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Item 2. Management’s Discussion and Analysis

2025-05-07 compared with 2024-11-13 · 132 added, 154 removed, 151 unchanged (65% of the section changed)

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Our goal is to develop disease-modifying treatments for participants 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.

Data indicates that CT1812 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 CT1812 engagement with the S2R results in improved synapse function.

In the SNAP study, results of which were published in May 2023 in the journal, Translational Neurodegeneration and showed that a single oral dose of CT1812 rapidly displaces Aβ oligomers from synapses of individuals with AD.

In the SEQUEL study, top-line results showed that four weeks of treatment with CT1812 improved synapse activity and connectivity of brain regions as measured via quantitative electroencephalogram (“qEEG”).

In blinded and unblinded clinical trials, several participants experienced asymptomatic, reversible elevations in serum liver chemistries prompting harmonization of monitoring, increasing frequency where appropriate, across our clinical trials.

The SPARC trial, results of which were published in January 2024 in the Journal of Alzheimer’s Research & Therapy, showed the ability of CT1812 to mitigate brain volume atrophy consistent with neurodegenerative disease.

In July 2024, we reported results from our Phase 2 SHINE trial, which showed a consistent trend in cognitive improvement in participants treated with CT1812 (pooled 100mg and 300mg) compared to placebo across all cognitive measures including ADAS-Cog 11, ADAS-Cog 13, cognitive composite and Mini-Mental State Examination (MMSE) scores.

In addition, there were signals of improvement in functional measures (ADCS-ADL and ADCS-CGIC).

SHINE enrolled 153 adults with mild-to-moderate (MMSE 18-26) Alzheimer's disease who were randomized evenly (1:1:1) to one of two oral daily doses of CT1812 (100mg or 300mg) or placebo.

P-values less than 0.05 were observed on ADAS-Cog 11 and MMSE at Day 98, the midpoint of the study.

Through the course of the study, participants in the placebo arm worsened approximately 2.70 points as measured by ADAS-Cog 11 on Day 182.

In contrast, CT1812-treated participants declined by an average of 1.66 points, a 39% slowing of decline favoring CT1812.

Similar results were seen in the MMSE score on Day 98 for the pooled CT1812 arms.

On the exploratory measures of function (ADCS-ADL and CGIC), there was a signal of benefit favoring CT1812 at the six-month timepoint.

In the SHINE trial, CT1812 did not achieve statistical significance on the first of the ordered secondary efficacy endpoints in the pooled 100mg and 300mg dose group compared to placebo.

The SHINE trial achieved its primary objective and demonstrated a favorable safety and tolerability profile, consistent with previous clinical experience.

The percentage of participants experiencing any adverse event was similar between the pooled CT1812 treatment arms (76.5%) and the placebo group (78%).

The majority of

adverse events were mild or moderate in severity.

In the placebo arm, 10% of participants experienced a serious adverse event (“SAE”) compared to approximately 5% in the combined CT1812 treated arms.

Among CT1812-treated participants, two experienced treatment-emergent SAEs in the 100mg group, including stomatitis, chronic constipation, and hip fracture (all deemed not related to treatment) and three experienced treatment-emergent SAEs in the 300mg group, including hematuria, abdominal pain, and infection (all deemed not related to treatment) and recurrent presyncope (deemed related to treatment).

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.

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.

Top-line results from the Phase 2 COG0201 SHINE study were reported in July 2024 with additional data reported in October 2024.

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

Participants were divided into two zervimesine dose groups (100 mg or 300 mg) and one placebo group, who were dosed daily for six months.

Endpoints included safety and biomarker evidence of disease modification as well as cognitive function, as measured by ADAS-Cog 11.

SHINE met its primary endpoints of safety and tolerability.

A prespecified analysis conducted on SHINE results identified plasma p-tau217 as a biomarker that may predict an optimal therapeutic response in patients with mild-to-moderate AD.

Participants treated with zervimesine (pooled 100 mg and 300 mg) who had baseline levels of plasma p-tau217 below the median of 1.0 pg/mL experienced a 95% reduction of cognitive decline at week 26 as measured by ADAS-Cog 11 relative to placebo-treated participants.

P-tau217 is an important biomarker that has shown the ability to distinguish Alzheimer’s disease from other neurodegenerative disorders with a high degree of accuracy compared to other available biomarkers.

In the overall modified intent-to-treat, or mITT, 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 versus baseline compared to placebo-treated, but did not achieve statistical significance.

There were consistent trends favoring zervimesine in other cognitive measures:

ADAS-Cog 13, cognitive composite, MMSE;

as well as in functional measures of activities of daily living (ADCS-ADL) and of clinical global impression of change (ADCS-CGIC).

No discontinuations due to AEs occurred in the 100 mg zervimesine group.

At the 300 mg dose, ten participants (nine at scheduled visits and one at an unscheduled visit) experienced treatment-emergent liver enzyme test (“LFT”) increases (greater than 3xULN) that subsided after cessation of drug without evidence of serious liver injury.

There were no LFT elevations observed in the 100 mg dose.

The SHINE study was designed with several pre-planned analyses to further our understanding of CT1812’s mechanism of action and its impact on certain biomarker-defined subgroups.

Results of a pre-specified analysis based on participants’ blood levels of p-tau217 at baseline were reported at the Clinical Trials in Alzheimer’s Disease (CTAD) conference in October 2024.

Individuals with lower Alzheimer’s disease pathology at baseline as reflected by lower levels of plasma p-tau217 have been shown to have a greater response to amyloid-based therapies.

This analysis demonstrated that CT1812-treated participants with plasma p-tau217 below the median of 1.0 pg/mL experienced a 95% slowing in rate of cognitive decline on the ADAS-Cog 11 scale and 108% decline on the MMSE.

The placebo-treated participants with below-median p-tau217 declined almost 3 points on the ADAS-Cog 11 scale by the end of the study.

Placebo patients in both analyses experienced cognitive decline.

We have enrolled 130 patients in the Phase 2 COG1201 (SHIMMER) study of CT1812 in mild-to-moderate dementia with Lewy bodies, or DLB.

The design of this trial is a double-blind, randomized, six-month trial involving three dose groups, two active treatment cohorts and a placebo group.

Clinical endpoints of the trial include safety and physical activity measurements, cognitive assessments, and PK and pharmacodynamic biomarker analyses compared to baseline measurements recorded at the beginning of the trial.

In addition, as an exploratory analysis, cerebrospinal fluid will be collected and analyzed for α-synuclein content and established patterns of differential protein expression.

This study is not powered to show significance in the efficacy endpoints.

We expect to report topline results from our SHIMMER trial by year-end 2024.

Since our inception in 2007, we have incurred significant operating losses and devoted substantially all of our time and resources to developing our lead product candidate, CT1812, building our intellectual property portfolio, raising capital and recruiting management and technical staff to support these operations.

As of September 30, 2024, we had an accumulated deficit of $167.3 million.

We incurred a net loss of $9.9 million and $26.1 million for the three and nine months ended September 30, 2024, respectively, and net loss of $6.7 million and $17.6 million for the three and nine months ended September 30, 2023, respectively.

In the overall study population, participants treated zervimesine for six months had reductions in plasma biomarkers associated with Alzheimer’s disease processes compared to placebo participants.

Further analysis showed that the individuals with below-median plasma p-Tau217 experienced a pronounced reduction in these key plasma biomarkers compared to placebo.

Significant reductions were observed in the level of glial fibrillary acidic protein (GFAP), a protein associated with neuroinflammation.

Neurofilament light (NfL), a protein associated with neurodegeneration was also reduced in participants treated with zervimesine compared to placebo.

Similarly, amyloid beta (Aβ) and tau species (p-Tau217), which are proteins that build up in patients with Alzheimer’s disease, were lower in participants treated with zervimesine for six months compared to placebo-treated individuals.

These findings were presented at the AD/PD™ 2025 Alzheimer's & Parkinson's Diseases Conference in April 2025.

Top-line results from the Phase 2 COG1201 SHIMMER study were presented at the International Lewy Body Dementia Conference (ILBDC) in January 2025.

The study enrolled 130 participants who were randomized evenly to one of three dose groups:

two treated with once-daily oral zervimesine (100 mg or 300 mg) and one treated with placebo.

To be eligible, participants were between 50 and 80 years of age, received a diagnosis of probable DLB, and had a mini-mental state exam, or MMSE, score of between 18 and 27.

The study met its primary endpoints of safety and tolerability.

Zervimesine-treated DLB patients scored an average of 86% better than placebo-treated patients on the neuropsychiatric inventory (NPI) A-L at the end of the study.

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

Compared to placebo-treated participants, those treated with zervimesine performed an average of 52% better on the ADCS-ADL scale, a measure of activities of daily living;

an average of 91% better on the CAF, a measure of cognitive fluctuations;

an average of 62% better on the Unified Parkinson's Disease Rating Scale (UPDRS) Part III, a measure of motor function such as gait, balance, and tremor.

In 2023 we initiated the Phase 2 COG2201 MAGNIFY study of zervimesine in adults with geographic atrophy secondary to dry AMD.

In January 2025, we made the strategic decision to focus our resources on our promising dementia programs in AD and DLB.

Therefore, we voluntarily discontinued the MAGNIFY clinical study after 100 of the planned 246 participants were enrolled.

The discontinuation was not the result of any safety concerns.

MAGNIFY previously passed a masked futility analysis conducted by the contract research organization, or CRO.

Results of the analysis, which was conducted on the first 57 participants who completed at least 6 months of dosing, showed that zervimesine-treated patients were experiencing a slower lesion growth rate than those on placebo.

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

The following table highlights findings from these and subsequent studies:

Study Identifier

Clinical Phase

Alzheimer’s Disease (AD)

COG0203 (START)

The study is enrolling up to 540 participants with MCI or early AD

mild-moderate

COG0201 (SHINE)

Phase 2 (n=153)

Participants treated with zervimesine experienced a cognitive benefit compared to placebo

mild-moderate

COG0202 (SEQUEL)

Phase 2 (n=16)

Participants treated with zervimesine exhibited improvement across prespecified EEG parameters

mild-moderate

COG0105 (SPARC)

Phase 1 (n=23)

Treatment with zervimesine was assessed using various imaging modalities, including PET imaging and volumetric MRI (vMRI)

mild-moderate

COG0104 (SNAP)

Phase 1 (n=3)

Confirmed preclinical findings showing an increase in Aβ oligomers in CSF, suggesting increased off-rate from receptors

Dementia with Lewy Bodies (DLB)

mild-moderate

COG1201 (SHIMMER)

Phase 2 (n=130)

Participants treated with zervimesine experienced benefits across behavioral, functional, cognitive and motor scales

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 $171.0 million in cumulative grant awards to fund our clinical trials, primarily from the NIA, and we have raised approximately $126.4 million in net proceeds from sales of our equity securities, convertible notes, SAFE, stock option exercises, IPO and follow-on public offerings, ATM, and equity line financing with Lincoln Park.

As of September 30, 2024, we had cash and cash equivalents of $22.0 million.

To date, $53.6 million of the cumulative grant funds remain available.

Since our inception, we have received approximately $139.5 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, 2025, we had cash and cash equivalents of $16.4 million.

As of March 31, 2025, we had approximately $47.0 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”).

We sold 864,404 shares of common stock under the ATM during the nine months ended September 30, 2024 for gross proceeds of approximately $0.9 million.

As of September 30, 2024, there was approximately $33.8 million of common stock remaining available for sale under the ATM.

For the three months ended March 31, 2025, we sold 2,004,729 shares of common stock pursuant to the ATM for gross proceeds of approximately $1.5 million.

As of March 31, 2025, we have approximately $20.4 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.

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.

333-268992) covering the resale of shares of common stock that are issued under the Lincoln Park Purchase Agreement.

During the nine months ended September 30, 2024, we did not sell any shares of common stock to Lincoln Park.

As of September 30, 2024, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

During the three months ended March 31, 2025, we did not sell any shares of common stock to Lincoln Park.

As of March 31, 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.

On March 28, 2024, the underwriters exercised their option to purchase 985,714 shares of our common stock at a public offering price of $1.75 per share.

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.

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.

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 do not own or operate manufacturing facilities.

We rely, and expect to continue to rely, on third parties for the manufacture of CT1812 for preclinical studies and clinical trials, as well as for commercial manufacture if CT1812 obtains marketing approval.

We also rely, and expect to continue to rely, on third parties to manufacture, package, label, store, and distribute CT1812, if marketing approval is obtained.

We believe that this strategy allows us to maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment, and personnel while also enabling us to focus our expertise and resources on the development of CT1812.

Impact of COVID-19 on Our Business

Our business has been and could be adversely affected by the effects of the COVID-19 pandemic or other national health issues.

For example, our ongoing and/or planned clinical trials may be impacted by interruptions or delays at clinical trial sites or operations of the FDA and comparable foreign regulatory authorities.

Additionally, we have made certain adjustments to the operation of our trials in an effort to ensure the monitoring and safety of participants and minimize risks to trial integrity during the pandemic in accordance with the guidance issued by the FDA and may need to make further adjustments in the future.

While the potential further economic impact brought by the COVID-19 pandemic may be difficult to assess or predict, there could be a significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and financial position.

As a result, we may face difficulties raising capital through future sales of our common stock or such sales may be on unfavorable terms.

We rely, and expect to continue to rely, on third parties for the manufacture of zervimesine for preclinical studies and clinical trials, as well as for commercial manufacture if zervimesine obtains marketing approval.

We also rely, and expect to continue to rely, on third parties to manufacture, package, label, store, and distribute zervimesine, if marketing approval is obtained.

Components of Our Results of Operations

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Non-refundable advance payments for goods and services that will be used over time for research and development are capitalized and recognized as goods are delivered or as the related services are performed.

In-licensing fees and other costs to acquire technologies used in research and development that have not yet received regulatory approval and that are not expected to have an alternative future use are expensed when incurred.

In-licensing fees and other costs to acquire technologies used in research and development

that have not yet received regulatory approval and that are not expected to have an alternative future use are expensed when incurred.

We track direct costs by stage of program, clinical or preclinical.

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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.

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 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.

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 September 30, 2024, 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 CT1812 in participants with early-stage AD, an approximately $30.5 million grant from the NIA to fund our Phase 2 (COG0201-SHINE) study of CT1812 in participants with mild-to-moderate AD, and an approximately $29.5 million grant from the NIA to fund our Phase 2 (COG1201-SHIMMER) study of CT1812 in participants with dementia with Lewy bodies.

Other Income (Expense), Net

Other income (expense), net consists primarily of interest income from money market funds, other fees such as offering costs incurred to establish our equity line financing, as well as foreign currency transaction gains or losses.

As of March 31, 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 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.

Other Income, Net

Other income, net consists primarily of interest income from money market funds, offset partially by other fees such as costs incurred to establish financing opportunities.

Interest Expense

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

Interest expense for the three months ended March 31, 2025 and 2024 consisted of interest expense related to the insurance premium financing arrangement with a lender.

Results of Operations

Comparison of the Three Months Ended September 30, 2024 and 2023

Comparison of the Three Months Ended March 31, 2025 and 2024

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

Three Months Ended September 30,

Three Months Ended March 31,

Operating Expenses:

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Interest expense

Total other income, net

Research and Development Expenses

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

Three Months Ended September 30,

Clinical programs

Manufacturing

Preclinical programs

Other expense

Research and development expenses were $11.4 million for the three months ended September 30, 2024, compared to $11.7 million for the three months ended September 30, 2023.

The decrease of $0.3 million was primarily due to the following:

● an increase of $2.6 million in clinical programs primarily related to increased Phase 2 trial activities with contract research organizations;

● an increase of $0.4 million in personnel costs associated with expanded research and development activities, and equity-based compensation expense;

● a decrease of $2.2 million in manufacturing related to lower costs with contract manufacturing organizations for the production of pre-clinical and future clinical trial supply ;

● a decrease of $1.1 million in preclinical programs and other expense primarily due to decreased research activities .

General and Administrative Expenses

General and administrative expenses were $3.1 million for the three months ended September 30, 2024, compared to $3.1 million for the three months ended September 30, 2023.

The change in general and administrative expenses was not significant period over period.

Other Income (Expense)

Grant income was $4.3 million for the three months ended September 30, 2024, compared to $7.7 million for the three months ended September 30, 2023.

The change in grant income is correlated with the decrease in eligible reimbursable costs related to clinical trials incurred during 2024 as compared to 2023.

Other Income, Net

Other income, net was $0.2 million for the three months ended September 30, 2024, compared to other income, net of $0.3 million for the three months ended September 30, 2023.

The decrease in other income, net was driven primarily by lower interest earned on money market funds.

Interest Expense

Interest expense was less than $0.1 million for the three months ended September 30, 2024, compared to interest expense of less than $0.1 million for the three months ended September 30, 2023.

Interest expense was not significant in either period.

Comparison of the Nine Months Ended September 30, 2024 and 2023

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

Nine Months Ended September 30,

Operating Expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Other income (expense), net

Interest expense

Loss on currency translation from liquidation of subsidiary

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

Nine Months Ended September 30,

Three Months Ended March 31,

Clinical programs

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Other expense

Total research & development expenses

Research and development expenses were $ 33.5 million for the nine months ended September 30, 2024, compared to $25.6 million for the nine months ended September 30, 2023.

Research and development expenses were $10.8 million for the three months ended March 31, 2025, compared to $10.6 million for the three months ended March 31, 2024.

The increase of $0.2 million was primarily due to the following:

● an increase of $0.5 million in clinical programs primarily related to increased Phase 2 trial activities with contract research organizations;

● an increase of $1.4 million in personnel costs associated with expanded research and development activities, and equity-based compensation expense;

● a decrease of $1.6 million in manufacturing related to lower costs with contract manufacturing organizations for the production of pre-clinical and future clinical trial supply;

● a decrease of $2.3 million in preclinical programs and other expense, primarily due to decreased research activities.

● an increase of $0.2 million in personnel costs related to increases in year over year employee compensation and benefits;

● a decrease of $0.4 million in manufacturing related to lower costs with contract manufacturing organizations for the replenishment of clinical trial supply;

● a decrease of $0.1 million in preclinical programs and other expenses primarily due to decreased research activities.

General and Administrative Expenses

General and administrative expenses were $9.7 million for the nine months ended September 30, 2024, compared to $9.9 million for the nine months ended September 30, 2023.

The decrease of $0.2 million in general and administrative expenses was driven by lower professional services.

General and administrative expenses were $3.0 million for the three months ended March 31, 2025, compared to $3.5 million for the three months ended March 31, 2024.

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

Other Income (Expense)

Grant income was $16.5 million for the nine months ended September 30, 2024, compared to $18.0 million for the nine months ended September 30, 2023.

The change in grant income is correlated with the decrease in eligible reimbursable costs incurred during 2024 as compared to 2023.

O ther Income (Expense), Ne t

Other income, net was $0.8 million for the nine months ended September 30, 2024, compared to other expense, net of $0.1 million for the nine months ended September 30, 2023.

The increase in other income (expense), net was driven primarily by interest earned on money market funds, as well as prior year expenses related to the Lincoln Park Purchase Agreement not repeated in 2024.

Grant income was $5.1 million for the three months ended March 31, 2025, compared to $4.9 million for the three months ended March 31, 2024.

The change in grant income is correlated with the increase in eligible reimbursable costs related to clinical trials incurred during 2025 as compared to 2024.

Other Income, Net

Other income, net was $0.2 million for the three months ended March 31, 2025, compared to other income, net of $0.2 million for the three months ended March 31, 2024.

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

Interest Expense

Interest expense was less than $0.1 million for the nine months ended September 30, 2024, compared to interest expense of less than $0.1 million for the nine months ended September 30, 2023.

Interest expense was less than $0.1 million for the three months ended March 31, 2025, compared to interest expense of less than $0.1 million for the three months ended March 31, 2024.

Interest expense was not significant in either period.

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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 received grant awards primarily from the NIA in the aggregate amount of approximately $171.0 million and have raised approximately $126.4 million in net proceeds from sales of our equity securities, convertible notes and SAFE, stock option exercises, our ATM, our equity line financing with Lincoln Park, our IPO and our follow-on public offering.

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 $139.5 million in net proceeds from sales of our equity securities, convertible notes and SAFE, stock option exercises, our ATM, our equity line financing with Lincoln Park, our IPO and our follow-on public offering.

The net proceeds from our IPO, which closed on October 13, 2021, were approximately $44.2 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us.

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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 September 30, 2024, we sold 3,723,478 shares of common stock under the ATM for gross proceeds of approximately $6.2 million.

As of September 30, 2024, there was $33.8 million of common stock remaining available for sale under the ATM.

As of March 31, 2025, we sold 24,776,992 shares of common stock under the ATM for gross proceeds of approximately $19.6 million.

As of March 31, 2025, there was $20.4 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.

In addition, in March 2023, we entered into the Lincoln Park Purchase Agreement with Lincoln Park Capital Fund, LLC , or 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 September 30, 2024, 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, 2024, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

As of March 31, 2025, we 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 March 31, 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 September 30, 2024, we had $22.0 million in cash and 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, and income from non-dilutive grants, will be sufficient for us to fund our operating expenses and capital expenditures into the second quarter of 2025, which assumes no usage from the remaining ATM nor the Lincoln Park Purchase Agreement.

As of March 31, 2025, we had $16.4 million in cash and 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 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 fourth quarter of 2025, 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.

As of November 13, 2024, the date of issuance of this Quarterly Report, we believe that our cash and cash equivalents as of September 30, 2024 is not sufficient to fund operations for the period through one year after the date of this filing and therefore we have concluded that substantial doubt exists about our ability to continue as a going concern.

To execute our business plans, we will need substantial funding to support our continuing operations and pursue our growth strategy.

Until such time that we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of common stock in public offerings and/or private placements, debt financings or other capital sources, including collaborations with other companies or other strategic transactions.

There can be no assurance that additional financing will be available to us or that such financing, if available, will be available on terms acceptable to us.

The terms of any financing may adversely affect the holdings or the rights of our stockholders.

If we are unable to obtain funding, we could be forced to delay, reduce or abandon our product development programs, which could have a material adverse effect on our business prospects.

Future Funding Requirements

We anticipate that we will need to raise additional funding in the future to fund our operations, including continuing and completing our clinical trials.

We anticipate that we will need to raise additional funding in the future to fund our operations, including the commercialization of any approved product candidates.

We are subject to the risks typically related to the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business.

Our future funding requirements will depend on many factors, including, but not limited to:

● the scope, progress, costs and results of our ongoing and planned clinical trials of CT1812, as well as the associated costs, including any unforeseen costs we may incur as a result of preclinical study or clinical trial delays due to a pandemic, such as the COVID-19 pandemic or other diseases, macroeconomic conditions, global or political instability, such as the ongoing global and regional conflicts, inflation, or other delays ;

● the scope, progress, costs and results of our ongoing and planned clinical trials of zervimesine, as well as the associated costs, including any unforeseen costs we may incur as a result of preclinical study or clinical trial delays due to a pandemic, such as the COVID-19 pandemic or other diseases, macroeconomic conditions, global or political instability, such as the ongoing global and regional conflicts, inflation, or other delays ;

● the scope, progress, costs and results of preclinical development, laboratory testing and clinical trials for any future product candidates we may decide to pursue ;

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● the costs and timing of process development and manufacturing scale-up activities associated with our product candidates and other programs as we advance them through preclinical and clinical development;

● the availability, timing, and receipt of any future NIA grants;

● the availability, timing, and receipt of any future NIA grants, or any changes to our grants based on political or regulatory pressures;

● the number and development requirements of other product candidates that we may pursue;

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● the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;

● our ability to establish collaborations to commercialize CT1812 or any of our other product candidates outside the United States;

● our ability to establish collaborations to commercialize zervimesine or any of our other product candidates outside the United States;

● the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;

● our ability to maintain the listing of our common stock on the Nasdaq Global Market;

● the additional costs we may incur as a result of operating as a public company, including our efforts to enhance operational systems and hire additional personnel, including enhanced internal controls over financial reporting.

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

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the COVID-19 pandemic or other diseases, the ongoing global and regional conflicts, inflation, liquidity constraints, failures and instability in U.S.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the effects of the COVID-19 pandemic or other diseases, the ongoing global and regional conflicts, inflation, liquidity constraints, failures and instability in U.S.

and international financial banking systems, and otherwise.

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

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows used in operating activities

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Cash flows provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2024 was $20.1 million, which consisted primarily of a net loss of $26.1 million, offset primarily by the impact of equity-based compensation of $3.2 million and a net change of $2.4 million in operating assets and liabilities.

The net change in operating assets and liabilities was primarily due to an increase in grant receivables of $2.1 million, an increase in accounts payable and accrued expenses of $3.6 million, a decrease in prepaid expenses and other assets of $1.6 million, and a decrease in deferred grant income and other liabilities of $0.7 million.

Net cash used in operating activities for the nine months ended September 30, 2023 was $10.6 million, which consisted primarily of a net loss of $17.6 million, offset primarily by the impact of equity-based compensation of $3.3 million and a net change of $3.3 million in operating assets and liabilities.

The net change in operating assets and liabilities was primarily due to a decrease in grant receivables of $2.0 million, a decrease in prepaid expenses and other assets of $1.0 million, an increase in accounts payable and accrued expenses of $1.8 million, and a decrease in deferred grant income and other liabilities of $1.4 million.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2024 and 2023 was less than $0.1 million and $0.1 million, respectively.

Overall, the change in net cash used in investing activities was insignificant.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2024 and 2023 was $12.2 million and $2.1 million, respectively.

Net (decrease) increase in cash and cash equivalents

Cash used in operating activities

Net cash used in operating activities for the three months ended March 31, 2025 and 2024 was $9.9 million and $7.2 million, respectively.

The change in cash used in operating activities of $2.6 million was driven by an increase in operating assets and liabilities of $2.5 million, primarily due to an increase in grant receivables of $2.5 million, combined with decreases in non-cash adjustments of $0.8 million, primarily due to a decrease in equity-based compensation of $0.6 million, for the three months ended March 31, 2025.

Cash used in investing activities

During the three months ended March 31, 2025 and 2024, no cash was used in or provided by investing activities.

Cash provided by financing activities

Net cash provided by financing activities was $1.3 million and $12.0 million for the three months ended March 31, 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.

Contractual Obligations

The following table summarizes our contractual obligations as of September 30, 2024 (in thousands):

The following table summarizes our contractual obligations as of March 31, 2025 (in thousands):

Operating lease obligations

Other obligations

In October 2023, we entered into an insurance premium financing arrangement with a lender whereby we financed $0.7 million of certain premiums at a 8.65% annual interest rate.

Payments of less than $0.1 million are due monthly from October 2023 through September 2024.

As of September 30, 2024, there was no remaining outstanding principal on the loan.

In October 2024, we entered into an insurance premium financing arrangement with the same lender whereby we financed $0.4 million of certain premiums at a 8.65% annual interest rate.

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

Payments of less than $0.1 million are due monthly from November 2023 through October 2024.

As of December 31, 2024, there was no outstanding balance on the loan.

In October 2024, we entered into an insurance premium financing arrangement whereby we financed $0.4 million of certain premiums at a 8.65% annual interest rate.

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

As of March 31, 2025, the outstanding principal of the loan was $0.2 million.

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