Longeveron Inc

Previous wording

In November of 2023, Longeveron received notice from the World Health Organization (“WHO”) that “laromestrocel” has been selected as the proposed International Nonproprietary Name for Longeveron’s Lomecel-B™ product. Assuming that there are no third-party objections to that name, the name will be recommended for adoption by the WHO. Longeveron will adopt that name if it is recommended by the WHO.

Current wording

In November of 2023, Longeveron received notice from the World Health Organization (“WHO”) that “laromestrocel” has been selected as the proposed International Nonproprietary Name for Longeveron’s Lomecel-B™ product. Upon final approval of the name by the WHO, Longeveron will adopt that name.

Previous wording

Financial Overview. Since inception, the Company has primarily been engaged in organizational activities, including raising capital, and research and development activities. The Company does not yet have a product that has been approved by the FDA, and has only generated revenues from grants, the Bahamas Registry Trials and contract manufacturing. The Company has not yet achieved profitable operations or generated positive cash flows from operations. The Company has incurred recurring losses from operations since its inception, and as of June 30, 2024 the Company had an accumulated deficit of $101.0 million. The Company expects to continue to generate operating losses for the foreseeable future.

Current wording

Financial Overview. Since inception, the Company has primarily been engaged in organizational activities, including raising capital, and research and development activities. The Company does not yet have a product that has been approved by the FDA, and has only generated revenues from grants, the Bahamas Registry Trials and contract manufacturing. The Company has not yet achieved profitable operations or generated positive cash flows from operations. The Company has incurred recurring losses from operations since its inception, and as of September 30, 2024 the Company had an accumulated deficit of $105.5 million. The Company expects to continue to generate operating losses for the foreseeable future.

Previous wording

With the completion of the offering and financing transactions in April and June 2024, and subsequent warrant exercises and offering transaction undertaken in July, we believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements through the fourth quarter of 2025. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect. We currently have no credit facility or committed sources of capital. To continue as a going concern we will need to obtain additional capital, which we will likely obtain through a variety of means, including through public or private equity, debt financings or other sources, including up-front payments and milestone payments from strategic collaborations. To the extent that we raise additional capital through the sale of convertible debt or equity securities, current stockholder ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect stockholder rights. Such financing will likely result in dilution to stockholders, and may result in imposition of debt covenants, increased fixed payment obligations or other restrictions that may affect our business. If we raise additional funds through up-front payments or milestone payments pursuant to strategic collaborations with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to us. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

Current wording

With the completion of the offering and financing transactions in April and June 2024, subsequent warrant exercises, and offering and inducement transactions undertaken in July and September 2024, we believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements through the fourth quarter of 2025 based on our current operating budget and cash flow forecast. However, as a result of its successful Type C meeting with the U.S. FDA in August 2024 with respect to the HLHS regulatory pathway, we have started to ramp up Biologics License Application (BLA) enabling activities as we currently anticipate a potential filing with the FDA in 2026 if the current ELPIS II trial is successful. To the extent that our operating expenses and capital expenditure requirements accelerate in calendar 2025 as a result of these activities, including CMC (Chemistry, Manufacturing, and Controls) and manufacturing readiness, there will be a need to increase our current proposed spend and further increase our capital investments. We intend to seek additional financing/capital raises/non-dilutive funding options to support these activities, and current cash projections may be impacted by these ramped up activities and any financing transactions entered into. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect. We currently have no credit facility or committed sources of capital. To continue as a going concern we will need to obtain additional capital, which we will likely obtain through a variety of means, including through public or private equity, debt financings or other sources, including up-front payments and milestone payments from strategic collaborations. To the extent that we raise additional capital through the sale of convertible debt or equity securities, current stockholder ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect stockholder rights. Such financing will likely result in dilution to stockholders, and may result in imposition of debt covenants, increased fixed payment obligations or other restrictions that may affect our business. If we raise additional funds through up-front payments or milestone payments pursuant to strategic collaborations with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to us. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

Previous wording

Our HLHS program is focused on the potential clinical benefits of Lomecel-B™ as an adjunct therapeutic to standard-of-care HLHS surgery. HLHS is a rare and devastating congenital heart defect in which the left ventricle is severely underdeveloped. As such, babies born with this condition die shortly after birth without undergoing a complex series of reconstructive heart surgeries. Despite the availability of life-saving surgical interventions, clinical studies show that only 50 to 60 percent of affected individuals survive to adolescence. Early clinical study data shows the potential survival benefit of Lomecel-B™ for HLHS patients and supports Longeveron’s belief that this data shows the potential to alter the treatment landscape for patients with HLHS. We have completed a Phase 1 open-label study (“ELPIS I”)1 that supported the safety and tolerability of Lomecel-B™ for HLHS, when directly injected into the functional right ventricle during the second-stage standard-of-care surgery (adding minimal additional time to the surgical procedure). Preliminary data revealed that several indices of right ventricular function show suggestions of either improvement or prevention of deterioration over one year following surgery. Heart transplant-free survival for patients who received Lomecel-B™ intracardiac injection is favorable as compared to historical controls for survival. The improvement in HLHS survival following the Phase 1 ELPIS I clinical trial has resulted in acceptance by the American Heart Association (“AHA”) for a poster presentation at an AHA meeting in November 2023. The ELPIS I trial showed 100 percent transplant-free survival in children up to 5 years of age after receiving Lomecel-B™, compared to a 20 percent mortality rate observed from historical control data. Based on these findings, the U.S. Food and Drug Administration (the “FDA”) granted Lomecel-B™ both Rare Pediatric Disease (RPD”) Designation and Orphan Drug Designation (“ODD”) for treatment of infants with HLHS. Longeveron is currently conducting a controlled Phase 2b trial (“ELPIS II”) to compare the effects of Lomecel-B™ as an adjunct therapeutic versus standard-of-care (HLHS surgery alone). We hope that a positive outcome could add to the clinical data suggesting the functional and clinical benefit of Lomecel-B™ as part of standard-of-care treatment in HLHS patients.

Current wording

Our HLHS program is focused on the potential clinical benefits of Lomecel-B™ as an adjunct therapeutic to standard-of-care HLHS surgery. HLHS is a rare and devastating congenital heart defect in which the left ventricle is severely underdeveloped. As such, babies born with this condition die shortly after birth without undergoing a complex series of reconstructive heart surgeries. Despite the availability of life-saving surgical interventions, clinical studies show that only 50 to 60 percent of affected individuals survive to adolescence. Early clinical study data shows the potential survival benefit of Lomecel-B™ for HLHS patients and supports Longeveron’s belief that this data shows the potential to alter the treatment landscape for patients with HLHS. We have completed a Phase 1 open-label study (“ELPIS I”)1 that supported the safety and tolerability of Lomecel-B™ for HLHS, when directly injected into the functional right ventricle ("RV") during the second-stage standard-of-care surgery (adding minimal additional time to the surgical procedure). Preliminary data revealed that several indices of right ventricular function show suggestions of either improvement or prevention of deterioration over one year following surgery. Heart transplant-free survival for patients who received Lomecel-B™ intracardiac injection is favorable as compared to historical controls for survival. The improvement in HLHS survival following the Phase 1 ELPIS I clinical trial resulted in acceptance by the American Heart Association (“AHA”) for a poster presentation at an AHA meeting in November 2023. The ELPIS I trial showed 100 percent transplant-free survival in children up to 5 years of age after receiving Lomecel-B™, compared to a 20 percent mortality rate observed from historical control data.

Previous wording

The study demonstrated positive results. The established safety profile of Lomecel-B™ for single and multiple dosing regimens was demonstrated in study data that showed no incidence of hypersensitivity or infusion-related reactions, there were no cases of amyloid-related imaging abnormalities (ARIA), and all Lomecel-B™ treatment groups met the safety primary endpoint and showed slowing/prevention of disease worsening relative to placebo. There were statistically significant improvements in the secondary efficacy endpoint, composite AD score (“CADS”) for both the low-dose Lomecel-BTMgroup and the pooled treatment groups compared to placebo. Other doses also indicated promising results in slowing/prevention of disease worsening. Additionally, a statistically significant improvement versus placebo was observed in the Montreal cognitive assessment (“MoCA”) and in the activity of daily living observed by a caregiver and measured by Alzheimer’s disease Cooperative Study Activities of Daily Living (“ADCS-ADL”). The study indicated potential preservation of brain volumes in some but not all AD related areas of brain. Brain MRI results demonstrated a 49% reduction in brain volume loss and improvement in cerebral blood flow.

Current wording

The study demonstrated positive results. The established safety profile of Lomecel-B™ for single and multiple dosing regimens was demonstrated in study data that showed no incidence of hypersensitivity or infusion-related reactions, there were no cases of amyloid-related imaging abnormalities (ARIA), and all Lomecel-B™ treatment groups met the safety primary endpoint and showed slowing/prevention of disease worsening relative to placebo. There were statistically significant improvements in the secondary efficacy endpoint, composite AD score (“CADS”) for both the low-dose Lomecel-BTMgroup and the pooled treatment groups compared to placebo. Other doses also indicated promising results in slowing/prevention of disease worsening. Additionally, a statistically significant improvement versus placebo was observed in the Montreal cognitive assessment (“MoCA”) and in the activity of daily living observed by a caregiver and measured by Alzheimer’s disease Cooperative Study Activities of Daily Living (“ADCS-ADL”). The study indicated potential preservation of brain volumes in some but not all AD related areas of brain. Brain magnetic resonance imaging ("MRI") results demonstrated a 49% reduction in brain volume loss and improvement in cerebral blood flow.

Previous wording

The results of the CLEAR MIND trial were accepted for oral presentation in the Featured Research Session at the 2024 Alzheimer’s Association International Conference (“AAIC”) in July 2024. The magnetic resonance imaging (“MRI”) results from this trial also were accepted for poster presentation at AAIC. These findings support both the safety and potential therapeutic benefit of Lomecel-BTM in managing mild AD, and we believe lays the groundwork for subsequent trials in this indication. Based on these results, the FDA granted Regenerative Medicine Advanced Therapeutics (RMAT) Designation on July 9, 2024, and Fast Track designation on July 17, 2024, to Lomecel-B™ for the treatment of mild Alzheimer’s Disease.

Current wording

The results of the CLEAR MIND trial were accepted for oral presentation in the Featured Research Session at the 2024 Alzheimer’s Association International Conference (“AAIC”) in July 2024. The MRI results from this trial also were accepted for poster presentation at AAIC. These findings support both the safety and potential therapeutic benefit of Lomecel-BTM in managing mild AD, and we believe lays the groundwork for subsequent trials in this indication. Based on these results, the FDA granted Regenerative Medicine Advanced Therapeutics (RMAT) Designation on July 9, 2024, and Fast Track designation on July 17, 2024, to Lomecel-B™ for the treatment of mild AD.

Previous wording

Hypoplastic Left Heart Syndrome (HLHS). The FDA granted Lomecel-B™ for the treatment of HLHS a Rare Pediatric Disease (“RPD”) Designation (on November 8, 2021), Orphan Drug Designation (“ODD”) (on December 2, 2021), and Fast Track Designation (on August 24, 2022). HLHS is a rare congenital heart condition affecting approximately 1,000 newborns in the US annually. HLHS is a birth defect that affects normal blood flow through the heart. As the baby develops during pregnancy, the left side of the heart does not form correctly so that babies are born with a single ventricle. It is one type of congenital heart defect present at birth. Because a baby with this defect needs surgery or other procedures soon after birth, HLHS is considered a critical congenital heart defect. To prevent certain death shortly after birth, these babies undergo a series of three heart surgeries (staged surgical palliation) that reconfigures the single right ventricle) to support systemic circulation. Despite these life-saving surgeries, HLHS patients nevertheless still have high early mortality and morbidity rates due primarily to heart failure.

Current wording

Hypoplastic Left Heart Syndrome (HLHS). The FDA granted Lomecel-B™ for the treatment of HLHS a Rare Pediatric Disease (“RPD”) Designation (on November 8, 2021), Orphan Drug Designation (“ODD”) (on December 2, 2021), and Fast Track Designation (on August 24, 2022). HLHS is a rare congenital heart condition affecting approximately 1,000 newborns in the US annually. HLHS is a birth defect that affects normal blood flow through the heart. As the baby develops during pregnancy, the left side of the heart does not form correctly so that babies are born with a single ventricle. It is one type of congenital heart defect present at birth. Because a baby with this defect needs surgery or other procedures soon after birth, HLHS is considered a critical congenital heart defect. To prevent certain death shortly after birth, these babies undergo a series of three heart surgeries (staged surgical palliation) that reconfigures the single RV) to support systemic circulation. Despite these life-saving surgeries, HLHS patients nevertheless still have high early mortality and morbidity rates due primarily to heart failure.

Previous wording

We are currently conducting a Phase 2b clinical trial (ELPIS II) under FDA IND 017677. ELPIS II is a multi-center, randomized, double-blind, controlled clinical trial designed to evaluate Lomecel-B™ as an adjunct therapy to the standard-of-care second-stage HLHS heart reconstructive surgery which is typically performed at 4-6 months after birth. The primary objective is to evaluate change in right ventricular ejection fraction after Lomecel-B™ treatment versus standard-of-care surgery alone (38 subjects total: 19 per arm) at 12 months. This trial is over 70% enrolled and is funded in part by the NHLBI/NIH. While we cannot predict a specific time when the trial will be fully enrolled, the current target to complete enrollment is by the end of 2024.

Current wording

We are currently conducting a Phase 2b clinical trial (ELPIS II) under FDA IND 017677. ELPIS II is a multi-center, randomized, double-blind, controlled clinical trial designed to evaluate Lomecel-B™ as an adjunct therapy to the standard-of-care second-stage HLHS heart reconstructive surgery which is typically performed at 4-6 months after birth. The primary objective is to evaluate change in right ventricular ejection fraction after Lomecel-B™ treatment versus standard-of-care surgery alone (38 subjects total: 19 per arm) at 12 months. This trial is more than 80% enrolled and is funded in part by the NHLBI/NIH. Enrollment completion is currently targeted for the end of 2024. However, given the relatively small patient population, clinical trial enrollment timing for rare diseases like HLHS is difficult to predict and full enrollment may occur in the first quarter of 2025.

Previous wording

ELPIS II is a next-step trial to our completed 10-patient open-label Phase 1 trial (ELPIS I) under the same IND. This Phase 1 trial was designed to evaluate the safety and tolerability of Lomecel-B™ as an adjunct to the second-stage HLHS surgery, and to obtain preliminary evidence of Lomecel-B’s effect to support a next-phase trial. The primary safety endpoint was met: no major adverse cardiac events (“MACE”) or treatment-related infections during the first month post-treatment, and no triggering of stopping rules. Furthermore, fluid-based and imaging biomarker data supported multiple potentially relevant mechanisms-of-action of Lomecel-B™, and the potential to improve post-surgical heart function. In addition to the 12-month follow-up evaluation on ELPIS, we continue to follow these patients on an annual basis for the survival status As of June 2024, all 10 patients have survived (100%), seven of the patients have reached the age of five and have successfully undergone the third-stage surgery, and two of them have reached the age of six years old, all without the need for a heart transplantation. Based on historical data, the incidence of interstage attrition between the Glenn operation (Stage 2) and Fontan (Stage 3) ranges from 6% to 12% with the most common cause of death being RV dysfunction. Longer-term follow-up studies showed that the transplant-free survival to age 15 is only approximately 50 % in these patients. We intended to continue to follow-up with all patients who participated in ELPIS I and ELPIS II studies for up to an additional five years, until all patients reach ten years of age to evaluate the transplant-free survival and additional data on the patients neurodevelopment, and cardiac function.

Current wording

ELPIS II is a next-step trial to our completed 10-patient open-label Phase 1 trial (ELPIS I) under the same IND. This Phase 1 trial was designed to evaluate the safety and tolerability of Lomecel-B™ as an adjunct to the second-stage HLHS surgery, and to obtain preliminary evidence of Lomecel-B’s effect to support a next-phase trial. The primary safety endpoint was met: no major adverse cardiac events (“MACE”) or treatment-related infections during the first month post-treatment, and no triggering of stopping rules. Furthermore, fluid-based and imaging biomarker data supported multiple potentially relevant mechanisms-of-action of Lomecel-B™, and the potential to improve post-surgical heart function. In addition to the 12-month follow-up evaluation on ELPIS, we continue to follow these patients on an annual basis for the survival status As of September 2024, all 10 patients have survived (100%), seven of the patients have reached the age of five and have successfully undergone the third-stage surgery, and two of them have reached the age of six years old, all without the need for a heart transplantation. Based on historical data, the incidence of interstage attrition between the Glenn operation (Stage 2) and Fontan (Stage 3) ranges from 6% to 12% with the most common cause of death being RV dysfunction. Longer-term follow-up studies showed that the transplant-free survival to age 15 is only approximately 50 % in these patients.

Previous wording

Alzheimer’s disease. AD, a devastating neurologic disease leading to cognitive decline, currently has limited therapeutic options. An estimated 6.7 million Americans aged 65 and older have AD, and this number is projected to more than double by 2060. Lomecel-B™ treated patients showed an overall slowing/prevention of disease worsening compared to placebo in the completed Phase 2a study (CLEAR MIND Trial) as previously detailed in this report, and met its primary endpoint of safety. These results are consistent with those of our earlier Phase I study 2. Based on these results, the FDA granted RMAT Designation and Fast Track designation to Lomecel-B™ for the treatment of mild Alzheimer’s Disease. As previously indicated, we intend to forge strategic collaborations, consider potential partnerships, or pursue other available pathways or opportunities for the advancement of Lomecel-B™ in addressing AD.

Current wording

Alzheimer’s disease. AD, a devastating neurologic disease leading to cognitive decline, currently has limited therapeutic options. An estimated 6.7 million Americans aged 65 and older have AD, and this number is projected to more than double by 2060. Lomecel-B™ treated patients showed an overall slowing/prevention of disease worsening compared to placebo in the completed Phase 2a study (CLEAR MIND Trial) as previously detailed in this report and met its primary endpoint of safety. These results are consistent with those of our earlier Phase I study 2. Based on these results, the FDA granted RMAT Designation and Fast Track designation to

Previous wording

We have previously completed two U.S. clinical trials under FDA IND 016644. One is a multicenter, randomized, placebo-controlled Phase 2b trial which showed that a single infusion of Lomecel-B™ significantly improved 6-Minute Walk Test (“6MWT”) distance 9 months after infusion (although results were inconclusive at six months after infusion), and also showed a dose-dependent increase in 6MWT distance 6 months after infusion. The second is a multicenter, randomized, placebo-controlled Phase 1/2 trial (“HERA Trial”) intended primarily to evaluate safety, and explore the effect Lomecel-B™ may have on specific biomarkers of immune system function in older, frail individuals receiving the high dose influenza vaccine, as well as to evaluate the potential effects of Lomecel-B™ on signs and symptoms of Aging Frailty. Results from this study showed that Lomecel-B™ was generally safe and well tolerated in patients with Aging-related Frailty. Additionally, hemagglutinin inhibition (“HAI”) assay results in the Lomecel-B™ and placebo groups to influenza were not statistically different, indicating Lomecel-B™ does not suppress the immune system.

Current wording

We have previously completed two U.S. clinical trials under FDA IND 016644. One is a multicenter, randomized, placebo-controlled Phase 2b trial which showed that a single infusion of Lomecel-B™ significantly improved 6-Minute Walk Test (“6MWT”) distance 9 months after infusion (although results were inconclusive at six months after infusion), and also showed a dose-dependent increase in 6MWT distance 6 months after infusion. The second is a multicenter, randomized, placebo-controlled Phase 1/2 trial (“HERA Trial”) intended primarily to evaluate safety, and explore the effect Lomecel-B™ may have on specific biomarkers of immune system function in older, frail individuals receiving the high dose influenza vaccine, as well as to evaluate the potential effects of Lomecel-B™ on signs and symptoms of Aging-related Frailty. Results from this study showed that Lomecel-B™ was generally safe and well tolerated in patients with Aging-related Frailty. Additionally, hemagglutinin inhibition (“HAI”) assay results in the Lomecel-B™ and placebo groups to influenza were not statistically different, indicating Lomecel-B™ does not suppress the immune system.

Previous wording

Related cost of revenues was $0.1 million for the three-month periods ended June 30, 2024 and 2023. This resulted in a gross profit of approximately $0.3 million for the three months ended June 30, 2024, an increase of $0.2 million, or 270%, when compared with a gross profit of $0.1 million for 2023.

Current wording

Related cost of revenues was $0.1 million for the three months ended September 30, 2024 and 2023. This resulted in a gross profit of approximately $0.7 million for the three months ended September 30, 2024, an increase of $0.6 million, or greater than 100%, compared to a gross profit of less than $0.1 million in 2023.

Previous wording

General and Administrative Expense: General and administrative expenses for the six months ended June 30, 2024 decreased to approximately $4.3 million, compared to $5.5 million for the same period in 2023. The decrease of approximately $1.2 million, or 22%, was primarily related to a decrease in personnel expenses as a result of lower severance and stock compensation costs in 2024.

Current wording

General and Administrative Expense: General and administrative expenses for the three months ended September 30, 2024 decreased to approximately $3.1 million, compared to $3.3 million for the same period in 2023. This decrease of approximately $0.2 million, or 7%, was primarily due to lower legal and other administrative expenses, partially offset by higher stock compensation costs in 2024.

Previous wording

Research and Development Expenses: Research and development expenses for the three months ended June 30, 2024 decreased to approximately $1.7 million, from approximately $2.3 million for the same period in 2023. The decrease of $0.6 million, or 25%, was primarily due to a decrease of $0.7 million in research and development expenses being incurred for the now-completed CLEAR MIND Alzheimer’s disease clinical trial, and reduced costs for the aging-related frailty clinical trial following our decision to discontinue trial activities in Japan, and reduced cost of supplies of $0.2 million. These reductions were partially offset by $0.2 million of higher compensation and benefit costs and $0.1 million of higher equity-based compensation expenses allocated to research and development expenses. Research and development expenses consisted primarily of the following items (less those expenses allocated to the cost of revenues for the grants) (in thousands):

Current wording

Research and Development Expenses: Research and development expenses for the three months ended September 30, 2024 increased to approximately $2.2 million from approximately $1.8 million for the same period in 2023. The increase of $0.4 million, or 20%, was primarily due to $0.5 million of higher compensation and benefit costs and $0.3 million in additional equity-based compensation expenses allocated to research and development expenses. These increases were partially offset by a $0.6 million decrease in expenses related to the now-completed CLEAR MIND Alzheimer’s disease clinical trial, as well as reduced costs for the Aging-related frailty clinical trial following our decision to discontinue trial activities in Japan.

Previous wording

Other Income (Expense): Other income for the three months ended June 30, 2024 was less than $0.1 million. Other income consisted of less than $0.1 million from interest earned on money market funds and marketable securities. Other income for the three months ended June 30, 2023 was $0.1 million as a result of gains from marketable securities.

Current wording

Other Income (Expense): Other income for the three months ended September 30, 2024 was $0.2 million, primarily consisting of interest earned on money market funds. Other income for the three months ended September 30, 2023 was less than $0.1 million.

Previous wording

Net Loss: Net loss decreased to approximately $3.4 million for the three months ended June 30, 2024 from a net loss of $5.6 million for the same period in 2023. The decrease in the net loss of $2.2 million, or 40%, was for the reasons outlined above.

Current wording

Net Loss: Net loss decreased to approximately $4.4 million for the three months ended September 30, 2024 from $5.1 million for the same period in 2023. This decrease of $0.7 million, or 13%, was due to the factors outlined above.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023, together with the changes in those items in dollars (in thousands):

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023, together with the changes in those items in dollars (in thousands):

Previous wording

Related cost of revenues was $0.3 million for the six-month periods ended June 30, 2024 and 2023. This resulted in a gross profit of approximately $0.7 million for the six months ended June 30, 2024, an increase of $0.5 million, or 298%, when compared with a gross profit of $0.2 million for 2023.

Current wording

Related cost of revenues was $0.4 million for the nine months ended September 30, 2024 and 2023. This resulted in a gross profit of approximately $1.3 million for the nine months ended September 30, 2024, an increase of $1.1 million, or 506%, compared to a gross profit of $0.2 million in 2023.

Previous wording

General and Administrative Expense: General and administrative expenses for the three months ended June 30, 2024 decreased to approximately $2.1 million, compared to $3.5 million for the same period in 2023. The decrease of approximately $1.4 million, or 40%, was primarily related to a decrease in personnel expenses as a result of lower severance and stock compensation costs in 2024.

Current wording

General and Administrative Expense: General and administrative expenses for the nine months ended September 30, 2024 decreased to approximately $7.4 million, compared to $8.9 million for the same period in 2023. This decrease of approximately $1.5 million, or 16%, was primarily due to lower personnel expenses as a result of reduced severance, legal and other administrative expenses, partially offset by higher stock compensation costs in 2024.

Previous wording

Research and Development Expenses: Research and development expenses for the six months ended June 30, 2024 decreased to approximately $3.9 million, from approximately $5.1 million for the same period in 2023. The decrease of $1.2 million, or 22%, was primarily due to a decrease of $1.3 million in research and development expenses being incurred for the completed CLEAR MIND Alzheimer’s disease clinical trial and reduced costs for the aging-related frailty clinical trial following our decision to discontinue trial activities in Japan, reduced cost of supplies of $0.4 million and $0.1 million of lower equity-based compensation expenses allocated to research and development expenses. These reductions were partially offset by $0.6 million of higher compensation and benefit costs. Research and development expenses consisted primarily of the following items (less those expenses allocated to the cost of revenues for the grants) (in thousands):

Current wording

Research and Development Expenses: Research and development expenses for the nine months ended September 30, 2024 decreased to approximately $6.1 million, from approximately $6.9 million for the same period in 2023. This decrease of $0.8 million, or 11%, was primarily driven by a reduction of $1.8 million in expenses related to the completed CLEAR MIND Alzheimer’s disease clinical trial, reduced costs for the Aging-related frailty clinical trial following our decision to discontinue trial activities in Japan, and a $0.4 million decrease in supply costs. These reductions were partially offset by $1.1 million in higher compensation and benefit costs and a $0.2 million increase in equity-based compensation expenses allocated to research and development . Research and development expenses consisted primarily of the following items (less those expenses allocated to the cost of revenues for the grants) (in thousands):

Previous wording

Other Income (Expense): Other income for the six months ended June 30, 2024 was $0.1 million. Other income consisted of $0.1 million from interest earned on money market funds and marketable securities. Other income for the six months ended June 30, 2023 was $0.1 million as result of gains from marketable securities.

Current wording

Other Income (Expense): Other income for the nine months ended September 30, 2024 was $0.3 million, primarily consisting of interest earned on money market funds and marketable securities. Other income for the same period in 2023 was $0.2 million, primarily due to gains from marketable securities.

Previous wording

Net Loss: Net loss decreased to approximately $7.5 million for the six months ended June 30, 2024 from a net loss of $10.3 million for the same period in 2023. The decrease in the net loss of $2.8 million, or 27%, was for the reasons outlined above.

Current wording

Net Loss: Net loss decreased to approximately $11.9 million for the nine months ended September 30, 2024, from $15.3 million for the same period in 2023. This decrease of $3.5 million, or 23%, was due to the factors outlined above.

Previous wording

Operating Activities*.* We have incurred losses since inception. Net cash used in operating activities for the six months ended June 30, 2024, was $7.7 million, consisting primarily of our net loss of $7.5 million and payments of $0.4 million in prepaid expenses and other assets, and $0.5 million for accrued expenses. This was partially offset by non-cash expenses of $0.5 million for equity-based compensation and $0.5 million for depreciation and amortization. Net cash used in operating activities for the six months ended June 30, 2023, was $10.4 million, consisting primarily of our net loss of $10.3 million, payments of $1.1 million in prepaid and other assets and non-operating lawsuit of $1.4 million. This was partially offset by non-cash expenses of $1.1 million in equity-based compensation expenses, $0.5 million in depreciation and amortization, and an increase in accrued expenses of $0.7 million.

Current wording

Operating Activities. We have incurred losses since inception. Net cash used in operating activities for the nine months ended September 30, 2024 was $10.5 million, consisting primarily of our net loss of $11.9 million and payments of $0.2 million in prepaid expenses and other assets, and $0.7 million for accrued expenses. This was partially offset by non-cash expenses of $1.9 million for equity-based compensation and $0.7 million for depreciation and amortization. Net cash used in operating activities for the nine months ended September 30, 2023 was $15.0 million, consisting primarily of our net loss of $15.4 million, payments of $0.6 million in prepaid and other assets and non-operating lawsuit of $1.4 million. This was partially offset by non-cash expenses of $1.6 million in equity-based compensation expenses, $0.7 million in depreciation and amortization, and an increase in accrued expenses of $0.8 million.

Previous wording

Investing Activities*.* Net cash used in investing activities for the six months ended June 30, 2024, was less than $0.1 million consisting primarily of the redemption of marketable securities, which was partially offset by purchases of property and equipment and intangible assets. Net cash provided by investing activities for the six months ended June 30, 2023 was $2.8 million, consisting primarily of proceeds from the sale of marketable securities.

Current wording

Investing Activities. Net cash used in investing activities for the nine months ended September 30, 2024 was $0.5 million consisting primarily of the purchases of property and equipment and intangible assets, which was partially offset by the redemption of marketable securities. Net cash provided by investing activities for the nine months ended September 30, 2023 was $6.6 million, consisting primarily of proceeds from the sale of marketable securities.

Previous wording

Financing Activities*.* Net cash provided by financing activities for the six months ended June 30, 2024 was approximately $15.1 million for proceeds from the issuance of common stock of $4.7 million and warrants exercised of $10.3 million. Net cash used in financing activities for the six months ended June 30, 2023 was $0.1 million for the payment of taxes upon vesting of RSUs.

Current wording

Financing Activities. Net cash provided by financing activities for the nine months ended September 30, 2024 was approximately $28.8 million for proceeds from the issuance of common stock of $12.9 million and warrants exercised of $16.2 million, which was partially offset by the payment of taxes upon vesting of RSUs. Net cash used in financing activities for the nine months ended September 30, 2023 was $0.2 million for the payment of taxes upon vesting of RSUs.

Previous wording

To date, we have financed our operations primarily through our IPO, public and privately placed equity financings, grant awards, and fees generated from the Bahamas Registry Trial and contract manufacturing services. Since we were formed, we have raised approximately $116.8 million in gross proceeds from the issuance of equity. At June 30, 2024, the Company had cash and cash equivalents of $12.4 million and working capital of approximately $10.2 million.

Current wording

To date, we have financed our operations primarily through our IPO, public and privately placed equity financings, grant awards, and fees generated from the Bahamas Registry Trial and contract manufacturing services. Since we were formed, we have raised approximately $132.2 million in gross proceeds from the issuance of equity. At September 30, 2024, the Company had cash and cash equivalents of $22.8 million and working capital of approximately $20.7 million.

Previous wording

Following the capital raises in April and June 2024 as detailed below in the section entitled “LIQUIDITY AND CAPITAL RESOURCES”, and direct offering and warrant exercises in July 2024, which resulted in gross proceeds of $32.9 million and net proceeds of $29.4 million after deducting placement agent fees but before other deductions for offering expenses as discussed below, we believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements through the fourth quarter of 2025. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect. We are actively seeking financing opportunities to extend our cash runaway while taking measures to reduce our cash expenditures as we focus our resources on our primary strategic program in HLHS. These cost saving measures include the discontinuation of our Aging-related Frailty clinical trial in Japan, related staff reductions, and continued prudent management of discretionary spend.

Current wording

Following the capital raises from a registered direct offering and warrant exercises in July 2024 as well as an inducement transaction in September 2024, as detailed below in the section entitled “Capital Raising Efforts”, which resulted in gross proceeds of $15.4 million and net proceeds of $14.0 million after deducting placement agent fees and other deductions for offering expenses as discussed below, we believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements through the fourth quarter of 2025 based on our current operating budget and cash flow forecast. However, as a result of our successful Type C meeting with the U.S. FDA in August 2024 with respect to the HLHS regulatory pathway, we have started to ramp up Biologics License Application (BLA) enabling activities as we currently anticipate a potential filing with the FDA in 2026 if the current ELPIS II trial is successful. To the extent that our operating expenses and capital expenditure requirements accelerate in calendar 2025 as a result of these activities, including CMC (Chemistry, Manufacturing, and Controls) and manufacturing readiness, there will be a need to increase our current proposed spend and further increase our capital investments. We intend to seek additional financing/capital raises/non-dilutive funding options to support these activities, and current cash projections may be impacted by these ramped up activities and any financing transactions entered into. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect. We are actively seeking financing opportunities to extend our cash runaway while taking measures to reduce our cash expenditures as we focus our resources on our primary strategic program in HLHS. These cost saving measures include the discontinuation of our Aging-related Frailty clinical trial in Japan, related staff reductions, and continued prudent management of discretionary spend.

Previous wording

On July 10, 2024, certain holders of the June private placement warrants exercised the same to purchase an aggregate of 150,000 shares of Class A common stock for cash (the “July 10 warrant exercise”). Accordingly, on July 17, 2024, we issued to the placement agent additional warrants to purchase up to 10,500 shares of Class A common stock, equal to 7.0% of the aggregate number of shares of Class A common stock issued in the July 10 warrant exercise (the “first tranche July ordinary course placement agent warrants”). The first tranche July ordinary course placement agent warrants have substantially the same terms as the private placement agent warrants issued in June, except that the first tranche July ordinary course placement agent warrants have an exercise price of $3.125 per share and expire July 17, 2026.

Current wording

On July 10, 2024, certain holders of the June Inducement Warrants exercised the same to purchase an aggregate of 150,000 shares of Class A common stock for cash (the “July 10 warrant exercise”). Accordingly, on July 17, 2024, we issued to the placement agent additional warrants to purchase up to 10,500 shares of Class A common stock, equal to 7.0% of the aggregate number of shares of Class A common stock issued in the July 10 warrant exercise (the “first tranche July ordinary course placement agent warrants”). The first tranche July ordinary course placement agent warrants have substantially the same terms as the private placement agent warrants issued in June, except that the first tranche July ordinary course placement agent warrants have an exercise price of $3.125 per share and expire July 17, 2026. Separately, on July 10, 2024, a holder of Series C Warrants issued in an April 24 inducement letter agreement transaction exercised the same for 50,000 shares of common stock for cash (the "July Series C warrant exercise").

Previous wording

On July 17, 2024, holders of the June private placement warrants exercised June private placement warrants to purchase an aggregate of 2,319,186 shares of Class A common stock for cash (the “July 17 warrant exercise” and together with the July 10 warrant exercise, the “July warrant exercises”). Accordingly, on July 24, 2024, we issued to the placement agent additional warrants to purchase up to 162,344 shares of Class A common stock, equal to 7.0% of the aggregate number of shares of Class A common stock issued in the July 17 warrant exercise (the “second tranche July ordinary course placement agent warrants”, and together with the first tranche July ordinary course placement agent warrants, the “July ordinary course placement agent warrants”, and collectively with the July transaction placement agent warrants, the “July placement agent warrants”). The second tranche July ordinary course placement agent warrants have substantially the same terms as the first tranche July ordinary course placement agent warrants, except that the second tranche July ordinary course placement agent warrants expire July 24, 2026.

Current wording

On July 17, 2024, holders of the June Inducement Warrants exercised June Inducement Warrants to purchase an aggregate of 2,319,186 shares of Class A common stock for cash (the “July 17 warrant exercise” and together with the July Series C warrant exercise and the July 10 warrant exercise, collectively, the “July warrant exercises”). Accordingly, on July 24, 2024, we issued to the placement agent additional warrants to purchase up to 162,344 shares of Class A common stock, equal to 7.0% of the aggregate number of shares of Class A common stock issued in the July 17 warrant exercise (the “second tranche July ordinary course placement agent warrants”, and together with the first tranche July ordinary course placement agent warrants, the “July ordinary course placement agent warrants”, and collectively with the July transaction placement agent warrants, the “July placement agent warrants”).

Previous wording

The gross proceeds to the Company from the July 10 warrant exercise and July 17 warrant exercise of June private placement warrants, inclusive of the payment consideration for such June private placement warrants, were approximately $6.2 million, before deducting placement agent fees payable by the Company.

Current wording

The gross proceeds to the Company from the July warrant exercises, inclusive of the payment consideration for such warrants, were approximately $6.3 million, before deducting placement agent fees payable by the Company.

Previous wording

In a concurrent private placement (the “July private placement” and together with the July registered direct offering, the “July offering”), we also sold unregistered Class A common stock warrants to purchase up to an aggregate of 2,236,026 shares of our Class A common stock (the “July private placement warrants”). The unregistered July private placement warrants have an exercise price of $3.90 per share, became exercisable on July 19, 2024, and expire on July 20, 2026. Additionally the Company agreed to issue to the placement agent, or its designees, warrants to purchase up to an aggregate of 156,522 shares of Class A common stock (the “Placement Agent Warrants”), equal to 7.0% of the aggregate number of shares of Class A common stock sold in the offering, which have substantially the same terms as the unregistered July private placement warrants, except that the Placement Agent Warrants have an exercise price of $5.0313 per share.

Current wording

In a concurrent private placement (the “July private placement” and together with the July registered direct offering, the “July offering”), we also sold unregistered Class A common stock warrants to purchase up to an aggregate of 2,236,026 shares of our Class A common stock (the “July private placement warrants”). The unregistered July private placement warrants have an exercise price of $3.90 per share, became exercisable on July 19, 2024, and expire on July 20, 2026. Additionally the Company agreed to issue to the placement agent, or its designees, warrants to purchase up to an aggregate of 156,522 shares of Class A common stock (the “July offering placement agent warrants”), equal to 7.0% of the aggregate number of shares of Class A common stock sold in the offering, which have substantially the same terms as the unregistered July private placement warrants, except that the July offering placement agent warrants have an exercise price of $5.0313 per share.

Previous wording

The gross proceeds to the Company from the July registered direct offering and concurrent private placement were approximately $9.0 million, before deducting placement agent fees and other offering expenses payable by the Company.

Current wording

The gross proceeds to the Company from the July offering were approximately $9.0 million, before deducting placement agent fees and other offering expenses payable by the Company.

Previous wording

As of June 30, 2024, we have $1.7 million in operating lease obligations and $0 million in contract research organization obligations due to the termination of our active master services agreements with third parties that were previously engaged to conduct its clinical trials and manage clinical research programs and clinical development services. This termination was due to the Company’s decision to discontinue trial activities in Japan. We enter into contracts in the normal course of business with third-party contract organizations for clinical trials, preclinical studies, manufacturing and other services and products for operating purposes. These contracts generally provide for termination following a certain period after notice and therefore we believe that our non-cancelable obligations under these agreements are not material.

Current wording

As of September 30, 2024, we have $1.6 million in operating lease obligations and $0 in contract research organization obligations due to the termination of our active master services agreements with third parties that were previously engaged to conduct its clinical trials and manage clinical research programs and clinical development services. This termination was due to the Company’s decision to discontinue trial activities in Japan. We enter into contracts in the normal course of business with third-party contract organizations for clinical trials, preclinical studies, manufacturing and other services and products for operating purposes. These contracts generally provide for termination following a certain period after notice and therefore we believe that our non-cancelable obligations under these agreements are not material.