment, including reclassifications

Total comprehensive loss

9 unchanged sentences

Balances as of December 31, 2023

Issuance of common stock in follow-on public offering, net of discounts and issuance costs of $ 1,329

Issuance of common stock under the at-the-market (ATM) sales agreement, net of commissions and allocated fees

Issuance of common stock as commitment shares for equity line financing (Note 7)

Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes

Equity-based compensation

Other comprehensive gain

Reclassification adjustment of foreign currency translation included in net loss for liquidation of subsidiary

Balances as of March 31, 2024

Issuance of common stock under the at-the-market (ATM) sales agreement, net of commissions and allocated fees

Equity-based compensation

Other comprehensive loss

Balances as of June 30, 2023

Issuance of common stock under the at-the-market (ATM) sales agreement, net of commissions and allocated fees

Issuance of common stock related to the equity line financing

Equity-based compensation

Balances as of September 30, 2023

COGNITION THERAPEUTICS, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(in thousands, except share amounts)

Comprehensive

1 unchanged sentence

Balances as of December 31, 2022

Exercise of stock options

Issuance of common stock under the at-the-market (ATM) sales agreement, net of commissions and allocated fees

Issuance of common stock as commitment shares for equity line financing (see Note 7)

Equity-based compensation

1 unchanged sentence

Balances as of March 31, 2023

Exercise of stock options

Equity-based compensation

Other comprehensive loss

Balances as of June 30, 2022

Exercise of stock options

Equity-based compensation

Other comprehensive loss

Balances as of September 30, 2022

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

3 unchanged sentences

Amortization of right-of-use assets

Loss on currency translation from liquidation of subsidiary

Issuance of common stock as commitment shares for equity line financing

Loss on sale of common stock related to the equity line financing

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid expenses and other assets

Other receivables

Accounts payable and accrued expenses

6 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of common stock in follow-on public offering, net

Proceeds from issuance of common stock under the ATM sales agreement, net of commissions and allocated fees

Proceeds from sale of common stock related to the equity line financing

Proceeds from the exercise of common stock options

Payment of employee withholding taxes on vested restricted stock units

Payments on loan payable

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents

1 unchanged sentence

Cash and cash equivalents – end of period

Supplemental disclosures of non-cash financing activities:

Remeasurement of right-of-use asset and operating lease liability

The accompanying notes are an integral part of these consolidated financial statements.

9 unchanged sentences

The Company was founded on the unique combination of biological expertise around these targets, including proprietary assays that emphasize functional responses, and proprietary medicinal chemistry intended to produce novel, high-quality small-molecule drug candidates.

On July 14, 2015, the Company formed Cognition Therapeutics PTY LTD, as its wholly owned subsidiary (the “Subsidiary”), primarily for the purpose of conducting research and development efforts at facilities located in Australia.

Assets and liabilities of the Subsidiary, which uses the Australian dollar as its local functional currency, are translated to United States (U.S.) dollars at year-end exchange rates.

Income statement accounts are translated using the average exchange rates prevailing during the month in which income and expenses are generated.

Translation adjustments are recorded to accumulated other comprehensive income (loss) (“AOCI”) within stockholders’ equity.

Gains and losses from foreign currency transactions are included in net loss as a part of other income, net.

On November 15, 2022, the Company closed a follow-on public offering of 5,000,000 shares of the Company’s common stock at a public offering price of $ 1.20 per share (“November 2022 Offering”).

The gross proceeds from the November 2022 Offering were $ 6,000 and the net proceeds were approximately $ 5,184 , after deducting underwriting discounts and commissions and other offering related expenses payable by the Company.

In January 2024, the Company ceased operations at Cognition Therapeutics PTY LTD, a wholly owned subsidiary (the “Subsidiary”) and completed its liquidation of the Subsidiary (the “Liquidation”).

In accordance with the Liquidation, the Company removed the AOCI balance associated with the currency translation adjustments and recorded a loss on liquidation of the Subsidiary in accumulated deficit.

On December 23, 2022, the Company filed a Registration Statement on Form S-3 (File No.

4 unchanged sentences

(the “Sales Agents”) providing for the offering, issuance and sale by the Company of up to $ 40,000 of its common stock from time to time in “at-the-market” offerings under the Shelf (the “ATM”).

During the nine months ended September 30, 2023, the Company sold 1,110,678 shares of its common stock pursuant to the ATM for gross proceeds of approximately $ 2,509 .

During the three months ended March 31, 2024, the Company sold 191,273 shares of its common stock pursuant to the ATM for gross proceeds of approximately $ 393 .

Please refer to Note 7 for further details.

3 unchanged sentences

333-268992) covering the resale of shares of common stock that may be issued under the Purchase Agreement.

During the nine months ended September 30, 2023, the Company sold 125,000 shares of common stock to Lincoln Park for proceeds of $ 205 , as part of the equity line financing arrangement.

As of September 30, 2023, $ 34,795 was available to draw pursuant to the Purchase Agreement.

As part of the Purchase Agreement, the Company issued 189,856 shares of its common stock as consideration for Lincoln Park’s commitment to purchase shares of common stock under the Purchase Agreement.

During the three months ended March 31, 2024, the Company did not sell any shares of common stock to Lincoln Park.

As of March 31, 2024, $ 34,795 was available to draw pursuant to the Purchase Agreement.

Please refer to Note 7 for further details.

The Company held cash and cash equivalents of $ 32,969 at September 30, 2023.

On March 14, 2024, the Company closed a follow-on public offering of 6,571,428 shares of the Company’s common stock at a public offering price of $ 1.75 per share (“March 2024 Offering”).

As part of the March 2024 Offering, the underwriters exercised their option to purchase 985,714 shares of the Company’s common stock on March 28, 2024, at a public offering price of $ 1.75 per share.

The gross proceeds from the March 2024 Offering were $ 13,225 and the net proceeds were approximately $ 11,896 , after deducting underwriting discounts and commissions and other offering related expenses payable by the Company.

The Company held cash and cash equivalents of $ 34,671 at March 31, 2024.

The Company expects that its cash and cash equivalents will enable it to fund its operating expenses and capital expenditure requirements through at least the one year period subsequent to the filing date of this Quarterly Report on Form 10-Q.

4 unchanged sentences

Basis of Presentation

The accompanying consolidated financial statements as of September 30, 2023, and for the three and nine months ended September 30, 2023 and 2022, have been prepared in accordance with the rules and regulations of the SEC and generally accepted accounting principles in the United States of America (“U.S.

The accompanying consolidated financial statements as of March 31, 2024, and for the three months ended March 31, 2024 and 2023, have been prepared in accordance with the rules and regulations of the SEC and generally accepted accounting principles in the United States of America (“U.S.

GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X.

1 unchanged sentence

GAAP for complete financial statements.

In the opinion of the Company’s management, the accompanying unaudited interim consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position as of September 30, 2023, the statements of operations and comprehensive loss and stockholders’ equity for the three and nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 2023 and 2022.

In the opinion of the Company’s management, the accompanying unaudited interim consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position as of March 31, 2024, the statements of operations and comprehensive loss and stockholders’ equity for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023.

Such adjustments are of a normal and recurring nature.

The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results for the year ending December 31, 2023, or for any future period.

The results for the three months ended March 31, 2024 are not necessarily indicative of the results for the year ending December 31, 2024, or for any future period.

These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2023, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 26, 2024.

12 unchanged sentences

Deferred grant income represents grant proceeds received by the Company prior to the period in which the reimbursable research and development services are incurred.

For the three and nine months ended September 30, 2023, the Company generated grant income of $ 7,684 and $ 18,035 , respectively, primarily from reimbursements from the National Institute of Aging (the “NIA”), a division of the NIH for aging research.

For the three and nine months ended September 30, 2022, the Company generated grant income of $ 5,947 and $ 18,236 , respectively, primarily from reimbursements from the NIA, a division of the NIH for aging research.

The current and

noncurrent portion of deferred grant income as of September 30, 2023 was $ 910 and $ 1,052 , respectively, as compared to the current and noncurrent portion of deferred grant income as of December 31, 2022 of $ 1,702 and $ 1,686 , respectively.

For the three months ended March 31, 2024 and 2023, the Company generated grant income of $ 4,912 and $ 3,426 , respectively, primarily from reimbursements from the National Institute of Aging (the “NIA”), a division of the NIH for aging research.

The current and noncurrent portion of deferred grant income as of March 31, 2024 was $ 1,584 and $ 0 , respectively, as compared to the current and noncurrent portion of deferred grant income as of December 31, 2023 of $ 1,701 and $ 0 , respectively.

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 contract research organizations (“CROs”), research institutions and/or consortiums involved in the grants, as well as facilities and administrative costs.

4 unchanged sentences

To date, the Company has not been found to have breached the terms of any NIH grant.

As of September 30, 2023, the Company has been awarded grants with project periods that extend through May 31, 2026, subject to extension.

As of March 31, 2024, the Company has been awarded grants with project periods that extend through May 31, 2027, subject to extension.

Research and Development Costs

1 unchanged sentence

Research and development costs are expensed as incurred.

Research and development expenses consist principally of personnel costs, including salaries, stock-based compensation, and benefits for employees, third-party license fees and other operational costs related to our research and development activities, including allocated facility-related expenses and external costs of outside vendors, and other direct and indirect costs.

Research and development expenses consist principally of personnel costs, including salaries, stock-based compensation, and benefits for employees, third-party license fees and other operational costs related to its research and development activities, including allocated facility-related expenses and external costs of outside vendors, including CROs, and other direct and indirect costs.

Non-refundable research and development costs are deferred and expensed as the related goods are delivered or services are performed.

4 unchanged sentences

The Company also has granted awards subject to performance-based vesting.

The Company would recognize compensation expense for these awards commencing in the period in which the vesting condition becomes probable of achievement.

Grant date fair value is estimated on the date of grant using the Black-Scholes option pricing model.

The Company recognizes compensation expense for these awards commencing in the period in which the vesting condition becomes probable of achievement.

The grant date fair value of stock options are estimated on the date of grant using the Black-Scholes option pricing model.

Forfeitures are recognized in the period in which they occur.

6 unchanged sentences

The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock.

Prior to the IPO, due to the absence of an active market for the Company’s common stock, the Company utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation , to estimate the fair value of its common stock.

of its common stock.

In determining the exercise prices for stock options granted, the Company has considered the estimated fair value of the common stock as of the measurement date.

33 unchanged sentences

Recent Accounting Pronouncements

There have been no new pronouncements issued during the nine months ended September 30, 2023, which could be expected to materially impact the Company’s consolidated financial statements.

Not Yet Adopted

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements (“ASU 2023-06”), to clarify or improve disclosure and presentation requirements of a variety of topics and align the requirements in the FASB ASC with the SEC's regulations.

The Company is currently evaluating ASU 2023-06 to determine its impact on the Company's consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”).

The standard enhances transparency in income tax disclosures by requiring, on an annual basis, certain disaggregated information about a reporting entity’s effective tax rate reconciliation and income taxes paid.

The ASU also requires disaggregated disclosure related to pre-tax income (or loss) and income tax expense (or benefit) and eliminates certain disclosures related to the balance of an entity’s unrecognized tax benefit and the cumulative amount of certain temporary differences.

The ASU is effective for the Company beginning on January 1, 2025.

The Company is currently evaluating ASU 2023-09 to determine its impact on the Company's disclosures.

In accordance with ASC 270, Interim Reporting , and ASC 740, Income Taxes , the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate, apply that rate in providing for income taxes on a current year-to-date (interim period) basis, and include the tax impact for discrete items within the interim period.

The Company maintains a full valuation allowance against all deferred tax assets as of September 30, 2023 and December 31, 2022, as management has determined that it is not more likely than not that the Company will realize these future tax benefits.

As of September 30, 2023 and December 31, 2022, the Company had no uncertain tax positions.

The Company maintains a full valuation allowance against all deferred tax assets as of March 31, 2024 and December 31, 2023, as management has determined that it is not more likely than not that the Company will realize these future tax benefits.

As of March 31, 2024 and December 31, 2023, the Company had no uncertain tax positions.

Financial Instruments and Fair Value Measurements

Financial assets and liabilities measured at fair value are summarized below:

As of September 30, 2023

As of March 31, 2024

Quoted Priced in

11 unchanged sentences

Accrued expense consists of the following:

September 30, 2023

March 31, 2024

December 31, 2023

6 unchanged sentences

Total payments of approximately $ 62 , including interest and principal, are due monthly from November 2023 through October 2024.

As of September 30, 2023 and December 31, 2022, the outstanding principal of the loan was $ 0 and $ 634 , respectively, and is included in other current liabilities on the consolidated balance sheet.

As of March 31, 2024 and December 31, 2023, the outstanding principal of the loan was $ 366 and $ 544 , respectively, and is included in other current liabilities on the consolidated balance sheet.

Commitments and Contingencies

Operating Leases

Amounts reported in the consolidated balance sheets for leases where the Company is the lessee as of September 30, 2023 were as follows, in thousands:

September 30, 2023

Amounts reported in the consolidated balance sheets for leases where the Company is the lessee as of March 31, 2024 were as follows, in thousands:

March 31, 2024

December 31, 2023

Operating lease assets

3 unchanged sentences

Total operating lease liabilities

Operating lease costs for the three and nine months ended September 30, 2023 was $ 53 and $ 161 , respectively, as compared to operating lease costs for the three and nine months ended September 30, 2022 of $ 50 and $ 149 , respectively.

The maturities of the operating lease liabilities and minimum lease payments as of September 30, 2023 were as follows:

Operating lease costs for the three months ended March 31, 2024 and 2023 was $ 55 and $ 50 , respectively.

The maturities of the operating lease liabilities and minimum lease payments as of March 31, 2024 were as follows:

For the Years Ended December 31,

4 unchanged sentences

Present value of operating lease liabilities

The following table summarizes the lease term and discount rate as of September 30, 2023:

September 30, 2023

The following table summarizes the lease term and discount rate as of March 31, 2024:

March 31, 2024

December 31, 2023

Weighted-average remaining lease term (years)

2 unchanged sentences

Operating leases

The following table summarizes the supplemental cash flow information related to the Company’s operating leases:

Nine Months Ended September 30,

(In Thousands)

Operating cash flows used for operating leases

Operating cash flows used for operating leases for the three months ended March 31, 2024 and 2023 was $ 56 and $ 50 , respectively.

Litigation and Contingencies

1 unchanged sentence

When the Company determines that a loss is both probable and reasonably estimable, a liability is recorded and disclosed if the amount is material to the financial statements taken as a whole.

When a material loss contingency is only reasonably possible, the Company does not record a liability but instead discloses the nature and the amount of the claim and an estimate of the loss or range of loss, if such an estimate can reasonably be made.

As of September 30, 2023 and December 31, 2022, there was no litigation or contingency with at least a reasonable possibility of a material loss.

When a material loss contingency is

only reasonably possible, the Company does not record a liability but instead discloses the nature and the amount of the claim and an estimate of the loss or range of loss, if such an estimate can reasonably be made.

As of March 31, 2024 and December 31, 2023, there was no litigation or contingency with at least a reasonable possibility of a material loss.

Stockholders’ Equity

2 unchanged sentences

Common stockholders are entitled to dividends if and when declared by the Company’s board of directors subject to the rights of the preferred stockholders.

As of September 30, 2023, no dividends on common stock had been declared by the Company.

As of March 31, 2024, no dividends on common stock had been declared by the Company.

On December 23, 2022, the Company filed a shelf registration statement on Form S-3 with the SEC in relation to the registration of common stock, preferred stock, debt securities, warrants, subscription rights, and/or units of any combination thereof of up to $ 200,000 in aggregate (the “Shelf”).

1 unchanged sentence

The Company also simultaneously entered into a sales agreement with the Sales Agents providing for the offering, issuance and sale by the Company of up to $ 40,000 of its common stock from time to time in ATM offerings under the Shelf.

The Company sold 1,110,678 shares of common stock pursuant to the ATM during the nine months ended September 30, 2023 for gross proceeds of approximately $ 2,509 .

As of September 30, 2023, there was $ 37,491 remaining of common stock available for sale under the ATM.

The Company sold 191,273 shares of common stock pursuant to the ATM during the three months ended March 31, 2024 for gross proceeds of approximately $ 393 .

As of March 31, 2024, there was $ 34,321 remaining of common stock available for sale under the ATM, subject to the limitations of General Instruction I.B.6 of Form S-3.

Lincoln Park Purchase Agreement

3 unchanged sentences

The Company recorded $ 318 to other expense, net in connection with the issuance of the Commitment Shares.

During the nine months ended September 30, 2023, the Company sold 125,000 shares of common stock to Lincoln Park for proceeds of $ 205 , as part of the equity line financing arrangement.

As of September 30, 2023, $ 34,795 was available to draw pursuant to the Purchase Agreement.

During the three months ended March 31, 2024, the Company did not sell any shares of common stock to Lincoln Park.

As of March 31, 2024, $ 34,795 was available to draw pursuant to the Purchase Agreement.

March 2024 Offering

In March 2024, the Company entered into an underwriting agreement with Titan Partners Group LLC, a division of American Capital Partners, LLC, relating to the issuance and sale by the Company of 7,557,142 shares of its common stock, which included the exercise of the underwriters’ option to purchase 985,714 additional shares of common stock, at a public offering price of $ 1.75 per share.

The Company closed this offering on March 14, 2024 and the full exercise of the underwriters’ option to purchase 985,714 additional shares of common stock was closed on March 28, 2024.

The Company received net proceeds of approximately $ 11,896 , after deducting $ 1,329 of underwriting discounts and commissions and other offering related expenses payable by the Company.

Equity-based Compensation

6 unchanged sentences

All other types of awards may be issued to employees, directors, consultants, and other service providers.

As of September 30, 2023, the aggregate number of shares of common stock of the Company that may be issued under the 2021 Plan is 2,982,942 .

As of March 31, 2024, the aggregate number of shares of common stock of the Company that may be issued under the 2021 Plan is 2,650,583 .

The number of shares reserved for issuance under the 2021 Plan increased automatically on January 1, 2024 pursuant to an evergreen provision therein by 643,309 shares, representing 2 % of total common shares outstanding at December 31, 2023.

5 unchanged sentences

On September 15, 2017, the Company’s board of directors approved the 2017 Plan, which provides for the granting of incentive stock options, non-qualified stock options and stock awards to employees, certain consultants and directors.

The board of directors, or its designated committee, has the sole authority to select the individuals to whom awards are

granted and determine the terms of each award, including the number of shares and the schedule upon which the award becomes exercisable.

The board of directors, or its designated committee, has the sole authority to select the individuals to whom awards are granted and determine the terms of each award, including the number of shares and the schedule upon which the award becomes exercisable.

Upon the effectiveness of the 2021 Plan, no further awards will be granted under the 2017 Plan.

4 unchanged sentences

Under the ESPP, the Company may provide employees and employees of the Subsidiary with an opportunity to purchase shares of the Company’s common stock at a discounted purchase price.

As of September 30, 2023, subject to adjustment as provided in the ESPP, a total of 209,532 shares of common stock are authorized and reserved for issuance under the ESPP.

As of March 31, 2024, subject to adjustment as provided in the ESPP, a total of 209,532 shares of common stock are authorized and reserved for issuance under the ESPP.

Subject to prior approval by the board of directors in each instance, on or about January 1, 2022 and each anniversary of such date thereafter prior to the termination of the ESPP, the number of shares of common stock authorized and reserved for issuance under the ESPP will be increased by a number of shares of common stock equal to the least of (i) 1,000,000 shares of common stock, (ii) 1 % of the shares of common stock outstanding on the final day of the immediately preceding calendar year, and (iii) such smaller number of shares of common stock as determined by the board of directors.

Such shares of common stock may be newly issued shares, treasury shares or shares acquired on the open market.

In the event that any dividend or other distribution (whether in the form of cash, our common stock, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, or exchange of common stock or other securities, or other change in the structure affecting common stock occurs, then in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the ESPP, the compensation committee will, in such manner as it deems equitable, adjust the number of shares and class of common stock that may be delivered under the ESPP, the purchase price per share and the number of shares covered by each outstanding option under the ESPP, and the numerical limits described above.

In the event that any dividend or other distribution (whether in the form of cash, our common stock, or other

property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, or exchange of common stock or other securities, or other change in the structure affecting common stock occurs, then in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the ESPP, the compensation committee will, in such manner as it deems equitable, adjust the number of shares and class of common stock that may be delivered under the ESPP, the purchase price per share and the number of shares covered by each outstanding option under the ESPP, and the numerical limits described above.

Stock Options

The fair value of options granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

Nine Months Ended September 30,

Three Months Ended March 31,

Fair value of common stock

15 unchanged sentences

Expected Volatility — Up until October 13, 2021, the Company was privately held and did not have a trading history of common stock.

As such, the expected volatility was derived from the average historical stock volatilities of the common

stock of several public companies within the industry that the Company considers to be comparable to our business over a period equivalent to the expected term of the stock-based awards.

As such, the expected volatility was derived from the average historical stock volatilities of the common stock of several public companies within the industry that the Company considers to be comparable to our business over a period equivalent to the expected term of the stock-based awards.

The Company will continue to derive expected volatility from average historical stock volatilities of industry peers until the Company has compiled a trading history of its own for a sufficient period of time.

11 unchanged sentences

Options expired

Balance, September 30, 2023

Exercisable as of September 30, 2023

The weighted-average grant date fair value of stock options granted was $ 1.25 and $ 1.59 during the three and nine months ended September 30, 2023, respectively.

The weighted-average grant date fair value of stock options granted was $ 1.47 and $ 1.90 during the three and nine months ended September 30, 2022, respectively.

There were 19,500 and 595,769 stock options granted at an aggregate fair value of $ 24 and $ 950 for the three and nine months ended September 30, 2023, respectively.

There were 14,000 and 449,270 stock options granted at an aggregate fair value of $ 21 and $ 838 for the three and nine months ended September 30, 2022, respectively.

During the three and nine months ended September 30, 2023, there were no stock options exercised.

During the three and nine months ended September 30, 2022 there were 1,371,589 and 1,739,465 stock options exercised, respectively, with an aggregate grant date fair value of $ 1,018 and $ 1,308 , respectively.

The intrinsic value of stock options exercised during the three and nine months ended September 30, 2022 was $ 1,596 and $ 2,717 , respectively.

Balance, March 31, 2024

Exercisable as of March 31, 2024

The weighted-average grant date fair value of stock options granted was $ 1.56 and $ 1.62 during the three months ended March 31, 2024 and 2023, respectively.

There were 205,000 and 412,720 stock options granted at an aggregate fair value of $ 320 and $ 668 for the three months ended March 31, 2024 and 2023, respectively.

During the three months ended March 31, 2024 and 2023, there were no stock options exercised.

Restricted Stock Units

1 unchanged sentence

Each RSU represents a contingent right to receive one share of the Company’s common stock upon vesting.

RSUs for employees vest annually over three years on each anniversary of the Grant Date and RSUs for non-employee directors vest on the one-year anniversary of the Grant Date.

The following table summarizes the Company’s RSU activity for the nine months ended September 30, 2023:

RSUs with time base vesting conditions for employees vest annually over three or four years on each anniversary of the Grant Date and RSUs for non-employee directors vest on the one-year anniversary of the Grant Date.

RSUs with performance conditions for employees vest on the one-year anniversary of the performance achievement date.

During the three months ending March 31, 2024, the Company granted 796,200 RSU awards containing performance and time based vesting conditions to employees.

As of March 31, 2024, the Company determined that the achievement of the performance target was probable and therefore, recognized expense for these awards during the three months ended March 31, 2024.

The following table summarizes the Company’s RSU activity for the three months ended March 31, 2024:

Weighted-Average

Restricted Stock Units

Grant Date Fair Value

Outstanding at December 31, 2023

Outstanding at September 30, 2023

Outstanding at March 31, 2024

Equity-based Compensation Expense

The Company recorded total equity-based compensation expense in the statement of operations and comprehensive loss related to stock options and restricted stock units as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Research and development

1 unchanged sentence

Total equity-based compensation

As of September 30, 2023, total future compensation expense related to unvested awards yet to be recognized by the Company was $ 5,306 , which is expected to be recognized over a weighted-average remaining vesting period of approximately 1.69 years.

As of March 31, 2024, total future compensation expense related to unvested awards yet to be recognized by the Company was $ 4,970 , which is expected to be recognized over a weighted-average remaining vesting period of

approximately 1.91 years.

Total unrecognized compensation expense related to unvested performance-based awards was $ 940 , which is expected to be recognized over a weighted-average remaining vesting period of approximately 1.5 years.

Net Loss per Share

The following outstanding potentially dilutive common stock equivalents have been excluded from the calculation of diluted net loss per share for the periods presented due to their antidilutive effect:

September 30,

Options issued and outstanding

Restricted stock units issued and oustanding

Restricted stock units issued and outstanding

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 1. Financial Statements