MEDICINOVA INC

Previous 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.

Current wording

We have incurred significant net losses since our inception. As of September 30, 2024, from inception, our accumulated deficit was $423.9 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 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.

Current 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.

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 six months ended June 30, 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 nine months ended September 30, 2024.

Previous wording

General and administrative expenses were $1.4 million and $1.6 million for the three months ended June 30, 2024 and 2023, respectively. The decrease of $0.2 million was primarily driven by decreases in performance-based stock option expense and payroll costs from a reduction in headcount, partially offset by an increase in accounting expenses.

Current wording

General and administrative expenses were $1.5 million and $1.4 million for the three months ended September 30, 2024 and 2023, respectively. The increase of $0.1 million was primarily driven by increases in performance-based stock option expense and increases in professional fees, partially offset by a reduction in headcount.

Previous wording

Interest income was $0.8 million and $1.0 million for the six months ended June 30, 2024 and 2023, respectively. The decrease of $0.2 million was primarily driven by lower interest rates on available cash in 2024 compared to cash and bank certificates of deposit in 2023. Interest income consists of interest earned on our cash and cash equivalents and investments.

Current wording

Interest income was $0.4 million and $0.4 million for the three months ended September 30, 2024 and 2023, respectively. Interest income consists of interest earned on our cash and cash equivalents and investments.

Previous 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.

Current wording

Research, development and patents expenses were $5.3 million and $4.0 million for the nine months ended September 30, 2024 and 2023, respectively. The increase of $1.3 million was primarily due to an increase in MN-166 manufacturing costs. Additionally, during the nine months ended September 30, 2023, we received a $0.7 million payment from BARDA to partially reimburse us for pre-clinical study costs, which was recorded as an offset to MN-166 research and development expense.

Previous 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.

Current wording

General and administrative expenses were $4.2 million and $4.4 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease of $0.2 million was primarily driven by a decrease in performance-based stock option expense partially offset by an increase in professional fees.

Previous wording

Interest income was $0.4 million and $0.5 million for the three months ended June 30, 2024 and 2023, respectively. The decrease of $0.1 million was primarily driven by lower interest rates on available cash in 2024 compared to cash and bank certificates of deposit in 2023. Interest income consists of interest earned on our cash and cash equivalents and investments.

Current wording

Interest income was $1.3 million and $1.4 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease of $0.1 million was primarily driven by lower interest rates on available cash in 2024 compared to cash and bank certificates of deposit in 2023. Interest income consists of interest earned on our cash and cash equivalents and investments.

Previous 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.

Current wording

Net cash used in operating activities during the nine months ended September 30, 2024 was $8.7 million compared to $6.9 million during the same period in 2023. The $1.8 million change is primarily related to the increase in prepaid expenses and other assets for those periods, combined with a larger net loss primarily due to no revenues during the nine months ended September 30, 2024.

Previous 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.

Current wording

Net cash provided by investing activities during the nine months ended September 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 nine months ended September 30, 2023.

Previous 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.

Current wording

As of September 30, 2024, we had available cash and cash equivalents of $42.3 million and working capital of $40.7 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

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

Current wording

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