MEDICINOVA INC

Previous wording

We have incurred significant net losses since our inception. As of March 31, 2024, from inception, our accumulated deficit was $418.5 million. We expect to incur substantial net losses for the next several years as we continue to develop certain of our existing product development programs, and over the long-term if we expand our research and development programs and acquire or in-license products, technologies or businesses that are complementary to our own.

Current wording

We have incurred significant net losses since our inception. As of June 30, 2024, from inception, our accumulated deficit was $421.1 million. We expect to incur substantial net losses for the next several years as we continue to develop certain of our existing product development programs, and over the long-term if we expand our research and development programs and acquire or in-license products, technologies or businesses that are complementary to our own.

Previous wording

The COVID-19 pandemic resulted in significant national and global economic disruption and has, and may continue to adversely affect our business. To date, we have experienced certain adverse effects on our business as well as been provided certain opportunities as a result of the pandemic. The pandemic caused a decrease in the number of patient visits at some clinical trial sites which we believe resulted in slower enrollment in our clinical trials than would have occurred without the pandemic. However, we have seen an increase in the number of patient visits compared to earlier in the pandemic and we continue to enroll patients in clinical trials. Throughout the pandemic, we continued with routine clinical trial activities including executing new clinical trial agreements, negotiating budgets, institutional review board approvals, site training, and other activities related to the initiation of new clinical trials and the opening of new clinical trial sites, although some of these activities took longer to complete than what we experienced prior to the pandemic.

Current wording

The recent COVID-19 pandemic resulted in significant national and global economic disruption and has, and may continue to adversely affect our business. To date, we have experienced certain adverse effects on our business as well as been provided certain opportunities as a result of the pandemic. The pandemic caused a decrease in the number of patient visits at some clinical trial sites which we believe resulted in slower enrollment in our clinical trials than would have occurred without the pandemic. However, we have seen an increase in the number of patient visits compared to earlier in the pandemic and we continue to enroll patients in clinical trials. Throughout the pandemic, we continued with routine clinical trial activities including executing new clinical trial agreements, negotiating budgets, institutional review board approvals, site training, and other activities related to the initiation of new clinical trials and the opening of new clinical trial sites, although some of these activities took longer to complete than what we experienced prior to the pandemic.

Previous wording

Further, the COVID-19 pandemic and government responses to the pandemic resulted in, and may continue to result in, downward pressure, extreme volatility, and disruptions in the capital and credit markets, reducing our ability to raise additional capital through equity, equity-linked or debt financings, which could negatively impact our short-term and long-term liquidity, access to capital markets, and our ability to operate in accordance with our operating plan, or at all.

Current wording

Further, certain global COVID-19 pandemic and government responses to the pandemic resulted in, and may continue to result in, downward pressure, extreme volatility, and disruptions in the capital and credit markets, reducing our ability to raise additional capital through equity, equity-linked or debt financings, which could negatively impact our short-term and long-term liquidity, access to capital markets, and our ability to operate in accordance with our operating plan, or at all.

Previous wording

Our critical accounting policies are those accounting principles generally accepted in the United States that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. For a description of our critical accounting estimates, please see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” contained in our Annual Report on Form 10-K, for the year ended December 31, 2023. There have not been any material changes to the critical accounting policies discussed therein during the three months ended March 31, 2024.

Current wording

Our critical accounting policies are those accounting principles generally accepted in the United States that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. For a description of our critical accounting estimates, please see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” contained in our Annual Report on Form 10-K, for the year ended December 31, 2023. There have not been any material changes to the critical accounting policies discussed therein during the six months ended June 30, 2024.

Previous wording

Research, development and patents expenses were $1.8 million and $1.5 million for the three months ended March 31, 2024 and 2023, respectively. The increase of $0.3 million was primarily due to an increase in MN-166 manufacturing costs.

Current wording

Research, development and patents expenses were $3.4 million and $3.2 million for the six months ended June 30, 2024 and 2023, respectively. The increase of $0.2 million was primarily due to an increase in MN-166 manufacturing costs, partially offset by a decrease in performance-based stock option expense.

Previous wording

General and administrative expenses were $1.4 million and $1.5 million for the three months ended March 31, 2024 and 2023, respectively. The decrease of $0.1 million was primarily driven by a decrease in performance-based stock option expense partially offset by an increase in accounting expenses.

Current wording

General and administrative expenses were $2.8 million and $3.1 million for the six months ended June 30, 2024 and 2023, respectively. The decrease of $0.3 million was primarily driven by a decrease in performance-based stock option expense partially offset by an increase in accounting expenses.

Previous wording

Net cash used in operating activities during the three months ended March 31, 2024 was $3.9 million compared to $3.2 million during the same period in 2023. The $0.7 million change is primarily related to the decreased net loss and changes in operating assets and liabilities for those periods.

Current wording

Net cash used in operating activities during the six months ended June 30, 2024 was $6.7 million compared to $5.6 million during the same period in 2023. The $1.1 million change is primarily related to the increase in prepaid expenses, other assets, accounts payable and accrued liabilities for those periods.

Previous wording

Net cash provided by investing activities during the three months ended March 31, 2024 was $0.0 million compared to $39.9 million provided by during the same period in 2023 related to the disposal of certificates of deposit of $39.9 million during the three months ended March 31, 2023.

Current wording

Net cash provided by investing activities during the six months ended June 30, 2024 was $0.0 million compared to $39.9 million provided by during the same period in 2023 related to the disposal of certificates of deposit of $39.9 million during the six months ended June 30, 2023.

Previous wording

As of March 31, 2024, we had available cash and cash equivalents of $47.1 million and working capital of $45.4 million. As of the date of this report, we believe we have working capital sufficient to fund operations at least through the end of 2025. However, we cannot provide assurance that these capital resources will be sufficient to conduct all our research and development programs as planned.

Current wording

As of June 30, 2024, we had available cash and cash equivalents of $44.3 million and working capital of $43.0 million. As of the date of this report, we believe we have working capital sufficient to fund operations at least through the end of 2025. However, we cannot provide assurance that these capital resources will be sufficient to conduct all our research and development programs as planned.

Previous wording

On August 23, 2019, we entered into an at the market issuance sales agreement, which was amended on August 26, 2022 (as amended, the ATM Agreement) with B. Riley FBR, Inc. (B. Riley FBR) pursuant to which we may sell common stock through B. Riley FBR from time to time up to an aggregate offering price of $75.0 million. Sales of our common stock through B. Riley FBR, if any, will be made by any method that is deemed to be an “at-the-market” equity offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, including sales made directly on Nasdaq, on any other existing trading market for the common stock or through a market maker. B. Riley FBR may also sell the common stock in privately negotiated transactions, subject to our prior approval. We agreed to pay B. Riley FBR an aggregate commission rate of up to 3.5% of the gross proceeds of any common stock sold under this agreement. Proceeds from sales of common stock will depend on the number of shares of common stock sold to B. Riley FBR and the per share purchase price of each transaction.

Current wording

In August 2019, we entered into an at the market issuance sales agreement, which was amended on August 26, 2022 (as amended, the ATM Agreement) with B. Riley FBR, Inc. (B. Riley FBR) pursuant to which we may sell common stock through B. Riley FBR from time to time up to an aggregate offering price of $75.0 million. Sales of our common stock through B. Riley FBR, if any, will be made by any method that is deemed to be an “at-the-market” equity offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, including sales made directly on Nasdaq, on any other existing trading market for the common stock or through a market maker. B. Riley FBR may also sell the common stock in privately negotiated transactions, subject to our prior approval. We agreed to pay B. Riley FBR an aggregate commission rate of up to 3.5% of the gross proceeds of any common stock sold under this agreement. Proceeds from sales of common stock will depend on the number of shares of common stock sold to B. Riley FBR and the per share purchase price of each transaction.

Previous wording

No shares of common stock were sold under the ATM Agreement in the three months ended March 31, 2024 and 2023.

Current wording

No shares of common stock were sold under the ATM Agreement in the three and six months ended June 30, 2024 and 2023.