Longeveron Inc

Previous wording

We are a clinical stage biotechnology company developing regenerative medicines to address unmet medical needs. The Company’s lead investigational product is Lomecel-B™, an allogeneic Mesenchymal Stem Cell (“MSC”) formulation sourced from the bone marrow of young, healthy adult donors. Lomecel-B™ has multiple potential mechanisms of action that promote tissue repair and healing with broad potential applications across a spectrum of disease areas. The underlying mechanism(s) of action that may lead to the tissue repair programs include the stimulation of new blood vessel formation, modulation of the immune system, reduction in tissue fibrosis, and the stimulation of endogenous cells to divide and increase the numbers of certain specialized cells in the body.

Current wording

We are a clinical stage biotechnology company developing regenerative medicines to address unmet medical needs. The Company’s lead investigational product is Lomecel-B™, an allogeneic Medicinal Signaling Cell (“MSC”) formulation sourced from the bone marrow of young, healthy adult donors. Lomecel-B™ has multiple potential mechanisms of action that promote tissue repair and healing with broad potential applications across a spectrum of disease areas. The underlying mechanism(s) of action that may lead to the tissue repair programs include the stimulation of new blood vessel formation, modulation of the immune system, reduction in tissue fibrosis, and the stimulation of endogenous cells to divide and increase the numbers of certain specialized cells in the body.

Previous wording

We currently have three pipeline indications: Hypoplastic Left Heart Syndrome (“HLHS”), Alzheimer’s disease (“AD”), and Aging-related Frailty. Our mission is to advance Lomecel-B™ and other cell-based product candidates into pivotal Phase 3 trials, with the goal of achieving regulatory approvals, subsequent commercialization, and broad use by the healthcare community.

Current wording

We currently have three pipeline indications: Hypoplastic Left Heart Syndrome (“HLHS”), Alzheimer’s disease (“AD”), and Aging-related Frailty. Our mission is to advance Lomecel-B™ and other cell-based product candidates into pivotal or Phase 3 trials, with the goal of achieving regulatory approvals, subsequent commercialization, and broad use by the healthcare community.

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 March 31, 2024 the Company had an accumulated deficit of $89.1 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 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.

Previous wording

With the completion of the Offerings in April 2024, we believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2024. 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, 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.

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 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 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.

Previous wording

In September 2023, we completed our Phase 2a AD clinical trial, known as the CLEAR MIND trial. This trial enrolled patients with mild Alzheimer’s disease and was designed as a randomized, double-blind, placebo-controlled study across ten U.S. centers. Our primary objective was to assess safety, and we tested three distinct Lomecel-BTM dosing regimens against placebo.

Current wording

In September 2023, we completed our Phase 2a AD clinical trial, known as the CLEAR MIND trial. This trial enrolled patients with mild AD and was designed as a randomized, double-blind, placebo-controlled study across ten U.S. centers. Our primary objective was to assess safety, and we tested three distinct Lomecel-BTM multiple dosing regimens against placebo.

Previous wording

The study demonstrated positive results. Notably, 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 Alzheimer’s disease score (“CADS”) for both the low-dose Lomecel-BTM group 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 results of the CLEAR MIND trial have been accepted for oral presentation in the Featured Research Session at the 2024 Alzheimer’s Association International Conference (“AAIC”) to be held in July 2024. The magnetic resonance imaging (“MRI”) results from this trial have also been accepted for poster presentation at AAIC. These findings support both the safety and potential therapeutic benefit of Lomecel-BTMin managing mild Alzheimer’s disease, and we believe lays a strong groundwork for subsequent trials in this indication.

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 MRI results demonstrated a 49% reduction in brain volume loss and improvement in cerebral blood flow.

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. 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 converts the normally 4-chamber heart into a 3-chamber one with a single ventricle (the right ventricle) supporting 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 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.

Previous wording

We are currently conducting an ongoing 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). This trial is over 60% 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 plan is that enrollment will be completed in 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 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.

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™ 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. As of February 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, over 15% of patients would be expected to have received a heart transplant or have died within three years after the second-stage surgery, rising to nearly 20% by five years. We intended to continue to follow-up with these patients for up to an additional five years, until all patients reach ten years of age.

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 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.

Previous wording

Alzheimer’s disease. AD, a devastating neurologic disease leading to cognitive decline, currently has very 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. As previously indicated, we are actively in pursuit of a partnership to propel our AD initiative forward.

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 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.

Previous wording

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, business development and administrative functions. General and administrative expenses also include public company related expenses; legal fees relating to corporate matters; insurance costs; professional fees for accounting, auditing, tax and consulting services; travel expenses; and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs. General and administrative costs also include royalty and license fees associated with our agreements with the University of Miami as well as attending and sponsoring industry, investment, organization and medical conferences and events.

Current wording

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, business development and administrative functions. General and administrative expenses also include public company related expenses; Board of Director fees; legal fees relating to corporate matters; insurance costs; professional fees for accounting, auditing, tax and consulting services; travel expenses; and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs. General and administrative costs also include royalty and license fees associated with our agreements with the University of Miami as well as attending and sponsoring industry, investment, organization and medical conferences and events.

Previous wording

Revenues, Cost of Revenues and Gross Profit: Revenues for the three months ended March 31, 2024 and 2023 were $0.5 million and $0.3 million, respectively. 2024 revenues increased $0.2 million, or 96%, when compared to 2023 mainly as a result of increased participant demand for our Bahamas Registry Trial. Grant revenue for the three months ended March 31, 2024 and 2023 was $0 and less than $0.1 million, respectively. Clinical trial revenue, which is derived from the Bahamas Registry Trial, for the three months ended March 31, 2024 and 2023 was $0.5 million and $0.2 million, respectively. Clinical trial revenue for the three months ended March 31, 2024 increased by $0.3 million, or 116%, when compared to 2023 as a result of increased participant demand. Contract manufacturing revenue for the three months ended March 31, 2024 was less than $0.1 million and $0, respectively.

Current wording

Revenues, Cost of Revenues and Gross Profit: Revenues for the three months ended June 30, 2024 and 2023 were $0.5 million and $0.2 million, respectively. 2024 revenues increased $0.3 million, or 116%, when compared to 2023 mainly as a result of increased participant demand for our Bahamas Registry Trial. Clinical trial revenue, which is derived from the Bahamas Registry Trial, for the three months ended June 30, 2024 and 2023 was $0.3 million and $0.2 million, respectively. Clinical trial revenue for the three months ended June 30, 2024 increased by $0.1 million, or 32%, when compared to 2023 as a result of increased participant demand. Contract manufacturing revenue for the three months ended June 30, 2024 was $0.2 million from our first manufacturing services contract with Secretome Therapeutics.

Previous wording

Related cost of revenues was $0.2 million for the three month periods ended March 31, 2024 and 2023. The increase of less than $0.1 million, or 8%, was primarily due to the increase in the revenues earned from the Bahamas Registry Trials and reduced direct costs associated with our grants program. This resulted in a gross profit of approximately $0.3 million for the three months ended March 31, 2024, an increase of $0.2 million, or 333%, 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-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.

Previous wording

General and Administrative Expense: General and administrative expenses for the three months ended March 31, 2024 increased to approximately $2.2 million, compared to $2.0 million for the same period in 2023. The increase of approximately $0.2 million, or 9%, was primarily related to an increase in expenses related to professional fees.

Current 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.

Previous wording

Research and Development Expenses: Research and development expenses for the three months ended March 31, 2024 decreased to approximately $2.2 million, from approximately $2.8 million for the same period in 2023. The decrease of $0.6 million, or 20%, was primarily due to a decrease of $0.6 million in research and development expenses being incurred for the Alzheimer’s 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 $0.3 million, and a decrease of $0.2 million in equity-based compensation expenses allocated to research and development expenses. These reductions were partially offset by $0.4 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 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):

Previous wording

Other Income (Expense): Other income for the three months ended March 31, 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 March 31, 2023 was $0.1 million as result of gains from marketable securities.

Current 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.

Previous wording

Net Loss: Net loss decreased to approximately $4.1 million for the three months ended March 31, 2024 from a net loss of $4.6 million for the same period in 2023. The decrease in the net loss of $0.5 million, or 13%, was for the reasons outlined above.

Current 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.

Previous wording

Operating Activities*.*We have incurred losses since inception. Net cash used in operating activities for the three months ended March 31, 2024, was $3.1 million, consisting primarily of our net loss of $4.1 million and payments of $0.9 million in prepaid insurance expenses. This was partially offset by non-cash expenses of $0.3 million for equity-based compensation and $0.3 million for depreciation and amortization, and increases in accounts payable of $0.8 million, deferred revenue of $0.3 million, and accrued expenses of $0.2 million. Net cash used in operating activities for the three months ended March 31, 2023, was $5.8 million, consisting primarily of our net loss of $4.6 million, payments made to outstanding accounts payable of $1.2 million and $0.7 million in prepaid insurance expenses.

Current 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.

Previous wording

Investing Activities*.*Net cash provided by investing activities for the three months ended March 31, 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 three months ended March 31, 2023 was $0.3 million, consisting primarily of an increase inmarketable securities, which was partially offset by additions of intangible assets and purchases of equipment.

Current 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.

Previous wording

Financing Activities*.*Net cash provided by financing activities for the three months ended March 31, 2024 was approximately $0.1 million for proceeds from stock subscription receivable, which was partially offset for the payment of taxes upon vesting of restricted stock units (“RSUs”). Net cash used in financing activities for the three months ended March 31, 2023 was less than $0.1 million for the payment of taxes upon vesting of RSUs.

Current 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.

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 $83.9 million in gross proceeds from the issuance of equity. At March 31, 2024, the Company had cash and cash equivalents of $1.8 million, marketable securities of $0.4 million and working capital deficit of approximately $1.5 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 $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.

Previous wording

Following the capital raises in April 2024 which resulted in gross proceeds of $11.4 million and net proceeds of $10.3 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 into the fourth quarter of 2024. 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 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.

Previous wording

On April 8, 2024, we commenced a public offering (“the Offering”) of up to 661,149 shares of our Class A common stock and pre-funded warrants to purchase up to an aggregate of 1,572,894 shares of our Class A common stock (the “Pre-funded Warrants”). The Class A common stock and Pre-funded Warrants were sold together with warrants to purchase up to an aggregate of 2,234,043 shares of Class A common stock (the “Common Warrants”). The combined public Offering price was $2.35 per share of Class A common stock and $2.349 per Pre-funded Warrant and related Common Warrant. The Common Warrants are immediately exercisable and expire five years from the date of issuance. In connection with the Offering, the Company also entered into an agreement (the “Warrant Amendment Agreement”) with a holder (the “Holder”) of existing warrants to purchase shares of the Company’s Class A common stock, in consideration for the Holder’s participation in the Offering and purchase of securities in the Offering, and contingent upon the closing of the Offering and the Holder’s participation in the Offering, amend the Holder’s existing warrants to purchase up to (a) 242,425 shares of Class A common stock at an exercise price of $16.50 per share, issued on October 13, 2023 and expiring on April 13, 2029 (the “Series A Warrants”) and (b) 242,425 shares of Class A common stock at an exercise price of $16.50 per share, issued on October 13, 2023 and expiring on April 14, 2025 (the “Series B Warrants” and together with the Series A Warrants, the “Existing Warrants”) to (i) reduce the exercise price of the Existing Warrants to $2.35 per share and (ii) amend the expiration date of the Series A Warrants to five and one-half (5.5) years following the closing of the Offering and the Series B Warrants to eighteen (18) months following the closing of the Offering, in each case for a payment to the Company of $0.125 per amended warrant, for aggregate gross consideration of $60,606.25, prior to deducting placement agent fees (the “Warrant Amendment”). The Offering closed on April 10, 2024 and the gross proceeds from the Offering were $5.25 million, and net proceeds of $4.7 million after placement agent fees but before other offering expenses payable by the Company. The Warrant Amendment was effective upon the closing of the Offering.

Current wording

In connection with the Offering, the Company also entered into an agreement (the “Warrant Amendment Agreement”) with a holder (the “Holder”) of existing warrants to purchase shares of the Company’s Class A common stock, in consideration for the Holder’s participation in the Offering and purchase of securities in the Offering, and contingent upon the closing of the Offering and the Holder’s participation in the Offering, to amend the Holder’s existing warrants to purchase up to (a) 242,425 shares of Class A common stock at an exercise price of $16.50 per share, issued on October 13, 2023 and expiring on April 13, 2029 (the “Series A Warrants”) and (b) 242,425 shares of Class A common stock at an exercise price of $16.50 per share, issued on October 13, 2023 and expiring on April 14, 2025 (the “Series B Warrants” and together with the Series A Warrants, the “Existing Warrants”) to (i) reduce the exercise price of the Existing Warrants to $2.35 per share and (ii) amend the expiration date of the Series A Warrants to five and one-half (5.5) years following the closing of the Offering and the Series B Warrants to eighteen (18) months following the closing of the Offering, in each case for a payment to the Company of $0.125 per amended warrant, for aggregate gross consideration of $60,606.25, prior to deducting placement agent fees (the “Warrant Amendment”). The Offering closed on April 10, 2024 and the gross proceeds from the Offering were $5.25 million, and net proceeds of $4.7 million after placement agent fees but before other offering expenses payable by the Company. The Warrant Amendment was effective upon the closing of the Offering.

Previous wording

Pursuant to the Inducement Letter Agreement, the Holders agreed to exercise for cash the Warrants at an exercise price of $2.35 per share in consideration for payment of $0.125 per new warrant and our issuance of new unregistered Common Stock Warrants (the “New Warrants”) to purchase up to 4,799,488 shares of common stock (the “New Warrant Shares”), at an exercise price of $2.35 per share (the “Inducement Transaction”), and which were immediately exercisable. The new Series C warrants to purchase 2,399,744 shares of Class A common stock have a term of five years from the issuance date, and the new Series D warrants to purchase 2,399,744 shares of Class A common stock have a term of twenty-four months from the issuance date.

Current wording

On April 16, 2024, we entered into an inducement letter agreement with certain holders of our existing Series A Warrants and Series B Warrants (collectively, the “October Warrants”), and certain Common Warrants pursuant to which the holders agreed to exercise for cash the October Warrants and such Common Warrants at an exercise price of $2.35 per share in consideration for payment of $0.125 per new warrant and our issuance of new Series C warrants to purchase 2,399,744 shares of Class A common stock, with a term of five years from the issuance date, and new Series D warrants to purchase 2,399,744 shares of Class A common stock, with a term of twenty-four months from the issuance date. Additionally, the Company agreed to issue to the placement agent or its designees as compensation, warrants to purchase up to 167,982 shares of Class A common stock, equal to 7.0% of the aggregate number of shares of Class A common stock issued upon exercise of the October Warrants and Common Warrants pursuant to the inducement transaction, which had the same terms as the Series C Warrants, except that the placement agent warrants have an exercise price of $3.25 per share.

Previous wording

The Inducement Transaction closed on April 18, 2024, and the gross proceeds to the Company from the exercise of the Warrants, inclusive of the payment consideration for the New Warrants, were approximately $6.2 million, and net proceeds of $5.6 million after deducting placement agent fees but before other offering expenses payable by the Company.

Current wording

The inducement transaction closed on April 18, 2024, and the gross proceeds to the Company, inclusive of the payment consideration for the New Warrants, were approximately $6.2 million, and net proceeds of $5.6 million after deducting placement agent fees but before other offering expenses payable by the Company.

Previous wording

We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2024. 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

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.

Previous wording

As of March 31, 2024, we have $1.9 million in operating lease obligations and $1.4 million in contract research organization obligations. 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 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.