Cognition Therapeutics Inc 10-Q for FY2026 Q1
Cognition Therapeutics Inc (CGTX)
About this 10-Q
Cognition Therapeutics Inc filed this 10-Q on May 8, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $4.57M
- compared with a net loss of $8.48M a year earlier
- Diluted EPS
- -$0.05
- compared with -$0.14 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification Number) |
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(Address of Principal Executive Offices) | (Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class | | Trading symbol | | Name of Exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of May 5, 2026, there were
TABLE OF CONTENTS
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| | Consolidated Balance Sheets as of March 31, 2026 (unaudited) and December 31, 2025 | | 5 |
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| | Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (unaudited) | | 8 |
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| Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 23 | |
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Cautionary Note on Forward-Looking Statements
This Quarterly Report on Form 10-Q (“Quarterly Report”), contains forward-looking statements concerning our business, operations and financial performance, as well as our plans, objectives and expectations for our business operations and financial performance and condition. All statements other than statements of historical or current facts included in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. In addition, statements including “we believe” or similar phrases reflect our beliefs and opinions on the relevant subject. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed in, or implied by these, forward-looking statements and therefore, you should not unduly rely on such statements. These risks and uncertainties include, but are not limited to:
| ● | our ability to raise additional capital to fund our operations and continue the development of our current and future product candidates; |
| ● | our ability to maintain the listing of our common stock on the Nasdaq Capital Market; |
| ● | our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; |
| ● | the clinical nature of our business and our ability to successfully and in a timely manner advance our current and future product candidates through our ongoing and future clinical trials, preclinical studies and development activities; |
| ● | the timing, scope and likelihood of regulatory filings and approvals, including final regulatory approval of our product candidates; |
| ● | our ability to generate revenue from future product sales and our ability to achieve and maintain profitability; |
| ● | the accuracy of our projections and estimates regarding our expenses, capital requirements, cash utilization, and need for additional financing; |
| ● | the expected uses of our existing cash, cash equivalents and restricted cash equivalents and the sufficiency of such resources to fund our planned operations; |
| ● | the extent to which health epidemics and other outbreaks of communicable diseases, geopolitical turmoil, including the ongoing global and regional conflicts or increased trade restrictions between the United States, Russia, China, and other countries, social unrest, political instability, terrorism, or other acts of war could ultimately impact our business, including our ongoing and future clinical trials, preclinical studies and development activities; |
| ● | our dependence on the success of zervimesine (CT1812), our lead product candidate; |
| ● | the novelty of our approach to targeting the σ-2 (sigma-2) receptor (“S2R”) complex to treat age-related degenerative diseases and disorders, and the challenges we will face due to the novel nature of such approach; |
| ● | the success of competing therapies that are or become available; |
| ● | the initiation, progress, success, cost, and timing of our ongoing and future clinical trials, preclinical studies and development activities; |
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| ● | our ability to obtain and maintain regulatory clearance of CT1812 for clinical trials under investigational new drug(“IND”), applications and any future IND applications for any of our other product candidates; |
| ● | the performance of third parties in connection with the development of our product candidates, including third parties conducting our future clinical trials as well as third-party suppliers and manufacturers; |
| ● | our ability to attract and retain strategic collaborators with development, regulatory, and commercialization expertise; |
| ● | our ability to successfully commercialize our product candidates and develop sales and marketing capabilities, if our product candidates are approved; |
| ● | the size and growth of the potential markets for our product candidates and our ability to serve those markets; |
| ● | regulatory developments and approval pathways in the United States and foreign countries for our product candidates; |
| ● | the potential scope and value of our intellectual property and proprietary rights; |
| ● | our ability, and the ability of any future licensors, to obtain, maintain, defend, and enforce intellectual property and proprietary rights protecting our product candidates, and our ability to develop and commercialize our product candidates without infringing, misappropriating, or otherwise violating the intellectual property or proprietary rights of third parties; |
| ● | risks associated with global political changes and global economic conditions, including inflation, tariffs, or uncertainty caused by political violence and unrest, including ongoing global and regional conflicts; |
| ● | developments relating to our competitors and our industry; and |
| ● | other risk and uncertainties, including those described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K (“Annual Report”) filed with the SEC on March 26, 2026. |
You should refer to the “Risk Factors” section of our Annual Report for the year ended December 31, 2025 for a discussion of material factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. We intend the forward-looking statements contained in this Quarterly Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Exchange Act, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
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PART I – FINANCIAL INFORMATION
Item 1.Financial Statements
COGNITION THERAPEUTICS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share amounts)
| | As of | ||||
| | March 31, 2026 | | December 31, 2025 | ||
| | (unaudited) | | | ||
Assets |
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Current assets: |
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Cash and cash equivalents | | $ | | | $ | |
Grant receivables | |
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Prepaid expenses and other current assets | |
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Restricted cash equivalents | | | | | | |
Total current assets | |
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Property and equipment, net | |
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Right-of-use assets, operating leases | | | | | | |
Total assets | | $ | | | $ | |
Liabilities and Stockholders’ Equity | |
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Current liabilities: | |
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Accounts payable | | $ | | | $ | |
Accrued expenses | |
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Deferred grant income, current | | | | | | |
Operating lease liabilities, current | | | | | | |
Other current liabilities | |
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Total current liabilities | |
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Operating lease liabilities, non-current | |
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Total liabilities | |
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Commitments and contingencies (Note 6) | |
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Stockholders’ equity: | |
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Preferred stock, $ | | | | | ||
Common stock, $ | |
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Additional paid-in capital | |
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Accumulated deficit | |
| ( | |
| ( |
Total stockholders’ equity | |
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Total liabilities and stockholders’ equity | | $ | | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
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COGNITION THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except share and per share amounts)
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| | Three Months Ended March 31, | | | ||||
| | 2026 | | 2025 | | | ||
Operating Expenses: |
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Research and development | | $ | | | $ | | | |
General and administrative | |
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Total operating expenses | |
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Loss from operations | |
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Other income (expense): | |
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Grant income | |
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Other income, net | |
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Interest expense | |
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Total other income, net | |
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Net loss and comprehensive loss | | $ | ( | | $ | ( | | |
Net loss per share: | | | | | | | | |
Basic | | $ | ( | | $ | ( | | |
Diluted | | $ | ( | | $ | ( | | |
Weighted-average common shares outstanding: | | | | | | | | |
Basic | | | | | | | | |
Diluted | | | | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
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COGNITION THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
(in thousands, except share amounts)
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| | | | | | | Additional | | | | | Total | ||
| | Common Stock | | Paid-in | | Accumulated | | Stockholders’ | ||||||
| | Shares | | Amount | | Capital | | Deficit | | Equity | ||||
Balances as of December 31, 2024 |
| | | $ | | | $ | | | $ | ( | | $ | |
Issuance of common stock under the 2022 ATM, net of commissions and allocated fees |
| | | | | | | | | | — | | | |
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes |
| | | | — | | | ( | | | — | | | ( |
Equity-based compensation | | — | | | — | | | | | | — | | | |
Net loss | | — | | | — | | | — | | | ( | | | ( |
Balances as of March 31, 2025 | | | | $ | | | $ | | | $ | ( | | $ | |
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| | | | | | | Additional | | | | | Total | ||
| | Common Stock | | Paid-in | | Accumulated | | Stockholders’ | ||||||
| | Shares | | Amount | | Capital | | Deficit | | Equity | ||||
Balances as of December 31, 2025 |
| | | $ | | | $ | | | $ | ( | | $ | |
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | | | | | — | | | ( | | | — | | | ( |
Exercise of common stock options | | | | | — | | | | | | — | | | |
Equity-based compensation | | — | | | — | | | | | | — | | | |
Net loss | | — | | | — | | | — | | | ( | | | ( |
Balances as of March 31, 2026 | | | | $ | | | $ | | | $ | ( | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
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COGNITION THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Cash flows from operating activities: |
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Net loss | | $ | ( | | $ | ( |
Adjustments to reconcile net loss to net cash used in operating activities: | |
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Depreciation and amortization | |
| | | | ( |
Equity-based compensation | |
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Amortization of right-of-use assets | | | | | | |
Realized loss on disposal of property and equipment | | | | | | — |
Changes in operating assets and liabilities: | |
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Grant receivables | |
| | | | ( |
Prepaid expenses and other assets | |
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Accounts payable and accrued expenses | |
| ( | | | ( |
Deferred grant income and other liabilities | | | ( | | | — |
Operating lease liabilities | |
| ( | | | ( |
Net cash used in operating activities | |
| ( | |
| ( |
Cash flows from investing activities: | |
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Payments for property and equipment | |
| — | | | — |
Net cash used in investing activities | |
| — | |
| — |
Cash flows from financing activities: | |
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Proceeds from issuance of common stock under the 2022 ATM, net of commissions and allocated fees | | | — | | | |
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 (used) by financing activities | |
| ( | |
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Net decrease in cash, cash equivalents and restricted cash equivalents | |
| ( | |
| ( |
Cash, cash equivalents, and restricted cash equivalents | | | | | | |
Cash, cash equivalents, and restricted cash equivalents – beginning of period | |
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Cash, cash equivalents, and restricted cash equivalents – end of period | | $ | | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
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Cognition Therapeutics, Inc.
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts)
1. Description of Business and Financial Condition
Cognition Therapeutics, Inc. (the “Company”) was incorporated as a Delaware corporation on August 21, 2007. The Company is a biopharmaceutical company developing disease modifying therapies targeting age-related degenerative diseases and disorders of the central nervous system (“CNS”) and retina. The Company’s pipeline candidates were discovered using proprietary biology and chemistry platforms designed to identify novel drug targets and disease-modifying therapies that address dysregulated pathways specifically associated with neurodegenerative diseases. 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 December 23, 2022, the Company filed a Registration Statement on Form S-3 (File No. 333-268992) (the “Shelf”) with the Securities and Exchange Commission (“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 $
On March 10, 2023, the Company entered into a purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) for an equity line financing (the “Purchase Agreement”). The Purchase Agreement provides that, subject to the terms and conditions set forth therein, the Company has the right, but not the obligation, to direct Lincoln Park to purchase up to $
In August 2025, the Company entered into Securities Purchase Agreements with
On December 18, 2025, the Company filed a shelf registration statement with the SEC and a prospectus supplement, which registered the offering, issuance and sale of up to $
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Liquidity
The Company’s Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. The Company has incurred recurring losses since inception, including net losses of $
As of May 8, 2026, the date of issuance of these Consolidated Financial Statements, the Company believes that its cash and cash equivalents as of March 31, 2026 is sufficient to fund operations for the period through one year after the date of this filing.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements as of March 31, 2026, and for the three months ended March 31, 2026 and 2025, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“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. Accordingly, they do not include all of the information and footnotes required by U.S. 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 March 31, 2026, the statements of operations and comprehensive loss and stockholders’ equity for the three months ended March 31, 2026 and 2025, and cash flows for the three months ended March 31, 2026 and 2025. Such adjustments are of a normal and recurring nature. The results for the three months ended March 31, 2026 are not necessarily indicative of the results for the year ending December 31, 2026, 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, 2025, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 26, 2026.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of interest-bearing deposits at various financial institutions and money markets. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Grant Receivables
Grant receivables relate to outstanding amounts due for reimbursable expenditures of awarded grants issued by the National Institute of Aging (“NIA”), a division of the National Institute of Health (“NIH”), and are carried at their estimated collectible amounts. The Company expects all receivables to be collectible, and accordingly, there is
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Grant Income
The Company generates grant income through grants from government and other (non-government) organizations. Grant income is recognized in other income (expense) in the period in which the reimbursable research and development services are incurred and the right to payment is realized. 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 months ended March 31, 2026 and 2025, the Company generated grant income of $
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. These grants are cost plus fixed fee arrangements in which the Company is reimbursed for its 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. While these NIH grants do not contain payback provisions, the NIH or other government agency may review the Company’s performance, cost structures and compliance with applicable laws, regulations, policies and standards and the terms and conditions of the applicable NIH grant. If any of the expenditures are found to be unallowable or allocated improperly or if the Company has otherwise violated terms of such NIH grant, the expenditures may not be reimbursed and/or the Company may be required to repay funds already disbursed. To date, the Company has not been found to have breached the terms of any NIH grant. As of March 31, 2026, the Company has been awarded grants with project periods that extend through May 31, 2027, subject to extension.
Research and Development Costs
The Company is involved in research and development of treatments for a variety of diseases related to the central nervous system, with a focus on Alzheimer’s disease, dementia with Lewy bodies, and geographic atrophy (“GA”) secondary to dry age-related macular degeneration. 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 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. Costs for external development activities are recognized based on an evaluation of the progress to completion of specific tasks. Costs for certain research and development activities are recognized based on the pattern of performance of the individual arrangements, which may differ from the pattern of billings incurred, and are reflected in the consolidated financial statements as prepaid expenses or as accrued research and development expenses.
Equity-based Compensation
Following the provisions of ASC 718, Compensation — Stock Compensation, the Company recognizes compensation expense for equity-based grants using the straight-line attribution method, in which the expense is recognized ratably over the requisite service period within operating expenses based on the grant date fair value. The Company also has granted awards subject to performance-based vesting. 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.
Black-Scholes requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. Due to a lack of sufficient public market data for the Company’s common stock and lack of company-specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company, including stage of product development and life science industry focus. The historical volatility is calculated based on a period of time commensurate with expected term
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assumption. The Company uses the simplified method to calculate the expected term for stock options granted to employees whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the stock options due to its lack of sufficient historical data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be
Concentration of Credit Risk
The Company’s financial instruments that are exposed to credit risks consist of cash and cash equivalents. The Company maintains its cash and cash equivalents in bank deposit accounts which, at times, may exceed the federally insured limit. The Company has not experienced any losses in these accounts and does not believe it is exposed to any significant credit risk related to these funds.
Fair Value of Financial Instruments
The Company applies ASC 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.
The carrying value of the Company’s cash and cash equivalents, grants receivable, prepaid expense, other receivables, other assets, accounts payable, accrued expenses and other liabilities approximate fair value because of the short-term maturity of these financial instruments.
The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below:
| ● | Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. |
| ● | Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. |
| ● | Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. |
Warrant Accounting
Warrants are accounted for either as equity or liabilities based upon the characteristics and provisions of each instrument in accordance with ASC 815, Derivatives and Hedging, and ASC 480, Distinguishing Liabilities from Equity. Warrants classified as equity are recorded at fair value as of the date of issuance on the consolidated balance sheets and no further adjustments to their valuation are made. Warrants classified as liabilities and other financing instruments that require accounting as liabilities are recorded on the consolidated balance sheets at their fair value on the date of issuance and are revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes
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in the fair value between reporting periods recorded as other income or expense. Management estimates the fair value of these liabilities using the Black-Scholes model and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions, expected volatility, expected life, yield, and risk-free interest rate.
Net Loss Per Share
Basic net loss per share is computed by dividing the net loss per share by the weighted-average number of shares of common stock outstanding during each period. Diluted net loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock and stock options, which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive.
Segments
The Company has determined that it operates and manages
Emerging Growth Company Status
The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (a) no longer an emerging growth company or (b) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
Recent Accounting Pronouncements
Adopted
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 Company adopted this ASU retrospectively for the annual period beginning January 1, 2025.
Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public business entities to provide more detailed information in the notes to the financial statements about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations and comprehensive loss. The guidance is effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the
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consolidated financial statements. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements and disclosures.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) (“ASU 2025-07”), to clarify the application of derivative accounting to contracts with features based on the operations or activities of one of the parties to the contract and the diversity in accounting for share-based noncash consideration from a customer that is consideration for the transfer of goods or services. ASU 2025-07 is effective for the fiscal year beginning after December 15, 2026, and interim periods within those annual reporting periods. The Company is currently evaluating ASU 2025-07 to determine its impact on the Company’s consolidated financial statements and disclosures.
In December 2025, the FASB issued ASU 2025-10, Government Grants under ASC 832 (“ASU 2025-10”), which establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants. Under ASU 2025-10, government grants are recognized when it is probable that the entity will both comply with the conditions of the grant and the grant will be received. The ASU provides specific accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis. The ASU also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-10 on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”), which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11 on its consolidated financial statements and related disclosures.
Income Taxes
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 March 31, 2026 and December 31, 2025, 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, 2026 and December 31, 2025, the Company had
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3. Financial Instruments and Fair Value Measurements
Financial assets and liabilities measured at fair value are summarized below:
| | As of March 31, 2026 | ||||||||||
| | | | | | | | Significant | | | | |
| | Quoted Priced in | | Significant Other | | Unobservable | | | | |||
| | Active Markets | | Observable Inputs | | Inputs | | | | |||
| | (Level 1) | | (Level 2) | | (Level 3) | | Total | ||||
Assets: |
| | |
| | |
| | |
| | |
Cash equivalents: | | | | | | | | | | | | |
Money market funds | | $ | | | $ | — | | $ | — | | $ | |
Restricted cash equivalents: | | | | | | | | | | | | |
Money market funds | | | | | | — | | | — | | | |
Total assets | | $ | | | $ | — | | $ | — | | $ | |
| | As of December 31, 2025 | ||||||||||
| | | | | | | | Significant | | | | |
| | Quoted Priced in | | Significant Other | | Unobservable | | | | |||
| | Active Markets | | Observable Inputs | | Inputs | | | | |||
| | (Level 1) | | (Level 2) | | (Level 3) | | Total | ||||
Assets: |
| | |
| | |
| | |
| | |
Cash equivalents: | | | | | | | | | | | | |
Money market funds | | $ | | | $ | — | | $ | — | | $ | |
Restricted cash equivalents: | | | | | | | | | | | | |
Money market funds | | | | | | — | | | — | | | |
Total assets | | $ | | | $ | — | | $ | — | | $ | |
4. Accrued Expenses
Accrued expense consists of the following:
| | As of | | ||||
| | March 31, 2026 | | December 31, 2025 | | ||
Employee compensation, benefits, and related accruals | | $ | | | $ | | |
Research and development costs | |
| | |
| | |
Professional fees and other accruals | |
| | |
| | |
Total | | $ | | | $ | | |
5. Other Current Liabilities
In October 2024, the Company entered into an insurance premium financing agreement with a lender. Under the agreement, the Company financed $
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In October 2025, the Company entered into an insurance premium financing agreement with a lender. Under the agreement, the Company financed $
6. Commitments and Contingencies
Operating Leases
Amounts reported in the consolidated balance sheets for leases where the Company is the lessee as of March 31, 2026 were as follows, in thousands:
| As of | ||||
| March 31, 2026 | | December 31, 2025 | ||
Assets |
| | |
| |
Operating lease assets | $ | | | $ | |
Total operating lease assets | $ | | | $ | |
Liabilities | | | | | |
Current: | | | | | |
Operating lease liabilities | $ | | | $ | |
Non-current: | | | | | |
Operating lease liabilities, non-current | | | | | |
Total operating lease liabilities | $ | | | $ | |
Operating lease costs for the three months ended March 31, 2026 and 2025 was $
The maturities of the operating lease liabilities and minimum lease payments as of March 31, 2026 were as follows:
For the Years Ended December 31, | | Operating Leases | |
2026 (remaining) | | $ | |
2027 | |
| |
2028 | |
| |
2029 | | | |
2030 | | | — |
Thereafter | | | — |
Total undiscounted lease payments | | $ | |
Less: Imputed interest | | | ( |
Present value of operating lease liabilities | | $ | |
The following table summarizes the lease term and discount rate as of March 31, 2026:
| As of | ||
| March 31, 2026 | | December 31, 2025 |
Weighted-average remaining lease term (years) | | | |
Operating leases | | ||
Weighted-average discount rate | | | |
Operating leases | | ||
Operating cash flows used for operating leases for the three months ended March 31, 2026 and 2025 was $
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Litigation and Contingencies
From time to time, the Company may be involved in disputes or regulatory inquiries that arise in the ordinary course of business. 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 March 31, 2026 and December 31, 2025, there was no litigation or contingency with at least a reasonable possibility of a material loss.
7. Stockholders’ Equity
Common and Preferred Stock
The Company is authorized to issue up to
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 March 31, 2026,
2022 ATM
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 $
2025 ATM
On December 18, 2025, the Company filed a shelf registration statement with the SEC and a prospectus supplement, which registered the offering, issuance and sale of up to $
Lincoln Park Purchase Agreement
On March 10, 2023, the Company entered into a purchase agreement with Lincoln Park for an equity line financing. The Purchase Agreement provides that, subject to the terms and conditions set forth therein, the Company has the right, but not the obligation, to direct Lincoln Park to purchase up to $
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August 2025 Registered Direct Offering and Warrant Issuance
In August 2025, the Company entered into Securities Purchase Agreements with
In connection with the Placement Agency Agreement, the Company agreed to pay Titan an aggregate cash fee of
As of March 31, 2026, the Company had the following equity-classified common stock warrants outstanding:
| | | | | | Weighted-Average | |
| | | | | | Remaining | |
| | Number of | | Weighted-Average | | Contractual Life | |
| | Warrants | | Exercise Price | | (In Years) | |
Balance, December 31, 2025 |
| | | $ | | | |
Issued |
| — | | $ | — | | — |
Exercised |
| — | | $ | — | | — |
Expired |
| — | | $ | — | | — |
Balance, March 31, 2026 |
| | | $ | | | |
Exercisable as of March 31, 2026 |
| | | $ | | | |
8. Equity-based Compensation
2021 Equity Incentive Plan
On October 7, 2021, the date upon which the Company’s Registration Statement on Form S-1 in connection with the IPO was declared effective, the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) became effective. On the same date, the Company ceased granting awards under its 2017 Equity Incentive Plan (the “2017 Plan”). The 2021 Plan authorizes the award of both equity-based and cash-based incentive awards, including: (i) stock options (both incentive stock options and nonqualified stock options), (ii) stock appreciation rights, (iii) restricted stock awards, (iv) restricted stock units (“RSUs”), and (v) cash or other stock-based awards. Incentive stock options may be granted only to employees. All other types of awards may be issued to employees, directors, consultants, and other service providers.
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As of March 31, 2026, the aggregate number of shares of common stock of the Company that may be issued under the 2021 Plan is
2017 Equity Incentive Plan
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. Upon the effectiveness of the 2021 Plan, no further awards will be granted under the 2017 Plan.
The aggregate number of shares of common stock of the Company that may be issued under the 2017 Plan is
Employee Stock Purchase Plan
The Company’s board of directors approved the Employee Stock Purchase Plan (the “ESPP”) prior to the closing of the IPO. 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 March 31, 2026, a total of
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)
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Stock Options
The Company estimates the fair value of options granted on the date of grant using the Black-Scholes option pricing model.
Expected Term — The expected term represents the period that the stock-based awards are expected to be outstanding. As the Company does not have sufficient historical experience for determining the expected term of the stock option awards granted, expected term has been calculated using the simplified method.
Risk-Free Interest Rate — The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant for zero-coupon U.S. Treasury constant maturity notes with terms approximately equal to the stock-based awards’ expected term.
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. 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.
Dividend Yield — The expected dividend yield is
During the three months ending March 31, 2026 and 2025, there were
Activity for options was as follows:
| | Options Outstanding | ||||||||
| | | | | | | | Weighted-Average | ||
| | | | | | Aggregate | | Remaining | ||
| | Number of | | Weighted-Average | | Intrinsic Value | | Contractual Life | ||
| | Options | | Exercise Price | | (in 000’s) | | (In Years) | ||
Balance, December 31, 2025 |
| | | $ | |
| $ | | | |
Options granted |
| — | | $ | — | | | | | |
Options exercised |
| ( | | $ | | | | | | |
Options forfeited |
| — | | $ | — | | | | | |
Options expired |
| — | | $ | — | | | | | |
Balance, March 31, 2026 |
| | | $ | | | $ | — | | |
Exercisable as of March 31, 2026 |
| | | $ | | | $ | — | | |
Restricted Stock Units
The fair values of RSUs are based on the fair market value of the Company’s common stock on the date of grant. Each RSU represents a contingent right to receive
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During the three months ended March 31, 2026 and 2025, the Company granted
The following table summarizes the Company’s RSU activity for the three months ended March 31, 2026:
| | Number of | | Weighted-Average | |
| | Restricted Stock Units | | Grant Date Fair Value | |
Outstanding at December 31, 2025 | | | | $ | |
Granted | | | | $ | |
Vested | | ( | | $ | |
Forfeited | | — | | $ | — |
Outstanding at March 31, 2026 | | | | $ | |
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 March 31, | |
| ||||
| | 2026 | | 2025 | |
| ||
Research and development | | $ | | | $ | | | |
General and administrative | |
| | |
| | | |
Total equity-based compensation | | $ | | | $ | | | |
As of March 31, 2026, total future compensation expense related to unvested time-based awards yet to be recognized by the Company was $
9. 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:
| | Three Months Ended March 31, | ||
| | 2026 | | 2025 |
Options issued and outstanding |
| |
| |
Restricted stock units issued and outstanding | | | | |
Warrants issued and outstanding | | | | — |
Total |
| |
| |
10. Segment Reporting
Operating segments are defined as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker (CODM), or decision-making group, in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business in
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The CEO manages and allocates resources to the operations of the Company on a consolidated basis. Managing and allocating resources on a consolidated basis enables the CEO to assess the overall level of resources available and how to best deploy these resources across functions and research and development projects that are in line with the Company’s strategic goals. Consistent with this decision-making process, the CEO uses consolidated financial information for purposes of evaluating performance, cash forecasting, allocating resources and setting incentive targets. The CEO bases this assessment on the Company’s consolidated net loss. The measure of segment assets is reported on the consolidated balance sheets as total assets.
The table below is a summary of the segment loss, including significant segment expenses (in thousands):
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Grant income | | $ | | | $ | |
Less: | |
| | |
| |
Clinical programs | | | | | | |
R&D Personnel costs(1) | | | | | | |
Preclinical programs | | | | | | |
Manufacturing | | | | | | |
Other research and development expenses | | | | | | |
General and administrative expenses(2) | | | | | | |
Equity-based compensation | | | | | | |
Other segment items(3) | |
| ( | |
| ( |
Segment and consolidated net loss | | $ | ( | | $ | ( |
(1) R&D Personnel costs exclude equity-based compensation
(2) General and administrative expenses exclude equity-based compensation
(3)
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Item 2.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. 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. Our actual results may differ materially from those discussed below. Please see “Special Note Regarding Forward-Looking Statements” and “Risk Factors” included in Part I, Item 1A of our Annual Report for factors that could cause or contribute to such differences.
Overview
We are a clinical-stage biopharmaceutical company engaged in the discovery and development of innovative, small molecule therapeutics targeting age-related degenerative diseases and disorders of the central nervous system (“CNS”). Currently available therapies for these diseases are limited, with few Alzheimer’s disease (“AD”) treatments, and no approved treatments for dementia with Lewy bodies (“DLB”). Our goal is to develop disease-modifying treatments for participants with these degenerative disorders.
Our lead product candidate, zervimesine, also known as CT1812, is an orally delivered, small molecule designed to protect neuronal synapses by preventing the binding of oligomers of pathogenic proteins including β-amyloid, or Aβ and ɑ-synuclein. These and similar protein oligomers have been linked to the progression of degenerative diseases such as AD, and DLB.
The United States Adopted Name (USAN) Council adopted zervimesine as the USAN for CT1812 in December 2024.
Enrollment concluded in December 2025 in the Phase 2 COG0203 (START) study of zervimesine in 545 patients with mild cognitive impairment (MCI) and early stage AD. Topline results are expected after all participants have completed 18 months of treatment. START has been funded by a grant of approximately $81 million awarded by the National Institute of Aging (“NIA”), a division of the National Institutes of Health (“NIH”). We are conducting the START clinical trial in collaboration with the Alzheimer’s Clinical Trial Consortium (“ACTC”), an NIA-funded clinical trials network designed to accelerate studies for therapeutics for AD and related dementias.
The randomized, double-blind, placebo-controlled Phase 2 COG0201 (SHINE) trial enrolled 153 adults with mild-to-moderate Alzheimer’s disease and met its primary endpoints of safety and tolerability. SHINE was funded by a grant of approximately $30.5 million awarded by the NIA. A prespecified analysis found that 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 reflects total brain amyloid and tau pathology.
In July 2025, we conducted an end-of-Phase 2 meeting with the FDA to review results of the SHINE study and discuss proposed plans for a Phase 3 program designed to support regulatory approval of zervimesine in this patient population. 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. The Phase 3 study population would be enriched with AD patients who have lower plasma p-tau217 at screening. Cognition has received and is reviewing scientific advice from the European Medicines Agency (“EMA”) indicating a preference for a longer trial than was proposed.
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The randomized, double-blind, placebo-controlled Phase 2 COG1201 (SHIMMER) study enrolled 130 adults with DLB and met its primary endpoint of safety and tolerability. SHIMMER was funded by a grant of approximately $30 million awarded by the NIA. 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. 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.
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.
The above Overview covers only the most recently concluded studies in each indication. The following table highlights findings from these and subsequent studies:
Indication | | Study Identifier | | NCT Number | | Clinical Phase | | Status | | Key Findings |
Alzheimer’s Disease (AD) | ||||||||||
MCI-early | | COG0203 (START) | | NCT05531656 | | Phase 2 | | ongoing | | 545 participants with MCI or early AD. This study has completed enrollment. |
mild-moderate | | COG0201 (SHINE) | | NCT03507790 | | Phase 2 | | complete | | Participants treated with zervimesine experienced a cognitive benefit compared to placebo |
mild-moderate | | COG0202 (SEQUEL) | | NCT04735536 | | Phase 2 | | complete | | Participants treated with zervimesine exhibited improvement across prespecified EEG parameters |
mild-moderate | | COG0105 (SPARC) | | NCT03493282 | | Phase 1 | | complete | | Treatment with zervimesine was assessed using various imaging modalities, including PET imaging and volumetric MRI (vMRI) |
mild-moderate | | COG0104 (SNAP) | | NCT03522129 | | Phase 1 | | complete | | 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) | | NCT05225415 | | Phase 2 | | complete | | Participants treated with zervimesine experienced benefits across behavioral, functional, cognitive and motor scales |
mild-moderate | | COG1202 (EAP) | | NCT06961760 | | n/a | | ongoing | | 32 participants with DLB. Currently, fully enrolled. |
Geographic Atrophy Secondary to Dry AMD | ||||||||||
GA | | COG2201 (MAGNIFY) | | NCT05893537 | | Phase 2 | | concluded | | Participants treated with zervimesine experienced slower growth of their GA lesions over the course of the study |
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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.
On August 29, 2025, we completed our registered direct offering, pursuant to which we issued and sold 14,700,000 shares of our common stock at an offering price of $2.05 per share. We received net proceeds of approximately $27.9 million, after deducting underwriting discounts, commissions, placement agent fees, and other offering related expenses payable by us. In connection with the registered direct offering, we agreed to pay the placement agent an aggregate cash fee of 7.0% of the gross proceeds raised from the sale and issuance of the shares of common stock minus certain expenses. We agreed to issue warrants to the placement agent to purchase up to 514,500 shares of common stock which have an exercisable price equal to $2.78 and will be exercisable commencing six months from the close of the registered direct offering with a term of five (5) years from the date of the Placement Agency Agreement.
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.
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. We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. In addition, if we obtain regulatory approval for our product candidates and do not enter into a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing and distribution activities.
As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings, debt financings or other sources, such as potential collaboration agreements and strategic alliances, licensing or similar arrangements with third parties.
Because of the numerous risks and uncertainties associated with product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to raise capital, maintain our research and development efforts, expand our business or continue our operations at planned levels, and as a result we may be forced to substantially reduce or terminate our operations.
We do not own or operate manufacturing facilities. 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. 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 zervimesine.
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Components of Our Results of Operations
Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of direct and indirect costs incurred for our research activities, including development of our drug discovery efforts and the development of our product candidates. Direct costs include laboratory materials and supplies, contracted research and manufacturing, clinical trial costs, consulting fees, and other expenses incurred to sustain our research and development program. Indirect costs include personnel-related expenses, consisting of employee salaries, related benefits, and stock-based compensation expense for employees engaged in research and development activities, facilities, and other expenses consisting of direct and allocated expenses for rent and depreciation, and lab consumables.
We expense research and development costs as incurred. 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. We track direct costs by stage of program, clinical or preclinical. However, we do not track indirect costs on a program specific basis because these costs are deployed across multiple programs and, as such, are not separately classified.
We cannot reasonably determine the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates. Product candidates in later stages of development generally have higher development costs than those in earlier stages. We expect that our research and development expenses will increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, as our product candidates advance into later stages of development, as we begin to conduct larger clinical trials, as we seek regulatory approvals for any product candidates that successfully complete clinical trials, as we expand our product pipeline, as we maintain, expand, protect and enforce our intellectual property portfolio, and as we incur expenses associated with hiring additional personnel to support our research and development efforts.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related costs, including employee salaries, related benefits, and stock-based compensation expense for our employees in the executive, finance and accounting, and other administrative functions. General and administrative expenses also include third-party costs such as legal costs, insurance costs, accounting, auditing and tax related fees, consulting fees and facilities and other expenses not otherwise included as research and development expenses. 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
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 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
26
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.
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 for the three months ended March 31, 2026 and 2025 consisted 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
The following table summarizes our results of operations (in thousands):
| | Three Months Ended March 31, | | | | ||||
| | 2026 | | 2025 | | Change | |||
Operating Expenses: |
| | |
| | |
| | |
Research and development | | $ | 6,120 | | $ | 10,786 | | $ | (4,666) |
General and administrative | |
| 2,697 | |
| 2,989 | |
| (292) |
Total operating expenses | |
| 8,817 | |
| 13,775 | |
| (4,958) |
Loss from operations | |
| (8,817) | |
| (13,775) | |
| 4,958 |
Other income (expense): | |
| | |
| | |
| |
Grant income | |
| 3,979 | |
| 5,086 | |
| (1,107) |
Other income, net | |
| 273 | |
| 214 | |
| 59 |
Interest expense | | | (5) | | | (5) | | | — |
Total other income, net | |
| 4,247 | |
| 5,295 | |
| (1,048) |
Net loss | | $ | (4,570) | | $ | (8,480) | | $ | 3,910 |
Research and Development Expenses
The following table summarizes our research and development expenses (in thousands):
| | Three Months Ended March 31, | | | | ||||
| | 2026 | | 2025 | | Change | |||
Clinical programs | | $ | 3,381 | | $ | 6,877 | | $ | (3,496) |
Personnel |
| | 1,732 |
| | 3,102 |
| | (1,370) |
Manufacturing |
| | 337 |
| | 637 |
| | (300) |
Preclinical programs |
| | 619 |
| | 85 |
| | 534 |
Other expense |
| | 51 |
| | 85 |
| | (34) |
Total research & development expenses | | $ | 6,120 | | $ | 10,786 | | $ | (4,666) |
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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:
| ● | a decrease of $3.5 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 $0.3 million in manufacturing related to lower costs with contract manufacturing organizations for the replenishment of clinical trial supply; and |
| ● | an increase of $0.5 million in preclinical programs and other expenses primarily due to an increase in non-clinical 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.
Other Income (Expense)
Grant Income
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. 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.
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. 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 not significant in either period.
Liquidity and Capital Resources
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. 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 $175.2 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. On December 23, 2022, we entered into a sales agreement with B. Riley, 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 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
28
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.
On August 29, 2025, we completed the registered direct offering of 14,700,000 shares of our common stock at an offering price of $2.05 per share. As part of the registered direct offering, we agreed to issue warrants to the placement agent to purchase up to 514,500 shares of common stock which have an exercise price equal to $2.78. The net proceeds were approximately $27.9 million, after deducting underwriting discounts, commissions, placement agent fees, and other offering related expenses payable by us. 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. 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.
Future Funding Requirements
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. 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 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; |
| ● | the extent to which we develop, in-license or acquire other product candidates and technologies; |
| ● | 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, 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; |
| ● | the costs, timing and outcome of regulatory review of our product candidates; |
29
| ● | the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; |
| ● | 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 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; and |
| ● | 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. |
Until such time as we can generate significant revenue from product sales, we expect to finance our operations through a combination of public or private equity offerings, debt financings or other sources, such as potential collaboration agreements and strategic alliances, licensing or similar arrangements with third parties. 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. 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.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. Adequate funding may not be available when needed or on terms acceptable to us, or at all. 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 ongoing global and regional conflicts, inflation, tariffs, liquidity constraints, failures and instability in U.S. and international financial banking systems, and otherwise. If we fail to obtain necessary capital when needed on acceptable terms, or at all, it could force us to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations. Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. We cannot assure you that we will ever be profitable or generate positive cash flows from operating activities.
Cash Flows
The following table summarizes our cash flows for the periods indicated (in thousands):
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Cash flows used in operating activities | | $ | (5,542) | | $ | (9,877) |
Cash flows used in investing activities | |
| — | |
| — |
Cash flows provided (used) by financing activities | |
| (233) | |
| 1,296 |
Net decrease in cash, cash equivalents, and restricted cash equivalents | | $ | (5,775) | | $ | (8,581) |
30
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.
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.
Contractual Obligations
The following table summarizes our contractual obligations as of March 31, 2026 (in thousands):
| | Less than | | 1 to 3 | | 3 to 5 | | More than 5 | | | | ||||
| | 1 Year | | Years | | Years | | years | | Total | |||||
Operating lease obligations | | $ | 112 | | $ | 176 | | $ | 15 | | $ | — | | $ | 303 |
Other obligations | | | 194 | | | — | | | — | | | — | | | 194 |
Total: | | $ | 306 | | $ | 176 | | $ | 15 | | $ | — | | $ | 497 |
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, 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. The amounts reflected in the table above consist of the future minimum lease payments under the non-cancelable lease arrangements.
On August 31, 2022, we entered into an agreement to lease 2,980 square feet of office space in Pittsburgh, Pennsylvania. The lease has a term of 45 months and commenced on October 1, 2022. The annual base rent under the lease is less than $0.1 million throughout the term of the lease. Total payments due over the term of the lease are $0.2 million. Additionally, on August 31, 2022, we modified one of our existing lease agreements with the landlord for approximately 3,706 square feet of lab space at the same location to extend the lease term termination date from June 30, 2023 until June 30, 2026. 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 July 1, 2021, we entered into an agreement to lease 2,864 square feet of office space in Purchase, New York. The lease has a term of 89 months and commenced on December 9, 2021. The annual base rent under the lease is less than $0.1 million for the first lease year and is subject to annual increases of between 1.82% and 2.04%. 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.
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. These contracts typically do not contain minimum purchase commitments and generally provide for termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations.
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Critical Accounting Policies and Use of Estimates
The Critical Accounting Policies and Significant Judgements and Estimates included in our Annual Report on Form 10-K have not materially changed. See “Critical Accounting Policies and Use of Estimates” included in Part II, Item 7 of our Annual Report on Form 10-K filed with the SEC on March 26, 2026.
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.
Emerging Growth Company Status
We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
We will remain an emerging growth company until the earliest to occur of: (1) the last day of the fiscal year in which we have at least $1.235 billion in annual revenue; (2) the last day of the fiscal year in which we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year; (3) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period; and (4) the last day of the fiscal year ending after the fifth anniversary of our IPO.
Item 3.Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company,” as that term is defined in Rule 229.10(f)(1), we are not required to provide the information required by this Item.
Item 4.Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our President and Chief Executive Officer and our Chief Financial Officer have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on this evaluation, our President and Chief Executive Officer and our Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our President and Chief Executive Officer and our Chief Financial Officer, to allow for timely decisions regarding required disclosures, and recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Management’s Report on Internal Controls over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting. Management has used the
32
framework set forth in the report entitled “Internal Control—Integrated Framework (2013)” published by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of our internal control over financial reporting. Based on its evaluation, management has concluded that our internal control over financial reporting was effective as of March 31, 2026.
Changes in Internal Control
There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our President and Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met and cannot detect all deviations. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or deviations, if any, within the company have been detected. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
33
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not aware of any pending legal actions that would, if determined adversely to us, have a material adverse effect on our business and operations.
We may, from time to time, become involved in disputes and proceedings arising in the ordinary course of business. In addition, as a public company, we are also potentially susceptible to litigation, such as claims asserting violations of securities laws. Any such claims, with or without merit, if not resolved, could be time-consuming and result in costly litigation. There can be no assurance that an adverse result in any future proceeding would not have a potentially material adverse effect on our business, results of operations, and financial condition.
Item 1A. Risk Factors
You should carefully consider the risk factors described in our Annual Report under the caption “Item 1A. “Risk Factors.” The risks described in our Annual Report are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
There were no unregistered sales of our equity securities during the fiscal quarter ended March 31, 2026.
Repurchase of Shares of Company Equity Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
None.
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Item 6. Exhibits
Exhibit |
|
|
| Incorporated by Reference |
| Filed | ||||||
Number |
| Exhibit Description |
| Form |
| File No. |
| Exhibit |
| Filing Date |
| Herewith |
3.1 | | Third Amended and Restated Certificate of Incorporation of Cognition Therapeutics, Inc. | | 8-K | | 001-40886 | | 3.1 | | 10/14/2021 | | |
3.2 | | Second Amended and Restated Bylaws of Cognition Therapeutics, Inc. | | 10-Q | | 001-40886 | | 3.1 | | 05/04/2023 | | |
3.3 | | Amendment to the Second Amended and Restated Bylaws of Cognition Therapeutics, Inc. | | 10-K | | 001-40886 | | 3.3 | | 03/20/2025 | | |
10.1 | | | | | | | | | | | X | |
31.1 |
|
|
|
|
|
|
|
|
|
| X | |
31.2 |
|
|
|
|
|
|
|
|
|
| X | |
32.1* |
|
|
|
|
|
|
|
|
|
| X | |
32.2* |
|
|
|
|
|
|
|
|
|
| X | |
101.INS |
| Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
|
|
|
|
|
| X |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
|
|
|
|
|
|
|
|
| X |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
|
|
|
|
|
| X |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
|
|
|
|
|
| X |
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
|
|
|
|
|
| X |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
|
|
|
|
|
| X |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101). | | | | | | | | | | X |
* This certification is being furnished solely to accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing of the registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
35
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Cognition Therapeutics, Inc. | |
|
|
|
Date: May 8, 2026 | By: | /s/ Lisa Ricciardi |
|
| Lisa Ricciardi |
|
| Chief Executive Officer, President and Director |
|
|
|
|
|
|
Date: May 8, 2026 | By: | /s/ John Doyle |
|
| John Doyle |
|
| Chief Financial Officer |
36
Exhibit 10.1
LAB LEASE AGREEMENT
between
RJ EQUITIES LP
(Landlord)
and
COGNITITION THERAPEUTICS, INC.
(Tenant)
Dated: January 20th, 2015
TABLE OF CONTENTS
ARTICLEI. BASIC TERMS | 1 |
| |
ARTICLE 2. PREMISES | 2 |
| |
ARTICLE 3. TERM AND COMMENCEMENT | 2 |
| |
ARTICLE 4. CONSTRUCTION OF PREMISES | 4 |
| |
ARTICLE 5. BASE RENT | 4 |
| |
ARTICLE 6. RENT ESCALATION | 5 |
| |
ARTICLE 7. LATE PAYMENT | 9 |
| |
ARTICLE 8. USE OF PREMISES | 9 |
| |
ARTICLE 9. COMMON AREAS/PARKING | 10 |
| |
ARTICLE 10. ALTERATIONS | 10 |
| |
ARTICLE 11. MECHANIC’S LIENS | 11 |
| |
ARTICLE 12. CONDITION OF PREMISES | 11 |
| |
ARTICLE 13. UTILITIES AND SERVICES | 11 |
| |
ARTICLE 14. ASSIGNMENT AND SUBLETTING | 13 |
| |
ARTICLE 15. RIGHTS RESERVED BY LANDLORD | 13 |
| |
ARTICLE 16. REPAIRS | 14 |
| |
ARTICLE 17. INDEMNIFICATION AND INSURANCE | 15 |
| |
ARTICLE 18. LANDLORD'S LIABILITY | 16 |
| |
ARTICLE 19. COMPLIANCE WITH INSURANCE REQUIREMENTS | 17 |
| |
ARTICLE 20. FIRE OR OTHER CASUALTY | 17 |
| |
ARTICLE 21. SUBORDINATION | 18 |
| |
ARTICLE 22. CONDEMNATION | 18 |
| |
ARTICLE 23. ESTOPPEL CERTIFICATES | 19 |
| |
ARTICLE 24. DEFAULT | 19 |
| |
ARTICLE 25. PROVISIONS RELATED TO LANDLORD'S REMEDIES | 20 |
| |
ARTICLE 26. LANDLORD'S DEFAULT; RIGHT TO CURE | 22 |
| |
ARTICLE 27. WAIVER | 22 |
| |
ARTICLE 28. UTILITY DEREGULATION | 23 |
| |
ARTICLE 29. TELECOMMUNICATIONS | 23 |
| |
ARTICLE 30. SURRENDER | 24 |
ARTICLE 31. QUIET ENJOYMENT | 25 |
| |
ARTICLE 32. HOLDNG OVER | 25 |
| |
ARTICLE 33. ENVIRONMENTAL COVENANTS, REPRESENTATIONS AND WARRANTIES | 25 |
| |
ARTICLE 34. TENANT'S COMPLIANCE WITH LAWS | 27 |
| |
ARTICLE 35. DISABILITIES ACT | 27 |
| |
ARTICLE 36. NOTICE | 28 |
| |
ARTICLE 37. BROKERS | 28 |
| |
ARTICLE 38. FORCE MAJEURE | 28 |
| |
ARTICLE 39. TRANSFER OF LANDLORD'S INTEREST | 28 |
| |
ARTICLE 40. SUCCESSORS | 29 |
| |
ARTICLE 41. GOVERNING LAW | 29 |
| |
ARTICLE 42. SEPARABILITY | 29 |
| |
ARTICLE 43. CAPTIONS | 29 |
| |
ARTICLE 44. GENDER | 29 |
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ARTICLE 45. EXECUTION; COUNTERPARTS | 30 |
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ARTICLE 46. ENTIRE AGREEMENT | 30 |
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ARTICLE 47. AUTHORITY | 30 |
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ARTICLE 48. SECURITY DEPOSIT | 30 |
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ARTICLE 49. OFAC CERTIFICATION | 31 |
EXHIBIT “A” DIAGRAM OF DEVELOPMENT | 33 |
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EXHIBIT “B” OUTLINE OF PREMISES | 34 |
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EXHIBIT “C” RULES AND REGULATIONS | 35 |
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EXHIBIT “D” INTENTIONALLY OMITTED | 36 |
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EXHIBIT “E” ESTOPPEL CERTIFICATE | 37 |
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EXHIBIT “F” SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT | 38 |
OFFICE LEASE AGREEMENT
This Office Lease Agreement (the “Lease”) is made this 20th day of January, 2015 (the “Effective Date”), by and between RJ EQUITIES LP, a Pennsylvania limited partnership (“Landlord”) and COGNITION THERAPEUTICS, INC., a Delaware corporation (“Tenant”).
ARTICLE 1. BASIC TERMS
For the purposes of this Lease, the following terms shall have the meanings set forth below:
(a) | Landlord: | RJ EQUITIES LP, a Pennsylvania limited partnership |
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(b) | Tenant: | COGNITION THERAPEUTICS, INC., a Delaware corporation |
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(c) | Premises: | Suites 261, 263, and certain shared lab space all of which is located on the second floor of the commercial building (the “Building”) situated at 2403 Sidney Street, Pittsburgh, PA 15203 (the ”Development”) and as outlined on the Diagram of Development attached hereto as Exhibit “A”. The Premises contains approximately 3,706 rentable square feet as depicted on the floor plan attached hereto as Exhibit “B” (and which, for informational purposes only, is allocated as follows: 1,577 sq. ft. for Suite 263; 1,472 sq. ft. for Suite 261; and 657 sq. ft. for the lab space). |
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(d) | Commencement Date: | February 1, 2015. |
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(e) | Initial Lease Term: | Three (3) years. |
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(f) | Termination Date: | January 31, 2018, subject to extension in accordance with this Lease. |
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(g) | Extension Term: | One (l) additional term of two (2) years. |
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(h) | Base Rent: | $85,238.00 per year / $7,103.17 per month. |
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(i) | Base Year for Real Estate Taxes: | 2009. |
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(j) | Base Year for Operating Costs: | 2009. |
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(k) | Approximate rentable area of the Premises: | 3,706. |
(l) | Approximate rentable area of the Building: | 221,000. | |
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(m) | Tenant's Proportionate Share: | 1.68%. | |
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(n) | Security Deposit: | N/A. | |
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(o) | Permitted Uses: | Lab Space and office use. | |
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(p) | Notification Addresses: | | |
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| | Landlord: | RJ Equities LP 2403 Sidney Street, Suite 200 Pittsburgh, PA 15203 Attn: Ronald J. Tarquinio |
| Tenant: | Cognition Therapeutics, Inc. 2403 Sidney Street, Suite 261 Pittsburgh, PA 15203 Attn: President | |
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(p) | Parking: | Tenant shall be provided, at no additional charge, nine (9) nonexclusive parking spaces. Fifteen (15) visitor parking spaces are available, at no additional charge, for Tenant's guests for visits of two (2) hours or less. | |
ARTICLE 2. PREMISES
Landlord, for and in consideration of the Rent (as defined below) to be paid and the covenants and agreements to be performed by Tenant, as hereinafter set forth, does hereby lease, demise and let unto Tenant the Premises, together with a non-exclusive license (in common with others), to use the common areas of the Building and the Development. Landlord reserves unto itself, however, the use of the roof, exterior walls and the area above and beneath the Premises, together with the right to install, maintain, use, repair and replace exterior windows and doors, pipes, ducts, conduits, wires and structural elements leading through the Premises in locations and in such a manner which shall not materially or adversely interfere with Tenant's use or occupancy thereof. In addition, Tenant shall have the right to maintain Tenant's existing signage at the Development as of the Effective Date.
ARTICLE 3. TERM AND COMMENCEMENT
(a)Term and Confirmation. The term of this Lease shall commence on the Commencement Date set forth in Article 1(d) and end on the Termination Date set forth in
Article 1(f), unless extended or sooner terminated as provided herein, subject to adjustment as provided below and the other provisions hereof. If the Commencement Date is postponed as provided below, the Termination Date set forth in Article 1 shall be adjusted accordingly. Tenant shall execute a confirmation of the Commencement Date and other factual matters in such form as Landlord may reasonably request within ten (10) days after requested by Landlord following the Commencement Date; any failure to respond within such time shall be deemed an acceptance of the matters as set forth in Landlord's confirmation. If Tenant disagrees with Landlord's adjustment of the Commencement Date, Tenant shall pay Rent and perform all other obligations commencing on the date as determined by Landlord, subject to refund or credit when the matter is resolved.
(b)Commencement Delays. The Commencement Date, Rent and Tenant's other obligations shall be postponed to the extent Tenant is unable to occupy the Premises because Landlord fails: (i) to substantially complete any improvements to the Premises required to be performed by Landlord under this Lease, except to the extent that Tenant, its contractors, agents or employees in any way contribute to such failure, or (ii) to deliver possession of the Premises for any other reason, including holding over by prior occupants. If Landlord so fails for a ninety (90) day initial grace period, Tenant shall have the right to terminate this Lease by notice within ten (10) days. Any such delay in the Commencement Date shall not subject Landlord to liability for loss or damage resulting therefrom, and Tenant's sole recourse with respect thereto shall be the postponement of Rent or termination of this Lease in accordance with the preceding sentence.
(c)Extension Terms. Provided that no event of default by Tenant has occurred hereunder, Tenant shall have one (1) option to extend the Lease Term (the “Extension Option”) for one additional period of two (2) years (the “Extension Term”). In order to exercise the Extension Option, Tenant shall provide to Landlord written notice nine (9) months prior to the expiration of the Lease Term. All of the terms and conditions of this Lease shall apply to the Extension Tem, including without limitation, the payment of additional rent as contemplated under Article 6 hereof, except that (i) Base Rent for the Extension Term shall be equal to the Fair Market Rental Value (as hereinafter defined) for the Premises as of the commencement of the Extension Term, and (ii) the Tenant shall accept the Premises
in its then “As-Is” condition. For purposes hereof, the term “Fair Market Rental Value” shall mean the then current market rental rate for comparable buildings in Pittsburgh, Pennsylvania, as reasonably determined by Landlord, giving appropriate consideration to the following matters: (i) annual rental rates per rentable square foot; (ii) the type of escalation clauses (including, but without limitation, operating expense, real estate taxes, and CPI); (iii) rent abatement provisions reflecting free rent and/or no rent during the Lease term; (iv) length of Lease term; (v) size and location of premises being leased; and (vi) other generally applicable terms and conditions of tenancy for similar space. The Landlord shall determine the Fair Market Rental Value by using Landlord's good faith judgment and shall provide written notice of such amount within thirty (30) days after the Tenant has notified the Landlord of the exercise of the Extension Option. The Tenant shall have ten (10) days after the receipt of such notice of the proposed Fair Market Rental Value within which to reject such rent. In the event Tenant fails to reject such proposed Fair Market Rental Value, by written notice delivered to Landlord within such ten (10) day period, then such proposal shall be deemed accepted and shall be the Base Rent applicable during the Extension Term. If Tenant timely rejects such proposed Fair Market Rental Value, then the Tenant's notice to Landlord shall specify that Tenant has elected to terminate the exercise of the Extension Option, whereupon such termination, the Extension Option shall be null and void for all purposes and the parties shall have no further obligation with respect thereto. The Extension Option is personal to Tenant and may be exercised only by Tenant while it occupies the entire Premises and may not be exercised or be assigned, voluntarily or involuntarily, by or to any other person or entity. If the Tenant fails to timely exercise the Extension Option, then the Extension Option shall automatically expire, Tenant shall no longer have the right to exercise the Extension Option and this section shall be of no further force or effect.
ARTICLE 4. CONSTRUCTION OF PREMISES
Tenant confirms that (1) it has inspected the Premises and accepts the same in its existing “AS IS” condition, and (2) no repair, work, alterations or remodeling of the Premises is required to be done by Landlord as a condition of this Lease.
ARTICLE 5. BASE RENT
(a)Base Rent. Tenant shall pay to Landlord Base Rent, payable in advance without demand on the first day of each calendar month throughout the Term; provided, that Tenant shall pay Base Rent for the first full calendar month for which Base Rent shall be due (and any initial partial month) when Tenant executes and delivers this Lease.
(b)Additional Rent. Whenever under the terms of this Lease any sum of money is required to be paid by Tenant to Landlord in addition to the Base Rent herein reserved, and said additional amount so to be paid is not designated as “additional rent”, then said amount shall nevertheless, at the option of Landlord, be deemed “additional rent” and collectible as such, but nothing herein contained shall be deemed to suspend or delay the payment of any sum at the time the same becomes due and payable hereunder, or limit any other remedy of Landlord. Nonpayment of additional rent beyond the expiration of applicable notice and/or cure periods shall constitute a default under this Lease to the same extent, and shall entitle the Landlord to the same remedies, as nonpayment of Base Rent. Where no time limit for payment is otherwise stated in the specific Lease provision applicable thereto, any such obligation shall be due and payable within fifteen (15) days following Tenant's receipt of a written statement showing in reasonable detail the basis for the amount claimed. Base Rent and additional rent are sometimes hereinafter referred to as “Rent”.
(c)Payments. All payments of Rent shall be paid when due without any deduction, recoupment, set-off or counterclaim (except as otherwise set forth in this Lease) at the principal office of the Landlord or at such other place as Landlord may from time to time direct. No delay by Landlord in providing a statement for Rent shall be deemed a default by Landlord or a waiver of Landlord's right to require payment of Tenant's obligations for any Rent due under the terms of this Lease.
ARTICLE 6. RENT ESCALATION
(a)Real Estate Tax Increases. Tenant shall pay to Landlord, as additional rent, Tenant's Proportionate Share of the amount by which Real Estate Taxes incurred by Landlord during any calendar year following the Base Year for Real Estate Taxes shall exceed the Real Estate Taxes incurred by Landlord during such Base Year.
“Real Estate Taxes” shall be deemed to mean the aggregate amount of taxes and assessments levied, assessed or imposed upon the Development in which the Premises are located. For purposes hereof, Real Estate Taxes shall include, without limitation, real estate taxes, sewer rents, water rents, assessments (special or otherwise), transit taxes, any tax or excise on rentals or any other tax (however described) on account of rental received for use and occupancy of all or any part of the Premises, whether such taxes are imposed by the United States of America, the Commonwealth of Pennsylvania, the county in which the Premises is located or any local governmental municipality, authority or agency, or any other political subdivision of any of the foregoing. Real Estate Taxes shall also include all reasonable costs and expenses (including, without limitation, legal fees and court costs) incurred in connection with the protest or the reduction of any of the aforesaid taxes and or assessments, up to an amount equal to the reduction of any of the aforesaid taxes resulting from such protest. If at any time during the term hereof, a tax or excise on rents or any other tax, however described, is levied or assessed by any governmental authority on account of the rents hereunder or the interest of Landlord or Landlord's beneficiaries under this Lease,
then such additional tax shall be included in Real Estate Taxes. Further, any tax assessed or levied by any governmental authority in lieu of the foregoing Real Estate Taxes shall also be included. For the purpose of determining Real Estate Taxes for any given calendar year, the amount to be paid for such calendar year shall be (a) with respect to assessments, the amount of the installments (and any interest) due and payable during such calendar year and (b) with respect to all other Real Estate Taxes, the amount due and payable during such calendar year, but only to the extent properly allocable to such calendar year. Notwithstanding anything in this Lease to the contrary, “Real Estate Taxes” shall not include (i) any capital stock, net income, profit tax, succession, transfer, franchise, gift, estate or inheritance tax, (ii) any transfer tax or recording charge resulting from a transfer of the Development or the Building or any interest in the Development or the Building or (iii) any penalties, interest or fines incurred by Landlord due to nonpayment or late payment of taxes.
(b)Operating Cost Increases. Tenant shall pay to Landlord, as additional rent, Tenant's Proportionate Share of the amount by which Operating Costs incurred by Landlord during any calendar year following the Base Year for Operating Costs shall exceed the Operating Costs incurred by Landlord during such Base Year.
“Operating Costs” shall be deemed to mean all costs and expenses of any kind or nature incurred by Landlord in any calendar year in operating, policing, protecting, lighting, heating, air conditioning, insuring, repairing and maintaining the Building, other structures and improvements and the land constituting or supporting the Development, all in accordance with accepted principles of sound management of similar properties, and shall include (without limitation) all costs and expenses of operation, replacement, replacement and maintenance, including by way of illustration and not limitation: personal property taxes and any tax in addition to or in lieu thereof, assessed against Landlord or to be collected by Landlord; utilities; supplies; materials; tools; insurance (including, but not limited to, commercial general liability, casualty, business interruption, rent loss insurance and flood and earthquake insurance); licenses, permits and inspection fees; cost of services of independent contractors (including property management fees); any tax, assessment, cost or fee incurred by Landlord in connection with the Development from any neighborhood improvement district or similar program or initiative; cost of compensation (including employment taxes and fringe benefits) of all persons who perform regular and recurring duties connected with day-to-day operation, maintenance and repair of the Development, its equipment and the component interior and exterior common areas, ceilings, floors, walks, stairs, stairwells, elevators, loading docks, trash compactor, malls and landscaped areas including janitorial, gardening, security, parking, operating engineer, painting, plumbing, electrical, carpentry, heating, ventilation, air conditioning, window washing, signage and advertising; rental expense or a reasonable allowance for depreciation of personal property used in such maintenance, operation and repair of the Development; those variable costs, expenses and disbursements which Landlord reasonably determines Landlord would have incurred had the Development been 100% occupied at all times during such calendar year; and amortization of Permitted Capital Expenditures (as hereinafter defined).
Notwithstanding anything in this Lease to the contrary, “Operating Costs” shall not include the following: costs to benefit, or relating to, a specific tenant, such as legal and other related expenses associated with the negotiation or enforcement of leases, and any penalties or damages from such lawsuits; costs associated with the financing or refinancing of debt or selling of the Building, the Development or any interest therein, such as points, broker's fees and attorney's fees; executive salaries and compensation of employees of Landlord above the grade of regional property manager; repairs and/or replacements which are covered by insurance claim or condemnation proceeds; leasing commissions, legal fees, tenant allowances or fit outs (including permit, license and inspection fees), advertising costs, space planning costs and promotional material; costs incurred by Landlord in connection with the original construction of the Building or the correction of latent defects in construction of the Building; depreciation and amortization (except for amortization of Permitted Capital Expenditures); costs paid to subsidiaries or affiliates of Landlord, to the extent that the costs exceed the reasonable costs that would have been paid had the services, supplies or materials been provided by unaffiliated parties on a reasonable basis; interest on debt or amortization payments on any mortgage or deeds of trust or any other borrowings and any ground rent; ground rents or rentals payable by Landlord pursuant to any over-lease or any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord; costs incurred in managing or operating any “pay for” parking facilities within the Development; expenses resulting from the gross negligence or willful misconduct of Landlord or its agents, employees or contractors; any fines or fees for Landlord's failure to comply with governmental, quasi-governmental, or regulatory agencies' rules and regulations, or any costs or expenses incurred by Landlord due to violation by Landlord, or Landlord's agents, contractors or employees, of either the payment terms and conditions of any lease or, service contract or other agreement covering the Development or Landlord's obligations as owner of the Development; costs for sculpture, decorations, painting or other objects of art in excess of amounts typically spent for such items in office buildings of comparable quality in the competitive area of the Building; costs of any political, charitable or civic contribution or donations; Capital Items, except for Permitted Capital Expenditures; costs that are properly chargeable to particular tenants in the Development, including, without limitation, costs and expenses for providing heating and air conditioning service outside of normal business hours and damages to the Development or any part thereof caused by the act or neglect of another tenant; costs relating to utilities or other services to tenant spaces for which Tenant pays for such utilities or other services directly; costs properly attributable (applying generally accepted accounting principles) to other calendar years; costs paid by Landlord if and to the extent such costs are incurred by Landlord for any work or service furnished to any other tenant in the Development (other than Tenant) to a materially greater extent and in a materially more favorable manner than furnished generally to the remaining tenants in the Project (including Tenant); costs incurred with respect to preparation of income tax returns; and costs incurred in cleaning up any environment hazard or condition in violation of any environmental law. “Permitted Capital Expenditures” means capital expenditures and capital repairs and replacements (“Capital Items”), provided such Capital Items (x) are necessitated by a change in law or regulation occurring after the Commencement Date; or (y) are reasonably intended to have cost-saving benefits over the Term of the Lease. The foregoing provision is for definitional purposes only and shall not be construed to impose any obligation upon Landlord to incur such expenses. No item of Operating Cost
shall be included more than once in any given time period and no item of expense charged to Tenant as an Operating Cost shall be charged to Tenant as Real Estate Taxes or any other type of chargeable expense or cost. The property management fees incurred by Landlord shall only be chargeable to Tenant to the extent such property management fees do not exceed the property management fees incurred by other buildings of similar size and quality and located within the geographic area in which the Development is located.
(c)Method of Payment. Within sixty (60) days after the end of each calendar year (including the last calendar year of the term of this Lease), Landlord shall furnish Tenant a written statement showing in reasonable detail Landlord's Real Estate Taxes and Operating Costs for the Base Year and the preceding calendar year and showing Tenant's Proportionate Share of the amount of any increase in such Real Estate Taxes and/or Operating Costs over the amount thereof for the respective Base Year. Coincidentally with the monthly rent payment due following Tenant's receipt of such statement, Tenant shall pay to Landlord an amount equal to the sum of (1) Tenant's Proportionate Share of the increase in Real Estate Taxes and Operating Costs for the preceding calendar year over the amount thereof for the applicable Base Year; and (2) one-twelfth (1/12th) of such increases for the current calendar year multiplied by the number of rent payments (including the current one) then elapsed in such calendar year. Thereafter such one-twelfth (1/12th) amount shall be paid monthly with the Base Rent until subsequently adjusted in accordance with the terms of this Article.
(d)Tenant's Proportionate Share. “Tenant's Proportionate Share” of Taxes and Operating Costs shall be the percentages set forth in Article 1, but if the rentable area of the Premises or Building shall change, Tenant's Proportionate Share shall thereupon become the rentable area of the Premises divided by the rentable area of the Building, subject at all times to adjustment as provided in this Article. Tenant acknowledges that the “rentable area of the Premises” under this Lease includes the usable area, without deduction for columns or projections, multiplied by a load or conversion factor, to reflect a share of certain areas, which may include lobbies, corridors, mechanical, utility, janitorial, boiler and service rooms and closets, restrooms, and other public, common and service areas. Except as provided expressly to the contrary herein, the “rentable area of the Building” shall include all rentable area of all space leased or available for lease at the Building which Landlord may reasonably re-determine from time to time, to reflect re-configurations, additions or modifications to the Building.
(e)Tax Refunds. Protest Costs. and Expense Adjustments For Prior Years. Landlord shall each year: (i) credit against Real Estate Taxes any refunds received during such year, (ii) include in Real Estate Taxes any additional amount paid during such year, involving an adjustment to Real Estate Taxes for a prior year, due to error by the taxing authority, supplemental assessment, or other reason, (iii) include, in either Real Estate Taxes or Operating Costs, any fees for attorneys, consultants and experts, and other costs paid during such year in attempting to protest, appeal or otherwise seek to reduce or minimize Real Estate Taxes, by the terms of this Article, (iv) credit against Operating Costs the cost of any item previously included in Operating Costs, to the extent that Landlord receives reimbursement from insurance proceeds or a third party during such year (excluding tenant payments for Real Estate Taxes and Operating Expenses), and (v) make any other appropriate changes to reflect adjustments to Real Estate Taxes or Operating Expenses for prior years.
(f)Payments After Lease Term Ends. Tenant's obligations to pay Tenant's Proportionate Share of Real Estate Taxes and Operating Costs (or any other amounts) accruing during, or relating to, the period prior to expiration or earlier termination of this Lease shall survive the expiration or termination of this Lease for a period of two (2) years. Tenant shall pay the full amount of such estimate and any additional amount due after the actual amounts are determined, in each case within thirty (30) days after Landlord sends a statement therefore. If the actual amount is less than the amount Tenant pays as an estimate, Landlord shall refund the difference within thirty (30) days after such determination is made.
(g)Audit Rights. In the event of any dispute as to the amount of Tenant's Proportionate Share of Operating Costs and Real Property Taxes, Tenant may, by prior written notice (“Audit Notice”) given ninety (90) days following receipt of a Landlord's reconciliation statement (“Audit Period”), audit Landlord's accounting records with respect to Operating Expenses and Real Property Taxes relative to the year to which such statement relates. The audit shall be conducted by Tenant, or an accounting firm engaged by Tenant and reasonably satisfactory to Landlord (billing hourly and not on a contingency fee basis) (“Third Party Auditor”), and shall be conducted at the office of Landlord at which its records are kept or, at Landlord's election, the office of Landlord's property manager (if any). The audit shall be conducted at reasonable times during normal business hours. In no event will Landlord or its property manager be required to (i) photocopy any accounting records or other items or contracts, (ii) create any ledgers or schedules not already in existence, (iii) incur any costs or expenses relative to such inspection, or (iv) perform any other tasks other than making available such accounting records as aforesaid. Neither Tenant nor its auditor may leave the office of Landlord with originals of any materials supplied by Landlord. Tenant must pay Tenant's Proportionate Share of Operating Costs and Real Property Taxes when due pursuant to the terms of this Lease and may not withhold payment of Operating Costs, Real Property Taxes or any other Rent pending results of the audit or during a dispute regarding Operating Costs and Real Property Taxes. The audit must be completed within ninety (90) days of the date of Tenant's Audit Notice and the results of such audit shall be delivered to Landlord within forty-five (45) days of the date of Tenant's Audit Notice. If Tenant does not substantially comply with any of the aforementioned time frames, then the Landlord's statement will be conclusively binding on Tenant. If such audit or review correctly reveals that Landlord has overcharged Tenant, then within thirty (30) days after the results of such audit are made available to Landlord, the amount of such overcharge shall be deducted from the installments of Tenant's Share of Operating Costs and Real Property Taxes next becoming due. If the audit reveals that Tenant was undercharged, then within thirty (30) days after the results of the audit are made available to Tenant, Tenant agrees to reimburse Landlord
the amount of such undercharge. Tenant agrees to keep the results of the audit confidential and will cause its agents, employees and contractors to keep such results confidential. To that end, Landlord may require Tenant and its auditor to execute a commercially reasonable confidentiality agreement provided by Landlord.
ARTICLE 7. LATE PAYMENT
A late charge of five (5%) percent shall be due and payable forthwith on the amount of Base Rent and additional rent not received by Landlord from Tenant on or before the tenth (10th) day after such payment was due. In addition, Tenant shall pay interest at the Lease Interest Rate (as defined below) on any sum which is not paid when due, interest to run from the due date until such sum is paid. The “Lease Interest Rate” means four (4) percentage points per annum above the prime rate per annum announced from time to time by PNC Bank, N.A, or its successors.
ARTICLE 8. USE OF PREMISES
Tenant shall occupy and use the Premises only for the Permitted Uses set forth in Article l. Tenant shall not occupy or use the Premises for any other purpose or business without the prior written consent of Landlord. Landlord has promulgated reasonable Rules and Regulations (“Rules and Regulations”), which are attached hereto, made part hereof and marked as Exhibit “C”. Tenant acknowledges receipt of and shall observe and comply with such Rules and Regulations. Tenant further acknowledges that Landlord, in Landlord's reasonable discretion, may from time to time adopt, amend, establish, modify, proscribe or restate such rules and regulations with regard to the operation of the Premises, the Building, and common areas of the Development; provided that such rules and regulations are generally applicable to all tenants, do not materially increase the financial burdens of Tenant and do not materially adversely affect Tenant's rights under this Lease. In the event of any conflict between the provisions of such rules and regulations and this Lease, the provisions of this Lease shall control.
ARTICLE 9. COMMON AREAS/PARKING
All parking areas, driveways, alleys, public corridors and fire escapes, and other areas, facilities and improvements as may be approved by Landlord from time to time for the general use, in common, of Tenant and other tenants, their employees, agents, invitees and licensees, shall at all times be subject to the exclusive control and management of Landlord, and Landlord shall have the right from time to time to establish, modify and enforce reasonable rules and regulations with respect to all such areas, facilities and improvements.
Landlord reserves the right to designate certain parking areas for non-exclusive permitted parking for tenant’s employees, for general visitor parking, and for other designated uses. Tenant shall be allocated the number of non-exclusive permitted parking spaces as set forth in Article 1 for the use of Tenant's employees, the location of such parking spaces to be designated by Landlord from time to time according to the Landlord's parking policies and procedures. Landlord agrees to enforce its parking regulations for the mutual benefit of Landlord and tenants of the Development. Except for claims resulting from Landlord's intentional or grossly negligent acts, Landlord shall not be responsible or liable for damage or loss sustained to motor vehicles (including any contents) parked in the Development.
ARTICLE 10. ALTERATIONS
(a)Tenant shall not make any alterations, improvements or additions to the Premises or attach any fixtures or equipment thereto, without the Landlord's prior written approval, not to be unreasonably withheld. All alterations, improvements or additions made to the Premises or the attachment of any fixtures or equipment thereto shall be performed at Tenant's sole cost and expense. Tenant may affix pictures and shelving to the walls without Landlord's consent.
(b)All alterations, improvements or additions to the Premises made by Tenant shall be deemed to have been attached to the Premises and to have become the property of Landlord upon such attachment, and upon expiration of this Lease or renewal term thereof, Tenant shall not remove any of such alterations, improvements or additions; provided, however, that Landlord may designate by written notice to Tenant at the time Tenant requests consent those alterations and additions which shall be removed by Tenant at the expiration or termination of this Lease, and Tenant shall properly remove the same and repair any damage to the Premises caused by such removal. Notwithstanding anything in this Lease to the contrary, all furniture, trade fixtures and equipment installed by or for Tenant may be removed by Tenant at any time.
(c)In performing such alterations, improvements or additions, or in the removal thereof, Tenant shall use due care to cause as little damage or injury as possible to the Premises and the Building and shall repair all damage or injury that may occur to the Premises or the Building as a result thereof.
(d)Tenant agrees in doing any such work in or about the Premises to engage only such labor as will not conflict with or cause strikes or other labor disturbances among the Development service employees of Landlord. Any contractors employed by Tenant shall be subject to Landlord's prior written approval, not to be unreasonably withheld. All such contractors shall be required to carry worker's compensation insurance, public liability insurance and property damage insurance in amounts, form and content, and with companies reasonably satisfactory to Landlord.
(e)Prior to the commencement by Tenant of any work as set forth in this Article, Tenant shall obtain, at Tenant's sole cost and expense, all necessary permits, authorizations and licenses required by the various governmental authorities having jurisdiction over the Premises.
ARTICLE 11. MECHANIC’S LIENS
If any mechanics' or other lien shall be filed against the Premises or the Development purporting to be for labor or material furnished or to be furnished at the request of Tenant, then Tenant shall at its expense cause such lien to be discharged by payment, bond or otherwise within thirty (30) days after notice of filing thereof. As an alternative to causing the lien to be discharged of record, Tenant shall have the right to contest the validity of any lien or claim if Tenant shall first have posted a bond or other security reasonably satisfactory to Landlord (such as an undertaking with Landlord's title company to insure that, upon final determination of the validity of such lien or claim, Tenant shall immediately pay any judgment rendered against Tenant). If Tenant shall fail to take such action within such thirty (30) day period, Landlord may cause such lien to be discharged by payment, bond or otherwise, without investigation as to the validity thereof or as to any offsets or defenses thereto and Tenant shall, upon demand, reimburse Landlord for all amounts paid and costs incurred including reasonable attorney's fees, in having such lien discharged of record. Tenant shall indemnify and hold Landlord harmless from and against any and all claims, costs, damages, liabilities and expenses (including reasonable attorney’s fees) which may be brought or imposed against or incurred by Landlord by reason of any such lien or its discharge.
ARTICLE 12. CONDITION OF PREMISES
Tenant acknowledges and agrees that, except as expressly set forth in this Lease, there have been no representations or warranties made by or on behalf of Landlord with respect to the Building, Premises or the Development or with respect to the suitability of any of them for the conduct of Tenant's business. The taking of possession of the Premises by Tenant shall conclusively establish that the Premises were at such time in satisfactory condition, order and repair, subject to latent defects which a reasonable inspection of the Premises would not disclose.
ARTICLE 13. UTILITIES AND SERVICES
(a)Utilities: Separately metered electric and gas service shall be made available to the Premises. Tenant shall pay for the cost of such utility services directly to the utility provider or to the Landlord, as the case may be.
(b)Building Services: Landlord shall provide the following to the Premises, the Building or the Development, as applicable:
1)Water and sewage for the Permitted Use;
2)Replacement standard light globes and/or standard fluorescent tubes and ballasts in the standard ceiling lighting fixtures;
3)HVAC, including maintenance of HVAC equipment and systems;
4)Passenger and freight elevator service and maintenance and repair;
5)Hot and cold water for drinking, lavatory and toilet purposes at those points of supply provided for nonexclusive general use of tenants of the Building, and points of supply in the Premises installed by or with Landlord's consent for the exclusive use of Tenant;
6)Maintenance and repair of interior common areas of the Building, including the public restrooms in the Building; and
7)Maintenance and repair of exterior common areas of the Development, including but not limited to cleaning of outside exterior windows and doors, snow removal and landscaping.
(c)Landlord does not warrant that the utilities or services provided for in this Article shall be free from slow-down, interruption or stoppage pursuant to voluntary agreement by and between Landlord and governmental bodies and regulatory agencies, or caused by the maintenance, repair, substitution, renewal, replacement or improvements of any of the equipment involved in the furnishing of any such utilities or services or caused by strikes, lockouts, labor controversies, fuel shortages, accidents, acts of God or the elements or any other cause beyond the reasonable control of Landlord; and specifically, no such slow-down, interruption or stoppage of any of such services shall be construed as an eviction, actual or constructive, of Tenant, nor shall same cause any abatement of Base Rent or additional rent payable hereunder or in any manner or for any purpose relieve Tenant from any of Tenant's obligations hereunder, unless same shall make a material portion of the Premises untenantable for a period of three (3) consecutive business days at which point Base Rent shall be abated until such time as the Premises are no longer untenantable, and in no event shall Landlord be liable for damages to persons or property or be in default hereunder as a result of such interruption or stoppage of service. Should said disruption of service or utilities cause significant interference with Tenant's business for a period of sixty (60) days, Tenant shall have the right to terminate this Lease by written notice to Landlord. Landlord shall provide Tenant with reasonable advance notice of any anticipated interruptions in utility or Building services, and Landlord shall use reasonable efforts to minimize disruption of Tenant's use and occupancy in connection therewith.
ARTICLE 14. ASSIGNMENT AND SUBLETTING
Tenant shall not assign this Lease or sublet the Premises, (whether by operation of law or voluntary agreement) in whole or in part, without the Landlord's prior written consent, not to be unreasonably withheld.
Notwithstanding the foregoing, Tenant may assign this Lease, or sublet the Premises or any portion thereof an affiliate controlling, controlled by or under common control with Tenant, without Landlord consent, but with notice thereof to Landlord. Tenant may sublet all or a portion of the Premises without prior consent to third parties and entities related to Tenant either through affiliated or commercial relationships for the purpose of conducting laboratory research and development, and/or commercial prototype manufacturing related activities. Any license, assignment, subleasing or other occupancy agreement shall be subject to all terms, covenants and conditions of this Lease and no license, assignment, subleasing or other occupancy agreement shall relieve Tenant of any liability hereunder. Upon Landlord's request, Tenant shall provide Landlord with copies of all reasonable documentation related to any license, assignment, sublease, or other occupancy agreement and Tenant shall require any permitted licensee, assignee, sublicensee, or other occupant to obtain and maintain commercially reasonable insurance naming Landlord as additional insured. Tenant shall provide copies evidencing such insurance to Landlord upon Landlord's request.
In case of any assignment or subletting, Tenant shall remain primarily liable on this Lease and shall not be released from the performance of any of the terms, covenants and conditions hereof
ARTICLE 15. RIGHTS RESERVED BY LANDLORD
Except to the extent expressly limited herein, Landlord reserves full rights to control the Development, the Building and the Premises (which rights may be exercised without subjecting Landlord to claims for constructive eviction, abatement of Rent, damages or other claims of any kind), including more particularly, but without limitation, the following rights for Landlord, its employees or agents; provided however, Landlord shall use commercially reasonable efforts to exercise such rights in a manner that will first attempt to minimize interference with Tenant's use and occupancy of the Premises:
(a) Access to Premises. To enter the Premises in order to inspect, supply cleaning service or other services to be provided Tenant hereunder, show the Premises to current and prospective lenders, insurers, purchasers, tenants, brokers and governmental authorities, and perform any work or take any other actions reserved to Landlord under this Lease or applicable laws. However, Landlord shall: (i) provide reasonable advance written or oral notice to Tenant's on-site manager or other appropriate person (except in emergencies), (ii) take reasonable steps to minimize any significant disruption to Tenant's business, and following completion of any work, return Tenant's leasehold improvements, fixtures, property and equipment to the original locations and condition to the fullest extent reasonably possible, and
(iii) take reasonable steps to avoid materially changing the configuration or reducing the square footage of the Premises, unless required by laws or other causes beyond Landlord's reasonable control (and in the event of any permanent reduction, the Rent and other rights and obligations of the parties based on the square footage of the Premises shall be proportionately reduced). Tenant shall not place partitions, furniture or other obstructions in the Premises which may prevent or impair Landlord's access to the systems and equipment for the Building or the systems and equipment for the Premises. If Tenant requests that any such access occur before or after Landlord's regular business hours and Landlord approves, Tenant shall pay all overtime and other additional costs in connection therewith.
(b) Changes to the Development. To: (i) paint and decorate, (ii) perform repairs or maintenance, and (iii) make replacements, restorations, renovations, alterations, additions and improvements, structural or otherwise in and to the Development or any part thereof, including any adjacent building, structure, facility, land, street or alley, or change the uses thereof (including changes, reductions or additions of corridors, entrances, doors, lobbies, parking facilities and other areas, structural support columns and shear walls, utility lines, pipes, duct work, cables, installations, docks, walks, elevators, stairs, solar tint windows or film, planters, sculptures, displays, and other amenities and features therein, and changes relating to the connection with or entrance into or use of the Building or any other adjoining or adjacent building or buildings, now existing or hereafter constructed). In connection with such matters, Landlord may among other things erect scaffolding, barricades and other structures, open ceilings, close entry ways, restrooms, elevators, stairways, corridors, parking and other areas and facilities, and take such other actions as Landlord deems appropriate.
ARTICLE 16. REPAIRS
(a)Subject to the provisions of Article 6 hereof, Landlord shall perform all maintenance and make all repairs or replacement necessary to maintain the structural, plumbing, HVAC and electrical systems (including replacement of light bulbs, ballasts and fixtures), exterior doors and windows, roof, exterior walls, demising walls and floor (but excluding interior ceiling, wall and floor finishes), common areas and utility lines and connections servicing the Premises, the Building or the Development in good order and condition. Landlord shall commence such repairs as promptly as the circumstances reasonably permit and thereafter shall diligently pursue the same to completion with reasonable promptness. Notwithstanding anything contained in this Lease to the contrary, Tenant shall be responsible, at its sole cost and expense, for any maintenance, repairs and replacements made by the Landlord which are necessitated by the negligent acts, misuse or willful misconduct of Tenant, its agents, contractors, employees or invitees.
(b)Except as the Landlord is obligated for repairs as provided hereinabove, Tenant shall make at Tenant's sole cost and expense, all repairs necessary to maintain the Premises and shall keep the Premises and the fixtures therein in neat, clean, safe and orderly condition. In addition, and notwithstanding anything contained in this Lease to the contrary, the Tenant shall, at its sole cost and expense, maintain, repair and replace all lab equipment contained in the lab space portion of the Premises, including without limitation all water treatment systems and vacuum equipment. If the Tenant refuses or neglects to make such repairs, or fails to diligently prosecute the same to completion, after written notice from Landlord of the need therefore, Landlord may make such repairs at the expense of Tenant and such expense, along with a fifteen (15%) percent service charge, shall be collectible as additional rent.
(c) Landlord shall not be liable by reason of any injury to or interference with Tenant's business arising from the making of any repairs in accordance with this Article 16 in or to the Premises or the Building and Development or to any appurtenances or equipment therein; provided that Landlord shall interfere as little as reasonably practicable with the conduct of Tenant's business in the performance of the foregoing. There shall be no abatement of Rent because of such repairs, except as provided in Article 20 hereof.
ARTICLE 17. INDEMNIFICATION AND INSURANCE
(a)Indemnification.
(i)Tenant shall indemnify, hold harmless and defend Landlord from and against any and all costs, expenses (including reasonable counsel fees), liabilities, losses, damages, suits, actions, fines, penalties, claims or demands of any kind and asserted by or on behalf of any person or governmental authority, arising out of or in any way connected with, and Landlord shall not be liable to Tenant on account of, (i) any failure by Tenant to perform any of the agreements, terms, covenants or conditions of this Lease required to be performed by Tenant, (ii) any failure by Tenant to comply with any statutes, ordinances, regulations or orders of any governmental authority applicable to Tenant's occupancy and use of the Premises, or (iii) any accident, death or personal injury, or damage to or loss or theft of property, which shall occur in or about the Premises, except to the extent caused by the negligence or willful misconduct of Landlord, its agents, employees or contractors.
(ii)Landlord shall indemnify, hold harmless and defend Tenant from and against any and all costs, expenses (including reasonable counsel fees), liabilities, losses, damages, suits, actions, fines, penalties, claims or demands of any kind and asserted by or on behalf of any person or governmental authority, arising out of or in any way connected with, (i) any failure by Landlord to perform any of the agreements, terms, covenants or conditions of this Lease required to be performed by Landlord, or (ii) the negligence or willful misconduct of Landlord or its agents, employees or contractors.
(b)Required Insurance. Tenant shall maintain at its expense during the term with respect to the Premises and Tenant's use thereof and of the Building:
(i)Worker's compensation insurance in the amounts required by statute, and Employer Liability Insurance in at least the following amounts: (a) Bodily Injury by Accident - $500,000 per accident, (b) Bodily Injury by Disease - $500,000 per employee and (c) Aggregate Limit - $1,000,000 per policy year.
(ii)Property Damage Insurance for the protection of Tenant and Landlord, as their interest may appear, covering all risks of physical loss to Tenant's alterations or improvements, personal property, business records, fixtures and equipment in amounts not less than the full insurable replacement cost of such property and full insurable value of such other interests of Tenant, such policies to be in form reasonably satisfactory to Landlord.
(iii)Commercial general liability insurance in form reasonably satisfactory to Landlord with limits of at least the following amounts: (a) death or bodily injury - $2,000,000, (b) property damage or destruction (including loss of use thereof) - $2,000,000 per policy year. Such policy shall include endorsements: (1) for contractual liability covering Tenant's indemnity obligations under this Lease, and (2) for adding Landlord, Landlord's mortgagee, the management company for the Development, and other parties designated by Landlord, as additional insureds.
(c)Certificates. Subrogation and Other Matters. Tenant shall provide Landlord with certificates evidencing the coverage required hereunder prior to the Commencement Date, or Tenant's entry to the Premises for construction of improvements or any other purpose (whichever first occurs). Such certificates shall state that such insurance coverage may not be changed, canceled or non-renewed without at least thirty (30) days' prior written notice to Landlord. Tenant shall provide renewal certificates to Landlord at least ten (10) days prior to expiration of such policies. Tenant's insurance policies shall be primary to all policies of Landlord and any other additional insureds (whose policies shall be deemed excess and noncontributory). All insurance required hereunder shall be provided by responsible insurers licensed in the Commonwealth of Pennsylvania, and shall have a general policy holder's rating of at least A and a financial rating of at least X in the then current edition of Best's Insurance Reports. The parties mutually hereby waive all rights and claims against each other for all losses covered by their respective insurance policies, and waive all rights of subrogation for their respective
insurers. The parties agree that their respective insurance policies are now, or shall be, endorsed such that said waiver of subrogation shall not affect the right of the insured to recover thereunder. Landlord disclaims any representations as to whether the foregoing coverages will be adequate to protect Tenant.
(d)Landlord Insurance. At all times during the Lease Term, Landlord agrees to maintain in force and effect (i) all-risk fire and extended coverage insurance on the Building, and (ii) commercial general liability insurance with limits and deductibles consistent with those maintained by owners of similarly situated buildings in the vicinity of the Building.
ARTICLE 18. LANDLORD'S LIABILITY
Except for claims arising from the negligent acts or willful misconduct of Landlord or its agents, employees or contractors, Tenant waives all claims against Landlord and Landlord's partners, members, agents and employees for injury or death to persons, damage to property or any other interest of Tenant sustained by Tenant or a party claiming by or through Tenant resulting from: (a) any defect in or failure of structural, plumbing, sprinkling, electrical, heating or air conditioning systems or equipment, or any other systems and equipment of the Premises or the Building or from the drains, pipes, plumbing or sewer; (b) broken glass; (c) any acts or omissions of the other tenants or occupants of the Building or of nearby buildings; (d) any acts or omissions of other persons; (e) damage or loss sustained to motor vehicles (including any contents) parked at or operating within the Development, from any cause; and (e) theft, Act of God, public enemy, injunction, riot, strike, insurrection, war, court order, or any order of any governmental authorities having jurisdiction over the Premises.
ARTICLE 19. COMPLIANCE WITH INSURANCE REQUIREMENTS
Tenant agrees that Tenant will not do or suffer to be done, any act, matter or thing, objectionable to the fire insurance companies whereby the fire insurance or any other insurance now in force or hereafter to be placed on the Premises or any part thereof, or on the Building of which the Premises may be a part, shall become void or suspended, or whereby the same shall be rated as a more hazardous risk than at the date when Tenant receives possession hereunder. In case of a breach of this covenant, in addition to all other remedies of Landlord hereunder, Tenant agrees to pay to Landlord as additional rent, any and all increases in premiums on insurance carried by Landlord on the Premises or any part thereof, or on the Building of which the Premises may be a part, caused in any way by the occupancy of Tenant. Notwithstanding the foregoing, Landlord acknowledges that the Permitted Use shall not constitute a breach of this Article 19.
ARTICLE 20. FIRE OR OTHER CASUALTY
(a)If the Building and/or Premises are damaged by fire or any other cause to such extent that the same cannot be restored, as reasonably estimated by Landlord, within one hundred twenty (120) days after the date of such damage or destruction, then Landlord shall, no later than the sixtieth (60th) day following the damage, give Tenant notice of Landlord's election either to (a) restore the Building and Premises or (b) terminate this Lease. In the event Landlord elects to terminate this Lease, the Lease shall terminate on the earlier of the date of such notice or the date upon which Tenant surrenders possession of the Premises. In such event, the Rent and other charges due hereunder shall be apportioned as of the date of such casualty, and any Rent paid for any period beyond said date shall be repaid to Tenant. If the time of restoration as estimated by Landlord shall be less than one hundred twenty (120) days, or if Landlord does not elect to terminate this Lease, as hereinabove provided, Landlord shall restore the Building and the Premises, and Tenant shall have not right to terminate this Lease except as herein provided. Tenant shall, in such event, restore fixtures and improvements owned by Tenant to the original condition. Notwithstanding the foregoing, however, if the time of restoration as reasonably estimated by Landlord exceeds one hundred twenty (120) days, Tenant shall have the right to terminate this Lease upon notice given to Landlord within thirty (30) days after the date of Landlord's notice of the estimated restoration period. Landlord shall deliver notice of the estimated restoration period within sixty (60) days after the date of the casualty.
(b)In any such case in which use of the Premises is affected by any damage thereto, there shall be an abatement or an equitable reduction in Rent, depending on the period for which, and the extent to which, the Premises is not reasonably usable for the purposes for which it is leased hereunder. If the damage results from the fault of Tenant, or Tenant's agents, servants, visitors or licensees, Tenant shall not be entitled to any abatement or reduction of Rent up to the amount of the deductible paid by Landlord.
ARTICLE 21. SUBORDINATION
This Lease shall be subject and subordinate to the lien of any mortgage, or renewals, modifications, consolidations, replacements or extensions thereof, which now or hereafter may affect the Premises. Tenant shall, at Landlord's request, execute such agreements and other instruments as Landlord or any mortgagee of the Premises reasonably shall deem necessary or desirable to subordinate this Lease to the lien of any present or future mortgage, mortgages or construction loans against the Premises. The subordination of this Lease shall be subject to any current or future mortgage holder(s) agreement not to disturb Tenant's occupancy so long as Tenant is not then in default of this Lease. Tenant specifically approves and, upon Landlord's request, agrees to execute an Estoppel Certificate and a Subordination, Nondisturbance and Attornment Agreement substantially in the forms attached hereto as Exhibits “E” and “F”, respectively.
ARTICLE 22. CONDEMNATION
(a)In the event the Premises, or any part thereof, shall be taken or condemned permanently or temporarily for any public or quasi-public use or purpose by any competent authority in appropriation proceedings or by any right of eminent domain, the entire compensation award therefore, including leasehold, reversion and fee, shall belong to the Landlord without any deduction therefrom for any present or future estate of Tenant. Tenant shall, however, be entitled to claim, prove and receive in such condemnation proceedings such award as may be allowed for fixtures and other equipment installed by it, and for moving expenses, but only if such award shall be in addition to the award to Landlord.
(b)If the entire Building shall be so taken by virtue of eminent domain, this Lease shall terminate on the date when title vests pursuant to such taking, and the Rent and other charges hereunder shall be apportioned as of said date, and any Rent paid for any period beyond said date shall be repaid to Tenant.
(c)If more than twenty percent (20%) of the floor area comprising the Premises shall be so taken, or if a portion of the Building or Development is taken which materially interferes with Tenant's use of the Premises, either party shall have the right to cancel and terminate this Lease as of the date of such taking, upon giving notice to the other party within thirty (30) days after notice to Tenant from Landlord or the condemning authority that such Premises are to be appropriated or taken. In the event that this Lease is not terminated as herein provided, this Lease shall continue, with an equitable and proportionate adjustment, effective on the date of taking, in Rent and other charges due hereunder based upon the reduction in floor area.
ARTICLE 23. ESTOPPEL CERTIFICATES
Tenant shall, at any time and from time to time, upon thirty (30) days written request by Landlord, execute, acknowledge and deliver to Landlord a statement in writing duly executed by Tenant (i) certifying that this Lease is in full force and effect without modification or amendment (or, if there have been any modifications or amendments, that this Lease is in full force and effect as modified and amended and setting forth in full all modifications and amendments), (ii) certifying the dates to which Base Rent and additional rent have been paid, and (iii) either certifying that to the knowledge of Tenant no default exists under this Lease or specifying each such default, and (iv) certifying such other matters as Landlord and/or any lender may reasonably request; it being the intention and agreement of Landlord and Tenant that any such statement by Tenant may be relied upon by a prospective purchaser or a prospective mortgagee of the Building, or current mortgagee of the Building, or by others, in any matter affecting the Premises.
ARTICLE 24. DEFAULT
The occurrence of any of the following events shall constitute a default by Tenant under this Lease:
(a)Failure of Tenant to take possession of the Premises within thirty (30) days following the Commencement Date;
(b)A failure by Tenant to pay any installment of Base Rent hereunder within seven (7) days after the due date or a failure to pay any such other sum herein required to be paid by Tenant within thirty (30) days after written notice thereof;
(c)An abandonment of the Premises by Tenant;
(d)An assignment of this Lease or subletting of the Premises in violation of this Lease;
(e)A failure by Tenant to pay, when due, any installment of Rent hereunder on two (2) or more occasions within any period of twelve (12) consecutive months;
(f)The failure by Tenant to maintain insurance as required by the provisions of Article 17 hereof;
(g)A failure by Tenant to observe and perform any other material provision or covenant of this Lease to be observed or performed by Tenant, where such failure continues for thirty (30) days after written notice thereof from Landlord to Tenant; or
(h)The filing of a petition by or against Tenant for adjudication as a bankrupt or insolvent or for reorganization or for the appointment pursuant to any local, state or federal bankruptcy or insolvency law of a receiver or trustee of Tenant's property; or an assignment by
Tenant for the benefit of creditors; or the taking possession of the property of Tenant by any local, state or federal governmental officer or agency or court-appointed official for the dissolution or liquidation of Tenant or for the operating, either temporary or permanently, of Tenant's business, provided, however, that if any such action is commenced against Tenant the same shall not constitute a default if Tenant causes the same to be dismissed within sixty (60) days after the filing of same.
ARTICLE 25. PROVISIONS RELATED TO LANDLORD'S REMEDIES
(a)Remedies. Upon the occurrence of any event of default set forth above and the expiration of any applicable notice and grace period, Landlord shall have the rights and remedies hereinafter set forth to the extent permitted by law, which shall be distinct, separate and cumulative with and in addition to any other right or remedy allowed under law or any other provision of this Lease:
(1)Landlord may terminate this Lease and Tenant's right of possession, reenter and repossess the Premises by detainer suit, summary proceedings or other lawful means, and recover from Tenant: (i) any unpaid Rent as of the termination date; (ii) the amount by which: (a) any unpaid Rent which would have accrued after the termination date during the balance of the term exceeds (b) the reasonable rental value of the Premises under a lease substantially similar to this Lease, taking into account among other things the condition of the Premises, market conditions and the period of time the Premises may reasonably remain vacant before Landlord is able to re-lease the same to a suitable replacement tenant, and Costs of Reletting (as defined in Paragraph (g) below) that Landlord may incur in order to enter such replacement lease, (iii) any other amounts necessary to compensate Landlord for all damages proximately caused by Tenant's failure to perform its obligations under this Lease, but excluding consequential, indirect or special damages. For purposes of computing the amount of rent herein that would have accrued after the termination date, Tenant's obligations for Real Estate Taxes and Operating Costs shall be projected based upon the average rate of increase in such items from the Commencement Date through the termination date (or if such period shall be less than three years, then based on Landlord's reasonable estimates). The amounts computed in accordance with the foregoing subclauses (a) and (b) shall both be discounted in accordance with accepted financial practice at the rate of four (4%) percent per annum to the then present value.
(2)Landlord may terminate Tenant's right of possession, reenter and repossess the Premises by detainer suit, summary proceedings or other lawful means, without terminating this Lease, and recover from Tenant: (i) any unpaid Rent as of the date possession is terminated, (ii) any unpaid rent which thereafter accrues during the term from the date possession is terminated through the time of judgment (or which may have accrued from the time of any earlier judgment obtained by Landlord), less any consideration received from replacement tenants as further described and applied pursuant to Paragraph (g) below, and (iii) any other amounts necessary to compensate Landlord for all damages proximately caused by Tenant's failure to perform its obligations under this Lease, including all Costs of Reletting, but excluding consequential, indirect or special damages. Tenant shall pay any such amounts to Landlord as the same accrue or after the same have accrued from time to time upon demand. At any time after terminating Tenant's right to possession as provided herein, Landlord may terminate this Lease as provided in clause (1) above by notice to Tenant, and Landlord may pursue such other remedies as may be available to Landlord under this Lease or applicable law.
(b)Reletting. If this Lease or Tenant's right to possession is terminated or Tenant abandons the Premises, Landlord may: (i) enter and secure the Premises, change the locks, install barricades, remove any improvements, fixtures or other property of Tenant therein, perform any decorating, remodeling, repairs, alterations, improvements or additions and take such other actions as Landlord shall determine in Landlord's sole discretion to prevent damage or deterioration to the Premises or prepare the same for reletting, and (ii) relet all or any portion of the Premises (separately or as part of a larger space), for any rent, use or period of time (which may extend beyond the term hereof), and upon any other terms as Landlord shall determine in Landlord's sole discretion, directly or as Tenant's agent. The consideration received from such reletting shall be applied pursuant to the terms of Paragraph (g) hereof, and if such consideration, as so applied, is not sufficient to cover all Rent and damages to which Landlord may be entitled hereunder, Tenant shall pay any deficiency to Landlord as the same accrues or after the same has accrued from time to time upon demand, subject to the other provisions hereof.
(c)Specific Performance. Landlord shall at all times have the right without prior demand or notice except as required by applicable law to: (i) seek any declaratory, injunctive or other equitable relief, and specifically enforce this Lease or restrain or enjoin a violation of any provision hereof, and Tenant hereby waives any right to require that Landlord post a bond or other security in connection therewith, and (ii) sue for and collect any unpaid Rent which has accrued.
(d)Returned Checks. If Landlord receives two (2) or more checks from Tenant which are returned by Tenant's bank for insufficient funds, Landlord may require that all checks thereafter be bank certified or cashier's checks (without limiting Landlord's other remedies). All bank service charges resulting from any returned checks shall be borne by Tenant.
(e)Landlord's Cure of Tenant Defaults. If Tenant fails to perform any obligation under this Lease for five (5) days after notice thereof by Landlord (except that no notice shall be required in emergencies), Landlord shall have the right (but not the duty), to perform such obligation on behalf and for the account of Tenant. In such event, Tenant shall reimburse Landlord upon demand, as additional rent, for all expenses reasonably incurred by Landlord in performing such obligation together with an amount equal to fifteen (15%) percent thereof for Landlord's overhead, and interest thereon at the Lease Interest Rate from the date of demand. Landlord's performance of Tenant's obligations hereunder shall not be deemed a waiver or release of Tenant therefrom.
(f)Intentionally Omitted.
(g)Other Matters. No re-entry or repossession, repairs, changes, alterations and additions, reletting, or any other action or omission by Landlord shall be construed as an election by Landlord to terminate this Lease or Tenant's right to possession, nor shall the same operate to release Tenant in whole or in part from any of Tenant's obligations hereunder, unless express notice of such intention is sent by Landlord to Tenant. Landlord may bring suits for amounts owed by Tenant hereunder or any portions thereof, as the same accrue or after the same have accrued, and no suit or recovery of any portion due hereunder shall be deemed a waiver of Landlord's right to collect all amounts to which Landlord is entitled hereunder, nor shall the same serve as any defense to any subsequent suit brought for any amount not therefor reduced to judgment. Landlord may pursue one or more remedies against Tenant and need not make an election of remedies except as required by applicable law. All rent and other consideration paid by any replacement tenants shall be applied at Landlord's option: (i) first, to the Costs of Reletting, (ii) second, to the payment of all costs of enforcing this Lease against Tenant or any guarantor, (iii) third, to the payment of all interest and service charges accruing hereunder, (iv) fourth, to the payment of Rent theretofore accrued, and (v) with the residue, if any, to be held by Landlord and applied to the payment of Rent and other obligations of Tenant as the same become due (and with any remaining residue to be retained by Landlord). “Costs of Reletting” shall include without limitation, all costs and expenses incurred by Landlord for any repairs or other matters described in Paragraph (b) above, brokerage commissions, advertising costs, attorneys' fees, any economic incentives given to enter leases with replacement tenants, and costs of collecting rent from replacement tenants. Landlord shall be under no obligation to observe or perform any provision of this Lease on its part to be observed or performed which accrues while Tenant is in default hereunder. The times set forth herein for the curing of defaults by Tenant are of the essence of this Lease.
ARTICLE 26. LANDLORD'S DEFAULT; RIGHT TO CURE
(a)If Landlord shall fail to perform any obligation under this Lease required to be performed by Landlord, Landlord shall not be deemed to be in default hereunder nor subject to any claims for damages of any kind, unless such failure shall have continued for a period of thirty (30) days after written notice thereof by Tenant (provided, if the nature of Landlord's failure is such that more time is reasonably required in order to cure, Landlord shall not be in default if Landlord commences to cure within such thirty (30) day period and thereafter diligently seeks to cure such failure to completion).
(b)Upon the occurrence of any event of default by Landlord after the expiration of any applicable cure and grace period, Tenant shall have all rights and remedies to the extent permitted by law or in equity, which be distinct, separate and cumulative to the extent permitted by law.
ARTICLE 27. WAIVER
The failure or delay on the part of Landlord or Tenant to enforce or exercise at any time any of the provisions, rights or remedies in the Lease shall in no way be construed to be a waiver thereof, nor in any way to affect the validity of this Lease or any part hereof, or the right of the Landlord or Tenant to thereafter enforce each and every such provision, right or remedy. No waiver of any breach of this Lease shall be held to be a waiver of any other or subsequent breach. The receipt by Landlord of lesser amount than the Rent due at a time when the rent is in default under this Lease shall not be construed as a waiver of such default. The receipt by Landlord of a lesser amount than the Rent due shall not be construed to be other than a payment on account of the Rent then due, nor shall any statement on Tenant's check or any letter accompanying Tenant's check be deemed an accord and satisfaction and Landlord may accept such payment without prejudice to Landlord's right to recover the balance of the rent due or to pursue any other remedies provided in this Lease. No act or thing done by Landlord or Landlord's agents or employees during the term of this Lease shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept such a surrender shall be valid unless in writing and signed by Landlord.
ARTICLE 28. UTILITY DEREGULATION
Landlord has advised Tenant that various utility companies (each to be referred to herein as a “Current Service Provider”) are the utility companies selected by Landlord to provide service for the Development. Notwithstanding the foregoing, if permitted by law, Landlord shall have the right at any time and from time to time during the term of this Lease to either contract for service from a different company or companies providing service (each such company shall hereinafter be referred to as an “Alternate Service Provider”) or continue to contract for service from the Current Service Provider.
Tenant shall cooperate with Landlord, the Current Service Providers, and any Alternate Service Provider as reasonably necessary, and shall allow Landlord, the Current Service Providers, and any Alternate Service Provider reasonable access to the Building's lines, feeders, risers, wiring, and other machinery within the Premises.
Unless caused by the willful misconduct or negligence of Landlord, its agents or employees, Landlord shall in no way be liable or responsible for any loss, damage, or expense that Tenant may sustain or incur by reason of any failure, interference, disruption, or defect in the supply of utility services furnished to the Premises, or of any change in the quality or character of the utility services supplied by
the Current Service Providers or any Alternate Service Provider, and no such change, failure, defect, unavailability, or unsuitability shall constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of rent, or relieve Tenant from any of its obligations under this Lease.
ARTICLE 29. TELECOMMUNICATIONS
(a)Telephone Lines. Subject to Landlord's continuing right of supervision and approval (not to be unreasonably withheld), and the other provisions hereof, Landlord shall: (i) install telephone lines (“Lines”) connecting the Premises to Landlord's terminal block on the floor or floors on which the Premises are located, or (ii) use such Lines as may currently exist and already connect the Premises to such terminal block. Landlord's predecessor or independent contractor has heretofore connected such terminal block through riser system Lines to Landlord's main distribution frame (“MDF”) for the Property. Landlord disclaims any representations, warranties or understandings concerning the capacity, design or suitability of Landlord's riser Lines, MDF or related equipment. If there is, or will be, more than one tenant on any floor, at any time, Landlord may allocate, and periodically reallocate, connections to the terminal block based on the proportion of square feet each tenant occupies on such floor, or the type of business operations or requirements of such tenants, in Landlord's reasonable discretion. Landlord may arrange for an independent contractor to review Tenant's request for approval hereunder, monitor or supervise Tenant's installation, connection and disconnection of Lines, and provide other such services, or Landlord may provide the same.
(b)Installation. Landlord shall install Tenant's Lines and make connections and disconnection at the terminal blocks as described above, and Landlord shall use an experienced and qualified contractor.
(c)Limitation of Liability. Unless due solely to Landlord's intentional misconduct or negligent acts, Landlord shall have no liability for damages arising, and Landlord does not warrant that the Tenant's use of the Lines will be free, from the following (collectively called “Line Problems”): (i) any eavesdropping, wire-tapping or theft of long distance access codes by unauthorized parties, (ii) any failure of the Lines to satisfy Tenant's requirements, or (iii) any capacitance, attenuation, cross-talk or other problems with the Lines, any misdesignation of the Lines in the MDF room or wire closets, or any shortages, failures, variations, interruptions, disconnections, loss or damage caused by or in connection with the installation, maintenance, replacement, use or removal of any other Lines or equipment at the Development by or for other tenants at the Development, by any failure of the environmental conditions at or the power supply for the Development to conform to any requirements of the Lines or any other problems associated with any Lines or by any other cause. Unless due solely to Landlord's willful misconduct or negligent acts, under no circumstances shall any Line Problems be deemed an actual or constructive eviction of Tenant, render Landlord liable to Tenant for abatement of any rent or other charges under the Lease, or relieve Tenant from performance of Tenant's obligations under the Lease. Landlord in no event shall be liable for damages by reason of loss of profits, business interruption or other consequential damage arising from any Line Problems.
ARTICLE 30. SURRENDER
The Lease shall terminate and Tenant shall deliver up and surrender possession of the Premises on the last day of the term hereof, and Tenant waives the right to any notice of termination or notice to quit and Tenant hereby waives all right to any such notice as may be provided under any laws now or hereafter in effect in Pennsylvania, including but not limited to the Landlord and Tenant Act of 1951, as amended. Tenant covenants that upon the expiration or sooner termination of this Lease Tenant shall deliver up and surrender possession of the Premises in the same condition in which Tenant has agreed to keep the same during the continuance of this Lease and in accordance with the terms hereof, ordinary wear and tear and damage from casualty or condemnation excepted.
ARTICLE 31. QUIET ENJOYMENT
Landlord covenants and agrees that Tenant, upon paying the Rent herein provided for and observing and keeping the covenants, agreements and conditions on its part to be kept, shall lawfully and quietly hold, occupy and enjoy the Premises during the Lease without hindrance or interruption by Landlord or anyone claiming by, through or under Landlord.
ARTICLE 32. HOLDING OVER
Unless Landlord expressly agrees otherwise in writing, Tenant shall pay Landlord 150% of the amount of Rent then applicable prorated on a per diem basis for each day Tenant shall fail to vacate or surrender possession of the Premises or any part thereof after expiration or earlier termination of this Lease as required under Article 30, together with all damages sustained by Landlord on account thereof. Tenant shall pay such amounts on demand, and, in the absence of demand, monthly in advance. The foregoing provisions, and Landlord's acceptance of any such amounts, shall not serve as permission for Tenant to hold-over, nor serve to extend the term (although Tenant shall remain a tenant at sufferance bound to comply with all provisions of this Lease until Tenant properly vacates the Premises.
ARTICLE 33. ENVIRONMENTAL COVENANTS, REPRESENTATIONS AND WARRANTIES
(a)Tenant shall comply with all laws, regulations, ordinances and other governmental standards applicable to Tenant's use of the Premises with respect to hazardous waste, hazardous substances and any and all other environmental matters. Furthermore, Tenant shall procure and maintain all licenses and permits required by such applicable laws, ordinances or regulations. Tenant covenants and agrees that it shall not release, emit, or discharge at or from the Premises any hazardous or toxic substances consisting of any hazardous or toxic chemical, waste, byproduct, pollutants, contamination, compound, product or substance, including, without limitation, asbestos, polychlorinated byphenyls, petroleum (including crude oil or any fraction thereof), and any material the exposure to, or manufacture, possession, presence, use, generation, storage, transportation, treatment, release, disposal, abatement, cleanup, removal, remediation or handling of which, is prohibited, controlled or regulated by federal, state, regional, county, local, governmental, public or private statute, law, regulation, ordinance, order, consent decree, judgment, permit, license, code, covenant, deed restrictions, common law, treaty, convention or other requirement, pertaining to protection of the environmental, health or safety of persons, natural resources, conservation, wildlife, waste management, any hazardous material activity, and pollution (including, without limitation, regulation of releases and disposals to air, land, water and ground water). These requirements include, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. 9601 et seq., Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. 6901 et seq., Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. 1251, et seq., Clean Air Act of 1966, as amended, 42 U.S.C. 7401 et seq., Toxic Substances Control Act of 1976, 15 U.S.C. 2601 et seq., Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. 651 et seq., Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. 11001 et seq., National Environmental Policy Act of 1975, 42 U.S.C. 300(f) et seq., and any similar or implementing Pennsylvania laws, and all amendments, rules, regulations, guidance documents and publications promulgated thereunder.
(b)In the event Tenant receives any notice of the happening of: (l) any event arising from Tenant's use or occupancy of the Premises involving an emission, spill, release or discharge at or from the Premises into or upon (i) the air; (ii) soils (whether on the Premises or neighboring property) or any improvements located thereon; (iii) surface water or ground water; (iv) the sewer system servicing the Premises, except as allowed under current law, regulation or permit, of any regulated quantities of toxic or hazardous substances or wastes (intended hereby and hereafter to include any and all such materials listed in any federal, state or local law, code and ordinances and all rules and regulations promulgated thereunder, as hazardous) (any of which is hereinafter referred to as “Hazardous Discharge”); or (2) any complaint, order, directive, claim, citation or notice by any governmental authority or any other person or entity arising from Tenant's use or occupancy of the Premises with respect to (i) air emissions; (ii) spills, releases or discharges to soils or any improvements located thereon, surface water, ground water or the sewer, septic system or waste treatment, storage or disposal system servicing the Premises; (iii) solid or liquid waste disposal; (iv) the use, generation, storage, transportation or disposal of toxic or hazardous substances or wastes; or (v) any other environmental, health or safety matter relating to any of Tenant's activity upon the Premises, including any improvements located thereon or neighboring property (any of which is hereinafter referred to as an “Environmental Complaint”), then Tenant shall give immediate notice of same to Landlord, detailing all relevant facts and circumstances. Tenant shall, upon receipt of notice of a Hazardous Discharge or Environmental Complaint, and at its sole cost and expense, promptly and completely take all actions necessary to remove, resolve or minimize the impact of such Hazardous Discharge or Environmental Complaint on or from the Premises, and restore the affected property to its prior condition.
Without limitation on the foregoing, and in the event Tenant fails to take the actions set forth herein, Landlord shall have the right, but not the obligation, to enter onto the Premises and take any actions as it deems necessary or advisable to clean up, remove, resolve or minimize the impact or otherwise deal with any Hazardous Discharge or Environmental Complaint upon Landlord's receipt of any notice from any person or entity asserting the happening of a Hazardous Discharge or Environmental Complaint on or from or pertaining to the Premises and arising from Tenant's use or occupancy of the Premises. All reasonable costs and expenses incurred by
Landlord in the exercise of any such rights shall be deemed to be additional rent hereunder and shall be immediately payable by Tenant to Landlord upon demand.
(c)Tenant, its successors and assigns, shall forever indemnify, defend and hold harmless Landlord, its partners, members, directors, officers, employees and agents, and successors and assigns from and against all damages, punitive damages, liabilities, losses, demands, claims, cost recovery actions, lawsuit, administrative proceedings, orders, response costs, compliance costs, investigation expenses, consultant fees, attorneys' fees and litigation expenses, arising from Tenant's use of the Premises, including (1) possession, use and storage of any hazardous material at the Premises; (2) the operation of any applicable environmental law against the Tenant, Landlord or the Premises, based on Tenant's activities during the term of this Lease; or (3) the violation at the Premises or by the Tenant of any applicable environmental law. Tenant and its successors or assigns shall pay all costs and expenses incurred by Landlord, its successors and assigns, to enforce the provisions of this indemnification, including, without limitation, reasonable attorneys' fees and litigation expenses. This indemnification shall survive the termination of this Lease.
(d)As between Landlord and Tenant, Landlord shall be responsible for (i) the remediation of any hazardous materials or substances located on the Development, the Building, or any part thereof (including the Premises), existing as of the Commencement Date (except to the extent caused by Tenant or its agents, employees or contractors), (ii) any violations of environmental laws existing as of the Commencement Date (except to the extent caused by Tenant or its agents, employees or contractors), (iii) the remediation of any hazardous materials or substances located on the Development, the Building, or any part thereof (including the Premises), existing as of the Commencement Date after the Commencement Date to the extent caused by Landlord or its agents, employees or contractors, or (iv) any violations of environmental laws arising on or after the Commencement Date to the extent caused by Landlord or its agents, employees or contractors.
(e)Landlord represents and warrants to Tenant, to the best of its knowledge, as of the Commencement Date, it has received no written notice from any applicable governmental authority regarding the existence of hazardous materials on or about the Premises or the Development.
ARTICLE 34. TENANT'S COMPLIANCE WITH LAWS
Tenant shall comply with all governmental laws, ordinances and regulations applicable to Tenant's occupancy and use of the Premises.
ARTICLE 35. DISABILITIES ACT
Tenant shall comply, at Tenant's sole cost and expense, with the Americans with Disabilities Act of 1990 and similar state and local laws and ordinances, as well as all regulations issued thereunder, but only if the need for compliance is caused in whole or material part by reason of the specific nature of Tenant's business operations in the Premises or specific accommodation to Tenant's employees. Except as set forth in the preceding sentence, Landlord shall cause the common areas of the Development to comply, at Landlord's sole cost, or at another tenant's sole cost, or as an Operating Cost subject to pass-through hereunder, with the Americans with Disabilities Act of 1990 and similar state and local laws and ordinances, as well as all regulations issued thereunder. Tenant shall promptly advise Landlord in writing, and provide Landlord with copies of any notice received by Tenant alleging violation of any such law, regulation or ordinance relating to the Premises or the Building or any use thereof or activity therein, or any governmental or regulatory action or investigation instituted or threatened regarding noncompliance with any such law, regulation or ordinance.
ARTICLE 36. NOTICE
Wherever in this Lease it shall be required or permitted that notice or demand be given or served by either party to this Lease to or on the other party, such notice or demand shall be deemed to have been duly given or served if in writing and either personally served or forwarded by Federal Express or comparable delivery service or by registered or certified mail, charges prepaid, and addressed as set forth in Article 1 to the applicable Notification Addresses.
Each such mailed notice shall be deemed to have been given to or served upon the party to which addressed (i) on the date of delivery if personally served, (ii) one business day after the date the same is deposited with the express service, or (iii) three business days after the date the same is deposited with the postal service, properly addressed in the manner above provided. Either party hereto may change the address to which such notices shall be delivered or mailed by giving written notice of such change to the other party hereto, as herein provided.
ARTICLE 37. BROKERS
Each party represents and warrants to the other that TARQUINCoRE, LLC has acted as the only broker or agent in connection with the finding and negotiation of this Lease. Landlord shall be responsible for payment of commissions or fees due such brokers in accordance with the terms of Landlord's written listing agreement with such agent. Each party agrees to indemnify and hold harmless the other from and against any claims, suits, liabilities and expenses incurred by or assessed by reason of any undisclosed brokerage or agency arrangement.
ARTICLE 38. FORCE MAJEURE
Neither party shall be required to perform any term, condition or covenant of this Lease as long as such performance is delayed or prevented by force majeure, which shall mean Acts of God, strikes, lockouts, material or labor restrictions imposed by governmental authority, civil riot, floods and other causes not reasonably within the control of such party and which, by the exercise of due diligence, such party is unable, wholly or in part, to prevent or overcome; provided, however, that such party shall be required to commence and thereafter diligently prosecute performance of completion to the extent reasonably permitted under the circumstances. Notwithstanding anything herein to the contrary, the foregoing shall not excuse either party from the payment of any monies due pursuant to the terms of this Lease.
ARTICLE 39. TRANSFER OF LANDLORD'S INTEREST
Landlord's obligations hereunder shall be binding upon Landlord only for the period of time that Landlord is in ownership of the Building; and, upon termination of that ownership, Tenant, except as to any obligations which have then matured or relate to an event occurring prior to the transfer, any breach occurring prior to the transfer, or any tort or fraud committed prior to the transfer, shall look solely to Landlord's successor in interest in the Building for the satisfaction of each and every obligation of Landlord hereunder. Tenant agrees to attorn to any transferee of Landlord.
ARTICLE 40. SUCCESSORS
The respective rights and obligations provided in this Lease shall bind and shall inure to the benefit of the parties hereto and their respective successors and assigns, provided, however, that no rights shall inure to the benefit of any successors of Tenant whenever, by the express terms of this Lease, Landlord's written consent for the transfer to such successor is required under Article 14 hereof, unless Landlord shall have granted such consent.
ARTICLE 41. GOVERNING LAW
This Lease shall be construed, governed and enforced in accordance with the laws of the Commonwealth of Pennsylvania and the exclusive venue for any action shall be in the Court of Common Pleas of Allegheny County, Pennsylvania.
ARTICLE 42. SEPARABILITY
If any provisions of this Lease shall be held to be invalid, void or unenforceable, the remaining provisions hereof shall in no way be affected or impaired and such remaining provisions shall remain in full force and effect.
ARTICLE 43. CAPTIONS
Any headings preceding the text of the several paragraphs and subparagraphs hereof are inserted solely for convenience of reference and shall not constitute a part of this Lease, nor shall they affect its meaning, construction or effect.
ARTICLE 44. GENDER
As used in this Lease, the word “person” shall mean and include, where appropriate, any individual, corporation, partnership or other entity; the plural shall be substituted for the singular, and the singular for the plural, where appropriate; and words of any gender shall mean to include any other gender.
ARTICLE 45. EXECUTION; COUNTERPARTS
This Lease shall become effective when it has been signed by a duly authorized officer or representative of each of the parties and delivered to the other party. This Lease may be executed in any number of counterparts, each of which when taken together shall be deemed to be one and the same instrument. The parties acknowledge and agree that notwithstanding any law or presumption to the contrary, the exchange of copies of this Lease and signature pages by electronic transmission shall constitute effective execution and delivery of this Lease for all purposes, and signatures of the parties hereto transmitted electronically shall be deemed to be their original signature for all purposes.
ARTICLE 46. ENTIRE AGREEMENT
This Lease, including the Exhibits hereto, contains all the agreements, conditions, understandings, representations and warranties made between the parties hereto with respect to the subject matter hereof, and may not be modified orally or in any manner other than by an agreement in writing signed by both parties hereto or their respective successors in interest.
ARTICLE 47. AUTHORITY
If Tenant is a corporation, association, partnership or similar legal entity, the Tenant represents and warrants that the individual signing this Lease is duly authorized to execute and deliver this Lease on behalf of such entity in accordance with the duly adopted authorizing instruments of such entity which have been adopted or approved in accordance with all legal requirements and the internal bylaws, agreements, or other organizing documents of the entity, and that this Lease is binding upon such entity in accordance with its terms.
If Landlord is a corporation, association, partnership or similar legal entity, The Landlord represents and warrants that the individual signing this Lease is duly authorized to execute and deliver this Lease on behalf of such entity in accordance with the duly adopted authorizing instruments of such entity which have been adopted or approved in accordance with all legal requirements and the internal bylaws, agreements, or other organizing documents of the entity, and that this Lease is binding upon such entity in accordance with its terms.
ARTICLE 48. SECURITY DEPOSIT
Upon execution of this Lease, Tenant shall deposit with Landlord the Security Deposit in the amount set forth in Article 1. The Security Deposit shall be held by Landlord as security for the full and faithful performance by Tenant of all of the terms, covenants and provisions of this Lease during the term hereof. In no event shall Landlord be obligated to pay, or Tenant is entitled to receive, any interest or other earnings on the security deposit. Landlord shall not be obligated to hold the Security Deposit in trust or in a separate account but may freely commingle the security deposit with Landlord's other funds.
In the event Tenant fails to keep and perform any of the terms, covenants or provisions of this Lease, then Landlord, at Landlord's option, may appropriate and apply the Security Deposit, or so much thereof as may be necessary to pay any Rent or other sums due hereunder for which Tenant shall be in default of payment. Tenant, upon notice from Landlord, immediately shall remit to Landlord an amount sufficient to restore this Security Deposit to the amount required to be maintained in accordance with this Article. Upon Tenant's full and complete performance and compliance with all of the terms, covenants and provisions of this Lease during the lease term, upon the expiration of the term and Tenant's proper surrender of the Premises, the Security Deposit shall be returned to Tenant.
In the event of a sale of the Building, Landlord may deliver the Security Deposit to the purchaser, and upon such delivery, Landlord shall be discharged from any further liability with respect to the Security Deposit.
ARTICLE 49. OFAC CERTIFICATION
Tenant certifies that: (i) it is not acting, directly or indirectly, for or on behalf of any person, group, entity, or nation named by any Executive Order or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or other banned or blocked person, entity, nation, or transaction pursuant to any law, order, rule, or regulation that is enforced or administered by the Office of Foreign Assets Control; and (ii) it is not engaged in this transaction, directly or indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly on behalf of, any such person, group, entity, or nation.
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IN WITNESS WHEREOF, the parties, intending to be legally bound, have executed this Lease as of the day and year first written above.
ATTEST: | | COGNITION THERAPEUTICS, INC. | ||
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| | By: | /s/ Harold Safferstein | |
| | | Name: | Harold Safferstein |
| | | Title | SVP |
ATTEST | | | ||
| | RJ EQUITIES LP | ||
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| | By: | RD Equities, LLC, its General Partner | |
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Anita Marcocci | | | ||
| | By: | /s/ Ronald J. Tarquinio | |
| | | Name: | Ronald J. Tarquinio |
| | | Title | Member |
Exhibit “A”
Diagram of Development
Exhibit “B”
Outline of Premises
Exhibit “C”
Rules and Regulations
GENERAL:
1. | OBSTRUCTIONS: |
The streets, driveways, parking lots, sidewalks, entrances, passages and other common areas provided by Landlord shall not be obstructed by Tenant, its employees, agents, representatives, vendors and guests or used for any other purpose than ingress and egress.
2. | BATHROOMS: |
The bathrooms, toilet rooms and other plumbing apparatus shall not be used for any other purposes other than those for which they are constructed.
3. | GENERAL PROHIBITIONS: |
· | No cooking, grilling, smoking, gas or other type of flame in the common areas; |
· | No animals or birds are permitted anywhere on the premises; |
· | No use of the premises as sleeping rooms; |
· | No loitering or congregating in the entrances or hallways; |
· | No making improper loud noises or disturbances of any kind; |
· | Doing anything to unreasonably disturb or disrupt other tenants in the complex; |
· | Doing anything to change, damage or destroy the landscaping around the premises; |
4. | SMOKING: |
The complex's buildings are maintained as smoke free environments. This means no smoking in the building. Smoking is permitted outside of the buildings where several smoking boxes are provided in four designated areas for cigarette butts. Please use the smoking boxes for your butts, not the grounds or parking areas.
5. | DOORS: |
Exterior doors are not to be held open. Holding or propping these doors open for 30 seconds or more will sound off an alarm and automatically notify police.
PARKING:
To insure that adequate parking spaces are available for our tenants, a specific number of parking passes are provided to each tenant for a specific parking zone. The passes are to be placed on the rear view mirror of each vehicle and can be transferred from one vehicle to another. The parking lots are patrolled daily. Vehicles that lack a parking pass or are parked in the wrong zone will be considered in violation of the parking regulations. Violations are handled as follows:
First Violation: | A yellow sticker will be placed under the windshield wiper; |
Second Violation: | An adhesive yellow sticker will be placed on the windshield; |
Third Violation: | The police will be called and the car will be towed, at the owner's expense. |
These rules and regulations are subject to change from time to time at the discretion of the Landlord.
Exhibit “D”
Intentionally Omitted
Exhibit “E”
ESTOPPEL CERTIFICATE
{See Attached Form of Estoppel}
EXHIBIT “F”
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
{See Attached Form of SNDA}
FIRST AMENDMENT TO OFFICE LEASE AGREEMENT
This First Amendment to Office Lease Agreement (“Amendment”) is made this 1st day of July, 2017, and is by and between RJ EQUITIES LP, a Pennsylvania limited partnership (“Landlord”), and COGNITION THERAPEUTICS, INC., a Delaware corporation (“Tenant”).
ARTICLE I - AMENDMENT OF BASIC TERMS
The parties, intending to be legally bound, do hereby agree to the amendment, ratification and restatement of certain terms of the Lease (as defined below) as follows:
a) | Lease: | That certain Office Lease Agreement dated January 20, 2015, as amended by this Amendment. |
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b) | Premises: | Suites 261, 263, and certain shared lab space all of which is located on the second floor of the commercial building (the “Building”) situated at 2403 Sidney Street, Pittsburgh, PA 15203 (the “Development”), and all as more particularly described in the Lease. |
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c) | Term: | The term of the Lease is hereby extended from February l, 2018, until June 30, 2020 (the “Extended Term”). Any reference in the Lease to the Termination Date shall hereafter mean June 30, 2020. |
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d) | Base Rent: | Base Rent during the Extended Term shall be Seven Thousand One Hundred Three and 17/100ths Dollars ($7,103.17) per month. |
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e) | Options: | The parties hereby acknowledge and agree that Article 3(c) of the Lease is hereby deleted in its entirety—the intent being that Tenant shall have no further extension options to extend the term of the Lease. |
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f) | Defaults: | The parties acknowledge and agree that the following shall constitute a default under the Lease: “a default or breach by Tenant beyond the expiration of applicable notice and/or cure periods under any other lease with Landlord in connection with the Building”. |
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g) | Sublease: | Landlord has consented to the subleasing by Tenant, as sublessor, to Sharp Edge Labs, Inc. (the “Sublessee”) of a portion of the lab space comprising the Premises, upon the condition that neither anything contained in the sublease nor Landlord's consent thereto shall (i) release Tenant from any of its liabilities and obligations to Landlord under the Lease, (ii) constitute a novation, (iii) increase or modify Landlord's obligations under the Lease, or (iv) create any rights or remedies in Sublessee under the Lease itself. It is understood and agreed that Landlord shall have no obligation or liability under the terms of the sublease. |
ARTICLE II - TENANT REPRESENTATION
By the execution of this Amendment, Tenant represents and warrants to Landlord as follows as of the date hereof:
a) | That the Lease is in full force and effect and that, to Tenant's knowledge, there are no Landlord defaults and that the Lease has not been assigned, modified, supplemented or amended (except as expressly set forth above). |
b) | That there are no defenses or offsets against the Landlord's enforcement of the Lease that may be claimed by Tenant. |
ARTICLE III - MISCELLANEOUS
a) | Landlord and Tenant each represents and warrants to the other that it has had no dealings, negotiations or consultations with respect to the Premises, this Amendment or the transactions contemplated under the Lease with any broker or finder, except that Landlord was represented by TARQUINCoRE LLC (the “Broker”). Landlord shall pay all commissions and fees, if any, due to Broker in connection with this Amendment. |
b) | Except as expressly modified by this Amendment, all other terms and provisions of the Lease shall remain in full force and effect. Tenant accepts the Premises in its current “asis, where-is” condition. All capitalized terms used herein shall have the meaning ascribed to such term in the Lease unless otherwise defined herein. This Amendment supersedes any prior discussions, proposals, negotiations and discussions between the parties and the Lease, as amended hereby, contains all of the agreements, conditions, understandings, representations and warranties made between the parties hereto with respect to the subject matter hereof. |
c) | This Amendment may be executed in any number of counterparts, each of which when taken together shall be deemed to be one and the same instrument. The parties acknowledge and agree that notwithstanding any law or presumption to the contrary, the exchange of copies of this Amendment and signature pages by electronic transmission shall constitute effective execution and delivery of this Amendment for all purposes, and signatures of the parties hereto transmitted electronically shall be deemed to be their original signature for all purposes. |
d) | Landlord and Tenant each represents and warrants to the other that the individual signing this Amendment on behalf of such party is duly authorized to execute and deliver this Amendment on behalf of such entity in accordance with the duly adopted authorizing instruments of such entity which have been adopted or approved in accordance with all legal requirements and the internal bylaws, agreements, or other organizing documents of the entity, and that this Amendment is binding upon such entity in accordance with its terms. |
e) | Each party shall indemnify and hold the other harmless from and against all liability, cost and expense, including attorney's fees and court costs, arising out of any misrepresentation or breach of warranty made in this Amendment. |
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Witness the due execution of this Amendment the date first set forth above.
ATTEST: | | COGNITION THERAPEUTICS, INC. | ||
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Anita Marcocci | | By: | /s/ Harold Safferstein | |
| | | Name: | Harold Safferstein |
| | | Title: | SVP |
WITNESS: | | | ||
| | RJ EQUITIES LP | ||
| | | ||
| | By: | RD Equities, LLC, its General Partner | |
| | | ||
Anita Marcocci | | | ||
| | By: | /s/ Ronald J. Tarquinio | |
| | | Name: | Ronald J. Tarquinio |
| | | Title: | Managing Member |
SECOND AMENDMENT TO OFFICE LEASE AGREEMENT
This Second Amendment to Office Lease Agreement (“Amendment”) is made this 20 day of December, 2019, and is by and between RJ EQUITIES LP, a Pennsylvania limited partnership (“Landlord”), and COGNITION THERAPEUTICS, INC., a Delaware corporation (“Tenant”).
ARTICLE I - AMENDMENT OF BASIC TERMS
The parties, intending to be legally bound, do hereby agree to the amendment, ratification and restatement of certain terms of the Lease (as defined below) as follows:
a) | Lease: | That certain Office Lease Agreement dated January 20, 2015, as amended by that certain First Amendment to Office Lease Agreement dated July l, 2017, and by this Amendment. |
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b) | Premises: | Suites 261, 263, and certain shared lab space all of which is located on the second floor of the commercial building (the “Building”) situated at 2403 Sidney Street, Pittsburgh, PA 15203, and all as more particularly described in the Lease. |
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c) | Term: | The term of the Lease is hereby further extended from July l, 2020, until June 30, 2023 (the “Second Extended Term”). Any reference in the Lease to the Termination Date shall hereafter mean June 30, 2023. Tenant acknowledges and agrees that it has no further options or rights to extend the term of the Lease. |
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d) | Base Rent: | Base Rent during the Seconded Extended Term shall be Eighty-Five Thousand Two Hundred Thirty-Eight and 04/100ths Dollars ($85,238.04) per annum, payable in equal monthly installments of Seven Thousand One Hundred Three and 17/100ths Dollars ($7,103.17). |
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e) | Base Year: | During the Second Extended Term, the Base Year for Real Estate Taxes and Operating Costs shall remain the year 2009. |
ARTICLE II - TENANT REPRESENTATIONS
By the execution of this Amendment, Tenant represents and warrants to Landlord as follows as of the date hereof:
a) | That the Lease is in full force and effect and that, to Tenant's knowledge, there are no Landlord defaults and that the Lease has not been assigned, modified, supplemented or amended (except as expressly set forth above). |
b) | That there are no defenses or offsets against the Landlord's enforcement of the Lease that may be claimed by Tenant. |
ARTICLE III - MISCELLANEOUS
a) | Landlord and Tenant each represents and warrants to the other that it has had no dealings, negotiations or consultations with respect to the Premises, this Amendment or the transactions contemplated under the Lease with any broker or finder, except that Landlord was represented by TARQUINCoRE LLC (the “Broker”). Landlord shall pay all commissions and fees, if any, due to Broker in connection with this Amendment. |
b) | Except as expressly modified by this Amendment, all other terms and provisions of the Lease shall remain in full force and effect. Tenant accepts the Premises in its current “as-is, where-is” condition. All capitalized terms used herein shall have the meaning ascribed to such term in the Lease unless otherwise defined herein. This Amendment supersedes any prior discussions, proposals, negotiations and discussions between the parties and the Lease, as amended hereby, contains all of the agreements, conditions, understandings, representations and warranties made between the parties hereto with respect to the subject matter hereof. |
c) | This Amendment may be executed in any number of counterparts, cach of which when taken together shall be deemed to be one and the same instrument. The parties acknowledge and agree that notwithstanding any law or presumption to the contrary, the exchange of copies of this Amendment and signature pages by electronic transmission shall constitute effective execution and delivery of this Amendment for all purposes, and signatures of the parties hereto transmitted electronically shall be deemed to be their original signature for all purposes. |
d) | Landlord and Tenant each represents and warrants to the other that the individual signing this Amendment on behalf of such party is duly authorized to execute and deliver this Amendment on behalf of such entity in accordance with the duly adopted authorizing instruments of such entity which have been adopted or approved in accordance with all legal requirements and the internal bylaws, agreements, or other organizing documents of the entity, and that this Amendment is binding upon such entity in accordance with its terms. |
e) | Each party shall indemnify and hold the other harmless from and against all liability, cost and expense, including attorney's fees and court costs, arising out of any misrepresentation or breach of warranty made in this Amendment. |
Witness the due execution of this Amendment the date first set forth above.
ATTEST: | | COGNITION THERAPEUTICS, INC. | ||
| | | ||
| | | ||
| | By: | /s/ James O’Brien | |
| | | Name: | James O’Brien |
| | | Title: | CFO |
WITNESS | | | ||
| | RJ EQUITIES LP | ||
| | | ||
| | By: | RD Equities, LLC, its General Partner | |
| | | ||
Anita Marcocci | | | ||
| | By: | /s/ Ronald J. Tarquinio | |
| | | Name: | Ronald J. Tarquinio |
| | | Title: | Managing Member |
THIRD AMENDMENT TO OFFICE LEASE AGREEMENT
This Third Amendment to Office Lease Agreement (“Amendment”) is made this 31st day of August, 2022, and is by and between RJ EQUITIES LP, a Pennsylvania limited partnership (“Landlord”), and COGNITION THERAPEUTICS, INC., a Delaware corporation (“Tenant”).
ARTICLE I - AMENDMENT OF BASIC TERMS
The parties, intending to be legally bound, do hereby agree to the amendment, ratification and restatement of certain terms of the Lease (as defined below) as follows:
a) | Lease: | That certain Office Lease Agreement dated January 20, 2015, as amended by: (i) that certain First Amendment to Office Lease Agreement dated July l, 2017, (ii) that certain Second Amendment to Office Lease Agreement dated December 20, 2019, and (iii) this Amendment. |
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b) | Premises: | Suites 261, 263, and certain shared lab space all of which is located on the second floor of the commercial building (the “Building”) situated at 2403 Sidney Street, Pittsburgh, PA 15203, and all as more particularly described in the Lease. |
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c) | Term: | The term of the Lease is hereby further extended from July l, 2023, until June 30, 2026 (the “Third Extended Term”). Any reference in the Lease to the Termination Date shall hereafter mean June 30, 2026. Tenant acknowledges and agrees that it has no further options or rights to extend the term of the Lease. |
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d) | Base Rent: | Base Rent during the Third Extended Term shall be Eighty-Five Thousand Two Hundred Thirty-Eight and 04/100ths Dollars ($85,238.04) per annum, payable in equal monthly installments of Seven Thousand One Hundred Three and 17/100ths Dollars ($7,103.17). |
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e) | Base Year: | During the Third Extended Term, the Base Year for Real Estate Taxes and Operating Costs shall remain the year 2009. |
ARTICLE II - TENANT REPRESENTATIONS
By the execution of this Amendment, Tenant represents and warrants to Landlord as follows as of the date hereof:
a) | That the Lease is in full force and effect and that, to Tenant's knowledge, there are no Landlord defaults and that the Lease has not been assigned, modified, supplemented or amended (except as expressly set forth above). |
b) | That there are no defenses or offsets against the Landlord's enforcement of the Lease that may be claimed by Tenant. |
ARTICLE III - MISCELLANEOUS
a) | Landlord and Tenant each represents and warrants to the other that it has had no dealings, negotiations or consultations with respect to the Premises, this Amendment or the transactions contemplated under the Lease with any broker or finder, except that Landlord was represented by TARQUINCoRE LLC (the “Broker”). Landlord shall pay all commissions and fees, if any, due to Broker in connection with this Amendment. |
b) | Except as expressly modified by this Amendment, all other terms and provisions of the Lease shall remain in full force and effect. Tenant accepts the Premises in its current “asis, where-is” condition. All capitalized terms used herein shall have the meaning ascribed to such term in the Lease unless otherwise defined herein. This Amendment supersedes any prior discussions, proposals, negotiations and discussions between the parties and the Lease, as amended hereby, contains all of the agreements, conditions, understandings, representations and warranties made between the parties hereto with respect to the subject matter hereof. |
c) | This Amendment may be executed in any number of counterparts, each of which when taken together shall be deemed to be one and the same instrument. The parties acknowledge and agree that notwithstanding any law or presumption to the contrary, the exchange of copies of this Amendment and signature pages by electronic transmission shall constitute effective execution and delivery of this Amendment for all purposes, and signatures of the parties hereto transmitted electronically shall be deemed to be their original signature for all purposes. |
d) | Landlord and Tenant each represents and warrants to the other that the individual signing this Amendment on behalf of such party is duly authorized to execute and deliver this Amendment on behalf of such entity in accordance with the duly adopted authorizing instruments of such entity which have been adopted or approved in accordance with all legal requirements and the internal bylaws, agreements, or other organizing documents of the entity, and that this Amendment is binding upon such entity in accordance with its terms. |
e) | Each party shall indemnify and hold the other harmless from and against all liability, cost and expense, including attorneys fees and court costs, arising out of any misrepresentation or breach of warranty made in this Amendment. |
Witness the due execution of this Amendment the date first set forth above.
ATTEST: | | COGNITION THERAPEUTICS, INC. | ||
| | | ||
| | | ||
| | By: | /s/ Lisa Ricciardi | |
| | | Name: | LISA RICCIARDI |
| | | Title: | President/CEO |
WITNESS: | | | ||
| | RJ EQUITIES LP | ||
| | | ||
| | By: | RD Equities, LLC, its General Partner | |
| | | ||
Jennifer Tarquinio | | | ||
| | By: | /s/ Ronald J. Tarquinio | |
| | | Name: | Ronald J. Tarquinio |
| | | Title: | Managing Member |
FOURTH AMENDMENT TO OFFICE LEASE AGREEMENT
This Fourth Amendment to Office Lease Agreement (“Amendment”) is made this 27 day of January, 2026 (“Effective Date”), and is between RJ Equities LP, a Pennsylvania limited partnership (“Landlord”), and COGNITION THERAPEUTICS, INC., a Delaware corporation (“Tenant”).
ARTICLE I - AMENDMENT OF BASIC TERMS
The parties, intending to be legally bound, do hereby agree to the amendment, ratification and restatement of certain terms of the Lease (as defined below) as follows:
d)Base Rent: | From and after February 1, 2026, and continuing for the remainder of the term of the Lease, Base Rent shall be Forty-Eight Thousand Nine Hundred Sixty-Seven and 00/100ths Dollars ($48,967.00) per annum, payable in equal monthly installments of Four Thousand Eighty and 58/100ths Dollars ($4,080.58). |
e)Proportionate Share: | From and after February 1, 2026, Tenant’s Proportionate Share shall be 0.96% |
f)Base Year: | The Base Year for Real Estate Taxes and Operating Costs shall remain the year 2009. |
ARTICLE II - TENANT REPRESENTATIONS
By the execution of this Amendment, Tenant represents and warrants to Landlord as follows as of the date hereof:
b) | That there are no defenses or offsets against the Landlord’s enforcement of the Lease that may be claimed by Tenant. |
| b) | From and after the Effective Date, Tenant shall have no further obligations or liabilities with respect to the Surrendered Suite excepting only those obligations and liabilities which accrued prior thereto and expressly survive the expiration or earlier termination of the Lease. |
Except as expressly modified by this Amendment, all other terms and provisions of the Lease shall remain in full force and effect. Tenant accepts the Premises in its current “as-is, where-is” condition. All capitalized terms used herein shall have the meaning ascribed to such term in the Lease unless otherwise defined herein. This Amendment supersedes any prior discussions, proposals, negotiations and discussions between the parties and the Lease, as amended hereby, contains all of the agreements, conditions, understandings, representations and warranties made between the parties hereto with respect to the subject matter hereof. |
This Amendment may be executed in any number of counterparts, each of which when taken together shall be deemed to be one and the same instrument. The parties acknowledge and agree that notwithstanding any law or presumption to the contrary, the exchange of copies of this Amendment and signature pages by electronic transmission shall constitute effective execution and delivery of this Amendment for all purposes, and signatures of the parties hereto transmitted electronically shall be deemed to be their original signature for all purposes. |
Landlord and Tenant each represents and warrants to the other that the individual signing this Amendment on behalf of such party is duly authorized to execute and deliver this Amendment on behalf of such entity in accordance with the duly adopted authorizing instruments of such entity which have been adopted or approved in accordance with all legal requirements and the internal bylaws, agreements, or other organizing documents of the entity, and that this Amendment is binding upon such entity in accordance with its terms. |
g) | Each party shall indemnify and hold the other harmless from and against all liability, cost and expense, including attorney's fees and court costs, arising out of any misrepresentation or breach of warranty made in this Amendment. |
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Witness the due execution of this Amendment the date first set forth above.
ATTEST: WITNESS: | COGNITION THERAPEUTICS, INC. By: /s/ John Doyle Name: John Doyle Title: Chief Financial Officer RJ EQUITIES LP By: RD Equities, LLC, its General Partner By: /s/ Jennifer Tarquinio Name: Jennifer Tarquinio Title: Member |
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Lisa Ricciardi, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Cognition Therapeutics, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 8, 2026 | By: | /s/ Lisa Ricciardi |
| | Lisa Ricciardi |
| | Chief Executive Officer |
| | (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, John Doyle, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Cognition Therapeutics, Inc. (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 8, 2026 | By: | /s/ John Doyle |
| | John Doyle |
| | Chief Financial Officer |
| | (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Cognition Therapeutics, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lisa Ricciardi, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:
(1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| | |
Date: May 8, 2026 | By: | /s/ Lisa Ricciardi |
| | Lisa Ricciardi |
| | Chief Executive Officer |
| | (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Cognition Therapeutics, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Doyle, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| | |
Date: May 8, 2026 | By: | /s/ John Doyle |
| | John Doyle |
| | Chief Financial Officer |
| | (Principal Financial and Accounting Officer) |