Alpha Cognition Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

For the Three and Nine Months Ended September 30, 2025 and 2024

For the three months ended September 30, 2025

For the three months ended September 30, 2024

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

For the Three and Nine Months Ended September 30, 2025 and 2024

For the nine months ended September 30, 2025

For the nine months ended September 30, 2024

**ALPHA COGNITION INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.** **

**ALPHA COGNITION INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

NOTE 1 – NATURE OF OPERATIONS

Alpha Cognition Inc. (“ACI” or the “Company”) is a commercial stage, biopharmaceutical company dedicated to developing treatments for patients suffering from neurodegenerative diseases, such as Alzheimer’s Disease and Cognitive Impairment with Traumatic Brain Injury (“TBI”), for which there are limited or no treatment options. The registered and records office of the Company is 1200 – 750 West Pender Street, Vancouver, BC, V6C 2T8.

On July 29, 2024, the Company was granted approval by the U.S. Food and Drug Administration (“FDA”) for the commercialization of ZUNVEYL, previously known as ALPHA-1062, for the treatment of mild-to-moderate Alzheimer’s disease.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation – The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America and are consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended December 31, 2024.

The interim condensed consolidated financial statements are unaudited and have been prepared on the same basis as the audited annual financial statements and, in management’s opinion, include all adjustments consisting of only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of September 30, 2025 and its results of operations and statements of equity for the three and nine months ended September 30, 2025 and 2024 and cash flows for the nine months ended September 30, 2025 and 2024. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the full fiscal year or any other period.

Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. The information included in this Form 10-Q should be read in conjunction with the financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

***Liquidity -***The Company does not have sufficient operating revenue to finance its existing obligations and has relied on external financing, such as debt and equity raises, to generate capital to maintain its capacity to meet working capital requirements. The Company has relied on debt and equity raises to finance its operating activities since incorporation. The Company has successfully raised funds that exceed the Company’s working capital requirements for the next 12 months from the date of issuance of these condensed consolidated financial statements. The Company expects to continue to rely on debt and the issuance of shares, and possibly other non-dilutive financing options to finance its ongoing operations and plans for commercialization of ZUNVEYL. However, there is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company.

**Use of Estimates and Assumptions –**The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and disclosure of contingent liabilities as of the date of the unaudited condensed interim consolidated financial statements and the reported amounts of expenses during the reporting period. The Company’s most significant estimates relate to the fair value of its warrant liabilities, bonus rights liability, and stock option grants, and its estimates of the standalone selling prices of certain performance obligations. On an ongoing basis, management evaluates its estimates, to ensure that those estimates effectively reflect changes in the Company’s business and new information as it becomes available. Management bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to forecasted amounts and future events. Actual results could differ materially from these estimates under different assumptions or conditions.

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The Company applies the following five-step revenue recognition model in accordance with ASC Topic 606, Revenue from Contracts with Customers, to determine revenue:

At contract inception, the Company identifies the goods or services promised in the contract and assesses whether each is distinct for the purpose of identifying performance obligations. A promised good or service is distinct if (1) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer; and (2) the Company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract.

Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. The Company evaluates whether such options provide a material right to the customer. If so, they are treated as separate performance obligations.

The transaction price is then determined and allocated to the identified performance obligations in proportion to their standalone selling prices (“SSP”). SSP is determined at contract inception and is not updated to reflect changes between contract inception and when the performance obligations are satisfied. Judgment is required in estimating SSP, and the Company considers market conditions, entity-specific factors, and estimated costs in making this determination.

If the consideration includes a variable amount, the Company estimates the amount to which it expects to be entitled using either the expected value or the most likely amount method, depending on which better predicts the outcome. The estimated amount is included in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue will not occur when the uncertainty is resolved. The Company re-evaluates estimates and constraints at each reporting date and adjusts the transaction price accordingly, recording any changes on a cumulative catch-up basis.

Revenue is recognized when the Company satisfies a performance obligation, either at a point in time or over time. The amount of revenue recognized is based on the portion of the transaction price allocated to each performance obligation in accordance with its relative SSP. For obligations satisfied over time, revenue is recognized using an input or output method, depending on which most accurately depicts the transfer of control to the customer.

Product Sales, Net

Products are primarily sold to direct customers such as wholesalers and pharmacies. The Company’s contractual performance obligations are generally limited to the transfer of control of the product to the customer. For Zunveyl tablets provided to customers, revenue is recognized at the point in time when control of the goods transfers to the customer. The Company’s contracts typically stipulate F.O.B. (Free on Board) destination terms. Consequently, revenue is recognized when the drugs are delivered to the customer’s location or any destination designated by the customer for drop-shipment. This arrangement is not a consignment arrangement, and therefore, the Company recognizes revenue upon the delivery of goods to the customer. The Company’s payment terms to customers range from 30 to 96 days; payment terms differ by customer and by product.

Revenue from the Company’s product sales is reduced for expected prompt pay discounts, chargebacks, product returns, recalls, rebates, and consideration payable to customers, collectively referred to as gross-to-net (GTN) adjustments. Estimates of GTN adjustments are based various factors such as historical experience, projected market conditions, production expiration dates, analogs and the specific terms of the Company’s agreements with payers and customers.

Consideration payable to customers comprises of distributor fees. These service fees for distribution services are calculated as a percentage of monthly product sales based on the Wholesale Acquisition Cost (WAC). These fees are paid to customers for services such as access to inventory and sales data to pharmacies, inventory management, accounts receivable administration, and return and chargeback administration. Fees paid to customers for services that are integral activities within the distribution chain with the customer, specifically related to the Company’s sales of Zunveyl, are recognized as a reduction of revenue since these activities are not considered distinct from the Company’s promise to sell Zunveyl through the distribution channel to end customers. Fees paid to customers for services that transfer a distinct service to the Company, such as logistics services, are recorded as operating expenses.

Variable consideration is re-evaluated at least on a quarterly basis and typically monthly. The amount of variable consideration can vary from period to period due to fluctuations in GTN components.

Licensing Revenue

In licensing arrangements, the Company considers factors such as the collaboration partner’s capabilities and the availability of required expertise in the marketplace. The intended benefit of the contract is also considered in determining whether a promised good or service is separately identifiable. If a good or service is not distinct, it is combined with other promised goods or services until a distinct bundle is identified.

For arrangements that include development or regulatory milestone payments, the Company evaluates whether achieving the milestone is probable and recognizes revenue only if a significant reversal is not expected. Regulatory milestones that are outside the control of either party are generally excluded from the transaction price until achieved.

For licenses of intellectual property that include sales-based royalties or milestones, and when the license is the predominant item to which the royalties relate, the Company recognizes royalty revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which the royalty has been allocated has been satisfied, consistent with the sales-based royalty exception.

Accounts Receivable - The majority of our accounts receivable arise from product sales and primarily represent amounts due from our wholesale and other third-party distributors standard payment terms that generally require payment within 30 to 96 days.

We provide reserves against accounts receivable for estimated losses that may result from a customer’s inability to pay. Amounts determined to be uncollectible are charged or written-off against the reserve.

Royalty Cost of Sales – The Company makes royalty payments to third parties under license or purchase agreements associated with the acquisition of intellectual property. These royalty payments are calculated as a percentage of the net product sales and licensing fee in the period the corresponding sales occur. Royalty expenses are recognized as incurred and recorded as a component of cost of sales in the consolidated statements of operations and comprehensive loss.

***Fair Value Measurements -***FASB ASC 820 –Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements. In accordance with ASC 820, we have categorized our financial assets and liabilities based on the priority of the inputs to the valuation technique into a three-level fair value hierarchy as set forth below. If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

Financial assets and liabilities recorded in the accompanying consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1 – Financial instruments whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market which we have the ability to access at the measurement date.

Level 2 – Financial instruments whose values are based on quoted market prices in markets where trading occursinfrequently or whose values are based on quoted prices of instruments with similar attributes in active markets.

Level 3 – Financial instruments whose values are based on prices or valuation techniques that require inputs that areboth unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the instrument.

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, other current assets, accounts payable, promissory note, and other long-term liabilities. The fair values of accounts receivable, other current assets, accounts payable, and promissory note approximate their carrying values either due to their current nature or current market rates for similar instruments.

Cash is measured at fair value on a recurring basis using level 1 inputs. Other long-term liabilities consisting of the bonus rights liability and warrant liabilities are measured at fair value on a recurring basis using level 3 inputs. As of September 30, 2025 and December 31, 2024, the fair value of the bonus rights liability was $152,166 and $102,783, respectively. As of September 30, 2025 and December 30, 2024, the fair value of the warrant liabilities was $5,269,564 and $5,820,358, respectively.

New Accounting Pronouncements

In December 2023, FASB issued ASU 2023-09,*Income Taxes (Topic 740): Improvements in Income Tax Disclosures,*which is to enhance the transparency and decision usefulness of income tax disclosures. This amendment requires public companies to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Additionally, under the amendment entities are required to disclose the amount of income taxes paid disaggregated by federal, state and foreign taxes, as well as disaggregated by material individual jurisdictions. Finally, the amendment requires entities to disclose income from continuing operations before income tax expense disaggregated between domestic and foreign and income tax expense from continuing operations disaggregated by federal, state and foreign. The new rules are effective for annual periods beginning after December 15, 2024. We will adopt this standard on a prospective basis as allowed by the standard. The adoption of this standard is not expected to have a material impact on our financial statements.

In November 2024, FASB issued ASU 2024-03,*Income Statement (Subtopic 220-40): Reporting Comprehensive Income – Expense Disaggregation Disclosures.*This standard requires disclosure in the notes to the financial statements, at each interim and annual reporting period, of specified information about certain costs and expense including purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption. This standard also requires a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated, as well as disclosure of the total amount of selling expenses, and, in annual reporting periods, an entity’s definition of selling expenses. These new rules are effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the potential impact that this new standard will have on our consolidated financial statements and related disclosures.

NOTE 3 – R&D GRANT

On June 5, 2023, the Company was awarded a $750,000 research and development grant from the Army Medical Research and Material Command for a pre-clinical study on the use of the ALPHA-1062 Intranasal to reduce blast mTBI (mild Traumatic Brain Injury) induced functional deficit and brain abnormalities (“R&D Grant”). The R&D Grant is issued in collaboration with the Seattle Institute of Biomedical and Clinical Research and endorsed by the Department of Defense. Funds received from the R&D grant are restricted and to be used solely as outlined in the grant. The R&D grant funding will expire for use on September 30, 2028.

Per the R&D Grant, budget expenses are expected to include cost to carry out the clinical trials including personnel costs, materials and supplies, animal housing, publications, and travel costs. The Company classifies any cash received from the R&D Grant that has not yet been used to pay ongoing R&D grant expenditures as restricted cash, as the proceeds from the grant are to be designated for the specified grant research.

Activity related to the R&D grant was as follows for the three and nine months ended September 30, 2025, and 2024:

As of September 30, 2025, and December 31, 2024, the Company’s condensed consolidated balance sheet accounts included the following related to the R&D Grant:

NOTE 4 – INVENTORY

Inventory consists of the following:

NOTE 5 – BALANCE SHEET COMPONENTS

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

Accounts payable and accrued liabilities

NOTE 6 – INTANGIBLE ASSETS

Intangible assets consisted of the following:

On January 25, 2025, the Company was granted a new patent titled “Coated Tablets for pH-Dependent Release of Benzgalantamine” from the United States Patent and Trademark Office (USPTO) until 2044. As a result of the granted patent, management reviewed the estimated useful life of the license related to this patent, and determined the remaining useful life should be extended from 5 years to 19 years.

Change in Useful Life of Intangible Asset

The Company completed a review of the estimated useful life of its intangible asset after a patent application, related to the Memogain License, was granted in January 2025. The patent protection was extended to February 2044. Management determined that the estimated useful life of the license should be extended for an additional 14 years. Effective January 1, 2025, the Company extended the estimated remaining useful life of the license from 5 years to 19 years.

This change in estimates has been applied prospectively in accordance with ASC 250, Accounting Changes and Error Corrections. As a result of this change, amortization expense decreased by approximately $43,122 for the nine months ended September 30, 2025, compared to the prior amortization schedule.

Amortization for the three months ended September 2025 and 2024, was $5,387 and $19,761. Amortization expense for the nine months ended September 30, 2025 and 2024, was $16,160 and $60,115, respectively. During the three months ended September 30, 2025, and 2024, the Company reported an impairment of intangible assets of $nil and $39,166, respectively, from the impairment of one license.

The following table outlines the estimated future annual amortization expense related to intangible assets as of September 30, 2025:

NOTE 7 – STOCKHOLDERS’ EQUITY

At the Market Offering

On August 22, 2025, the Company entered into an At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) as sales agent. Under the terms of the ATM Agreement, the Company will be entitled to sell, at its sole discretion and from time to time as it may choose, common shares in the capital of the Company (“Shares”) through Wainwright, with such sales having an aggregate gross sales value of up to US$75.0 million (the “Offering”). The ATM Agreement will remain in full force and effect until the date that the ATM Agreement is terminated in accordance with the terms therein.

Subject to the terms and conditions of the Agreement, Wainwright will use its commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions. However, the Company has no obligation to sell any of the Shares, and may at any time suspend offers under the Agreement or terminate the Agreement. The Company has provided Wainwright with customary indemnification rights, and Wainwright will be entitled to a commission at a commission rate of up to 3.0% of the gross sales price of the Shares sold.

Warrants

During the nine months ended September 30, 2025, the Company did not issue any warrants.

The schedule of activity for the warrants is as follows:

A summary of the warrants outstanding and exercisable as of September 30, 2025, is as follows:

CAD Warrants Liability

On August 31, 2023, the Company’s functional currency changed to the USD from the CAD; as such, the Company recorded a derivative liability on the warrants outstanding with CAD exercises prices (the “CAD Warrants”). This derivative liability is being revalued at each reporting period.

As of September 30, 2025, and December 31, 2024, the Company revalued the CAD Warrant derivative liability to $466,937 and $503,129, respectively, and recorded a gain on revaluation of $36,192 for the nine months ended September 30, 2025 (nine months ended September 30, 2024 – loss of $140,282).

A summary of the CAD Warrants outstanding and exercisable as of September 30, 2025, is as follows:

The following weighted average assumptions were used in the Black-Scholes option-pricing model for the re-valuations as of September 30, 2025, and December 31, 2024:

Debentures Warrants Liability

On September 24, 2024, the Company entered into Securities Purchase Agreements with various third-party lenders for the issuance of convertible debentures and 430,805 warrants (the “Initial Debenture Warrants”) to purchase Common Shares of the Company. Upon closing of the public offering on November 13, 2024, the convertible debentures were automatically converted into securities that included additional 215,421 warrants (the “Additional Debenture Warrants”).

The fundamental transaction clause in the warrant agreement stipulates that the expected volatility is determined as the greater of 100% and the 30-day volatility, as calculated from the HVT function on Bloomberg. Under ASC 815 (Derivatives and Hedging), an instrument must be classified as equity if it passes the “fixed-for-fixed” indexation test, meaning both the exercise price and the number of shares to be issued must be fixed at issuance. In this case, the volatility input is predetermined and fixed in the agreement “an expected volatility equal to the greater of 100% and the 30-day volatility from the “HVT” function on Bloomberg”, and is therefore not indexed to the Company’s stock. As a result, the Initial and Additional Debenture Warrants fail the “fixed-for-fixed” test and are classified as derivative liabilities in accordance with ASC 815.

As of September 30, 2025, the Company revalued the Initial and Additional Debenture Warrants derivative liabilities to $2,450,710 (December 31, 2024 - $2,646,843) and recorded a gain on revaluation of $196,133 and $nil for the nine months ended September 30, 2025, and 2024, respectively.

A summary of the Initial and Additional Debenture Warrants issued and outstanding as of September 30, 2025, is as follows:

The following weighted average assumptions were used in the binomial lattice model for the revaluation for the Initial and Additional Debenture Warrant as of September 30, 2025, and December 31, 2024:

Agent Warrants

Upon completion of the public offering, the Company issued 608,696 Agent Warrants and an additional 34,196 Agent Warrants for the over-allotment. In the warrant agreement it included the fundamental transaction clause that stipulates that the expected volatility is determined as the greater of 100% and the 30-day volatility, as calculated from the HVT function on Bloomberg. Under ASC 815 (Derivatives and Hedging), an instrument must be classified as equity if it passes the “fixed-for-fixed” indexation test, meaning both the exercise price and the number of shares to be issued must be fixed at issuance. In this case, the volatility input is predetermined and fixed in the agreement “an expected volatility equal to the greater of 100% and the 30-day volatility from the “HVT” function on Bloomberg”, and is therefore not indexed to the Company’s stock. As a result, the agent warrants fail the “fixed-for-fixed” test and are classified as derivative liabilities in accordance with ASC 815.

During the nine months ended September 30, 2025,128,578 Agent Warrants were exercised, which resulted in $903,245 of the derivative liability being reclassified to share capital. As at September 30, 2025, the Company revalued the derivative liability to $2,351,917 (December 31, 2024 - $2,670,386) and recorded a loss on revaluation of $584,776 and $nil for the nine months ended September 30, 2025, and 2024, respectively.

A summary of the Agent Warrants issued and outstanding as of September 30, 2025, is as follows:

The following weighted average assumptions were used in the Black-Scholes option-pricing model for the revaluations of the Agent Warrants as of September 30, 2025, and December 31, 2024:

Equity Incentive Plan

The Company’s 2025 Stock and Incentive Plan (the “2025 Incentive Plan”) for its employees, officers, consultants, advisors and non-employee Directors was approved by the stockholders on June 19, 2025. The 2025 Incentive Plan is to provide equity-based compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, or other stock-based awards. The total number of Common Stock reserved under the 2025 Incentive Plan is 2,000,000, which does not include the options outstanding in prior existing Share Option Plans.

Stock Options

Common Stock Options

Common stock option activity is as follows:

The following weighted average assumptions were used in the Black-Scholes option-pricing model for the valuation of the Common Share options issued:

The following table summarizes the total amount of share-based compensation expense related to service conditions for Common Stock options during the three and nine months ended September 30, 2025, and 2024:

During the three months ended September 30, 2025 and 2024, stock-based compensation expense relating to the ACI Canada Legacy Performance options was $nil and $2,510, respectively. For the nine months ended September 30, 2025 and 2024, stock-based compensation expense relating to the ACI Canada Legacy Performance options was $nil and $118,514, respectively.

NOTE 8 – CMS LICENSE AND COLLABORATION AGREEMENT

On January 8, 2025 (the “Effective Date”), the Company entered into a License, Collaboration and Distribution Agreement (the “CMS License Agreement”) with CMS International Development and Management Limited (“CMS”), pursuant to which the Company granted CMS an exclusive, transferable, sub-licensable, and royalty-bearing license to develop, register, manufacture, import, export, and commercialize ZUNVEYL (the “Product”) in the Asia-Pacific region (excluding Japan), Australia, and New Zealand (the “Territory”). ZUNVEYL is a next generation acetylcholinesterase inhibitor approved in the US for the treatment of mild-to-moderate Alzheimer’s disease.

Under the terms of the CMS License Agreement, the Company received a one-time, non-refundable, non-creditable upfront payment of $3.0 million in January 2025 and is eligible to receive up to $11.0 million in development and regulatory milestone payments, as well as up to $30.0 million in sales milestone payments. In addition, CMS is obligated to pay annual royalties of 9% on net sales within the defined royalty term.

The CMS License Agreement remains in effect for an initial term of 20 years from the Effective Date and will automatically renew for additional five-year terms unless either party provides notice of non-renewal at leastsix months prior to the expiration of the then-current term.

The total transaction price at inception was determined to consist of the $3.0 million upfront payment. The Company identified two distinct performance obligations: (1) the license to the Company’s pharmaceutical intellectual property, and (2) certain regulatory, technical, and clinical assistance to be provided by the Company and the Joint Steering Committee, which includes representatives from both the Company and CMS, through the expected commercialization of the Product. The upfront payment of $3 million was allocated to the identified performance obligations based on their relative standalone selling prices (SSPs). The SSP for the license was determined using the residual method due to the highly variable nature of similar license transactions, while the SSP for services was based on estimated costs plus a margin.

License of Intellectual Property

The license to the Company’s intellectual property represents a distinct performance obligation. The license was transferred to CMS on the Effective Date to satisfy this performance obligation. The Company allocated $2,396,600 of the total transaction price to the license and recognized the corresponding revenue in the first quarter of 2025.

Regulatory, Technical, and Clinical Assistance

The Company’s promise to provide supporting services, whether directly or in participation with the Joint Steering Committee, to CMS is expected to be primarily fulfilled during the early stages of the contract through commercialization of the Product. These services represent a distinct performance obligation and will be recognized over time as the services are rendered. Based on estimated effort and project timelines, $284,200 of revenue was allocated to be recognized ratably over the first year 2025, with $245,000 expected to be recognized in 2026 and $74,200 in 2027. As of September 30, 2025, the Company recognized $180,670 of revenue related to these services.

Development and Regulatory Milestone Payments

The potential development and regulatory milestone payments are contingent upon the occurrence of certain milestones as defined in the CMS License Agreement. These payments have been fully constrained until the Company concludes that achievement of the milestone is probable and that recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. As such, they have been excluded from the transaction price. At the end of each subsequent reporting period, the Company will re-evaluate the probability of achievement of each milestone and any related constraint and, if necessary, adjust its estimate of the overall transaction price. The updated transaction price will be allocated to the two identified performance obligations based on estimated SSP. As of September 30, 2025, the Company has not recognized any revenue associated with the development and regulatory milestones.

Sales Milestone Payments and Royalties

Any consideration related to sales milestones or royalties will be recognized if and when the related sales occur as such amounts are determined to relate predominantly to the license granted to CMS. Accordingly, this consideration has been excluded from the transaction price. No allocation to performance obligations will be performed, as both the license and related assistance are expected to be satisfied by the time sales milestones and royalties are earned. No sales milestone or royalty revenue was recognized as of September 30, 2025.

Pass Through Costs

Included within licensing revenue is revenue from the sale of active pharmaceutical ingredient (“API”) and finished goods to CMS in connection with the CMS License Agreement. These API and finished goods sales support CMS’s development and regulatory activities and are priced at cost plus a margin. The Company also includes certain pass through reimbursable costs within these revenue totals. These amounts are recognized on a gross basis. Revenue related to API sales and reimbursable costs is recognized upon API shipment or delivery, depending on the applicable shipping terms. As of September 30, 2025, the Company has recorded $601,452 in licensing revenue relating to the pass through costs.

As of September 30, 2025, $550,230 is due from CMS for the CMS License Agreement.

NOTE 9 – FOREIGN CURRENCY CONTRACTS

The Company has an obligation to make periodic royalty payments from its sale of products incorporating technology that has been licensed from Neurodyn Life Sciences Inc. (“NLS”). Because these payments will be made in EUR the Company is exposed to cash flow variability resulting from changes in USD/EUR exchange rates. Therefore, during September 2025, the Company entered into several foreign currency forward and foreign currency collar contracts that are intended to hedge its exposure to changes in the USD/EUR exchange rates on or about the dates certain of the Company’s forecasted royalty payments will be made.

The foreign currency forward and collar contracts are derivative instruments that must be accounted for at fair value. Each reporting period, the change in the fair value of each contract is recognized as a gain or loss classified as a component of “Other income (expense)” within the Company’s consolidated statement of operations.

At September 30, 2025 foreign currency forward contracts to purchase EUR 388,947 remained outstanding. These contracts will settle at various dates between November 2025 and August 2026. The fair value of the foreign currency forward contracts was immaterial at September 30, 2025.

At September 30, 2025 foreign currency collar contracts with a notional amount of EUR 3,458,251 remained outstanding. These contracts will settle at various dates between March 2026 and November 2027. The fair value of the foreign currency collar contracts was immaterial at September 30, 2025.

NOTE 10 – RELATED PARTY TRANSACTIONS AND BALANCES

In April 2022, Mr. McFadden was granted the ability to earn up to 327,830 bonus rights of which 65,566 bonus rights had been earned as of September 30, 2025. The value of these bonus rights was determined to be $107,437 and $74,587 as of September 30, 2025, and December 31, 2024, respectively, and is included in other liabilities.

In May 2022, Ms. D’Angelo was granted the ability to earn up to 42,618 bonus rights of which 29,505 bonus rights had been earned as of September 30, 2025. The value of these bonus rights was determined to be $44,729 and $28,196 as of September 30, 2025, and December 31, 2024, respectively, and is included in other liabilities.

As of September 30, 2025, and December 31, 2024, $659,568 and $799,941, respectively, is owing to directors and officers of the Company and has been included in accounts payable and accrued liabilities. These balances are in relation to fees and management compensation and are non-interest bearing, unsecured and due on demand.

As of September 30, 2025, and December 31, 2024, the Company owed NLS $nil and $911,463 respectively. During the nine months ended September 30, 2025, and 2024, the Company recorded interest expense and amortization of the premium, included in accretion expense, of $4,894 and $37,754, respectively.

NOTE 11 – NET LOSS PER SHARE

Net loss per common share has been computed on the basis of the weighted-average number of common shares outstanding during the three and nine months ended September 30, 2025, and 2024. Diluted loss per share is computed similarly to basic loss per share, except that it includes the potential dilution that could occur if dilutive securities were exercised. We apply the treasury stock method in the calculation of diluted loss per share.

In quarterly and year-to-date periods that liability-classified warrants are in the money, the Company determines whether such instruments are dilutive by calculating the effect on loss per share after considering both (a) the adjustment to the numerator that would result from reversing the impact of the change in fair value recorded to net loss during the period and (b) the adjustment to the denominator that would result from the incremental shares outstanding, using the treasury stock method, in an assumed exercise of these instruments at the beginning of the period.

The following table reconciles net loss and the weighted average shares outstanding for the basic calculation to the net loss and the weighted average shares outstanding for the diluted calculation for the periods indicated:

The following potentially dilutive common shares related to outstanding securities for the three and nine months ended September 30, 2025, and 2024 were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive for the period:

NOTE 12 – SUBSEQUENT EVENTS