Clene Inc.

Previous wording

Our patent-protected, proprietary position affords us the potential to develop a broad and deep pipeline of novel CSN therapeutics to address a range of diseases with high impact on human health. We innovated an electro-crystal-chemistry drug development platform that draws from advances in nanotechnology, plasma and quantum physics, material science, and biochemistry. Our platform process results in nanocrystals with faceted structures and surfaces that are free of the chemical surface modifications that accompany other production methods. Many traditional methods of nanoparticle synthesis involve the unavoidable deposition of potentially toxic organic residues and stabilizing surfactants on the particle surfaces. Synthesizing stable nanocrystals that are both nontoxic and highly catalytic has overcome this significant hurdle in harnessing transition metal catalytic activity for therapeutic use. Our clean-surfaced nanocrystals exhibit catalytic activities many-fold higher than multiple other commercially available nanoparticles, produced using various techniques, that we have comparatively evaluated.

Current wording

Our patent-protected, proprietary position affords us the potential to develop a broad and deep pipeline of novel CSN therapeutics to address a range of diseases with high impact on human health. We innovated an electro-crystal-chemistry drug development platform that draws from advances in nanotechnology, plasma and quantum physics, material science, and biochemistry. Our platform process results in nanocrystals with faceted structures and surfaces that are free of the chemical surface modifications that accompany other production methods. Many traditional methods of nanoparticle synthesis involve the unavoidable deposition of potentially toxic organic residues and stabilizing surfactants on the particle surfaces. Synthesizing stable nanocrystals that are both nontoxic and highly catalytic has overcome this significant hurdle in harnessing transition metal catalytic activity for therapeutic use. Our clean-surfaced nanocrystals exhibit catalytic activities many-fold higher than other commercially available nanoparticles, produced using various techniques, that we have comparatively evaluated.

Previous wording

We have multiple drug assets currently in development and/or clinical trials for applications primarily in neurology. Our development and clinical efforts are currently focused on addressing the high unmet medical needs in central nervous system disorders including amyotrophic lateral sclerosis (“ALS”), multiple sclerosis (“MS”), and Parkinson’s disease (“PD”). We currently have no drugs approved for commercial sale and have not generated any revenue from drug sales. We have never been profitable and have incurred operating losses in each year since inception. We generate revenue from sales of dietary supplements through our wholly owned subsidiary, dOrbital, Inc., or through an exclusive license with 4Life Research LLC (“4Life”), an international supplier of health supplements, stockholder, and related party. We anticipate these revenues to be small compared to our operating expenses and to the revenue we expect to generate from potential future sales of our drug candidates, for which we are currently conducting clinical trials.

Current wording

Our development and clinical efforts are dedicated to revolutionizing the treatment of neurodegenerative diseases to restore and protect neuronal health and function. Our nanotherapeutics target cellular energy impairments that are common to many diseases and we are currently focused on addressing the high unmet medical needs in central nervous system disorders including amyotrophic lateral sclerosis (“ALS”), multiple sclerosis (“MS”), and Parkinson’s disease (“PD”). We currently have no drugs approved for commercial sale and have not generated any revenue from drug sales. We have never been profitable and have incurred operating losses in each year since inception. We generate revenue from sales of dietary supplements through our wholly owned subsidiary, dOrbital, Inc., or through an exclusive license with 4Life Research LLC (“4Life”), an international supplier of health supplements, stockholder, and related party. We anticipate these revenues to be small compared to our operating expenses and to the revenue we expect to generate from potential future sales of our drug candidates, for which we are currently conducting clinical trials.

Previous wording

We have initiated a second dosing cohort of REPAIR-MS, an open-label, investigator blinded Phase 2 clinical trial in non-active progressive MS patients. We anticipate enrollment concluding in the first half of 2024 with topline results available by the end of 2024. We plan to work closely with regulatory health authorities from the FDA and EMA, MS experts, and patient representatives to determine the proper path to advance CNM-Au8 into Phase 3 and potential future approval. We expect to meet with the FDA in an end of Phase 2 meeting in the second half of 2024.

Current wording

We have initiated a second dosing cohort of REPAIR-MS, an open-label, investigator blinded Phase 2 clinical trial in non-active progressive MS patients. Enrollment concluded in January 2025 with topline results expected during the second half of 2025. We plan to work closely with regulatory health authorities from the FDA, European Medicines Agency and other international regulatory bodies, MS experts, and patient representatives to determine the proper path to advance CNM-Au8 into Phase 3 and potential future approval. We expect to meet with the FDA in an end of Phase 2 meeting in the second half of 2025.

Previous wording

Despite the great need for an effective disease-modifying treatment for ALS and significant research efforts by the pharmaceutical industry to meet this need, there have been limited clinical successes and no curative therapies approved to date. Recently, in April 2023, the FDA granted accelerated approval to tofersen, branded as Qalsody, a drug from Biogen Inc. for the treatment of SOD1-ALS. A marketing authorization application for tofersen is currently under review by the EMA. Additionally, sodium phenylbutyrate and taurursodiol, a drug from Amylyx Pharmaceuticals, Inc. (“Amylyx”) for the treatment of ALS, previously received approval from the FDA and conditional approval from Health Canada based on the results of a Phase 2 trial. In January 2024, the European Commission refused the marketing authorization for sodium phenylbutyrate and taurursodiol, and in March 2024 Amylyx announced the results of a Phase 3 trial which did not demonstrate a statistically significant treatment benefit as measured by the ALSFRS-R score and quality of life patient-reported outcome assessments, including overall survival and respiratory function. Amylyx has voluntarily paused promotion of sodium phenylbutyrate and taurursodiol, with anticipated future engagement with regulatory authorities and the potential voluntarily withdrawal of the drug from the market.

Current wording

Despite the great need for an effective disease-modifying treatment for ALS and significant research efforts by the pharmaceutical industry to meet this need, there have been limited clinical successes and no curative therapies approved to date. In April 2023, the FDA granted accelerated approval to tofersen, branded as Qalsody, a drug from Biogen Inc. for the treatment of SOD1-ALS, a rare genetic form of ALS. In May 2024, the European Commission granted marketing authorization under exceptional circumstances for Qalsody in the European Union. Additionally, sodium phenylbutyrate and taurursodiol, a drug from Amylyx Pharmaceuticals, Inc. that previously received approval from the FDA and conditional approval from Health Canada based on the results of a Phase 2 trial, was voluntarily withdrawn from the market in the U.S. and Canada following the negative outcome of a Phase 3 clinical trial.

Previous wording

The discovery and development of novel drug candidates require a significant investment of resources over a prolonged period of time, and a core part of our strategy is to continue making sustained investments in this area. As a result of this commitment, our pipeline of drug candidates has been advancing, with substantially all our research and development expenses relating to CNM-Au8, our lead asset, with the remainder spent on our CNM-ZnAg asset.

Current wording

The discovery and development of novel drug candidates requires a significant investment of resources over a prolonged period of time, and a core part of our strategy is to continue making sustained investments in this area. As a result of this commitment, our pipeline of drug candidates has been advancing, with substantially all our research and development expenses relating to CNM-Au8, our lead asset, with the remainder spent on our CNM-ZnAg asset.

Previous wording

Our research and development expenses are affected by the scope and advancement of our existing product pipeline and the commencement of new drug programs. Drug candidates in later stages of clinical development generally have higher development costs than those in earlier stages, primarily due to costs and fees for per patient clinical trial sites for larger clinical trials, opening and monitoring clinical sites, contract research organization (“CRO”) activity, and manufacturing. We anticipate that our research and development expenses will decrease in early 2024 due to the completion of many of our ongoing clinical trials but will increase throughout 2024 and into future years as we advance our assets into Phase 3. Additionally, if we are able to file an NDA under an accelerated pathway with the FDA, contingent upon our discussions with the FDA regarding our accumulation of clinical evidence which is expected in the first half of 2024, we anticipate that our research and development expenses related to regulatory activities would increase in advance of receiving regulatory approval. If we are unable to file an NDA under an accelerated pathway, we would need to continue investing in clinical research activities and we anticipate that our research and development expenses would increase in future periods as we advance our assets in Phase 3.

Current wording

Our research and development expenses are affected by the scope and advancement of our existing product pipeline and the commencement of new drug programs. Drug candidates in later stages of clinical development generally have higher development costs than those in earlier stages, primarily due to costs and fees for per patient clinical trial sites for larger clinical trials, opening and monitoring clinical sites, contract research organization (“CRO”) activity, and manufacturing. We anticipate that our research and development expenses will increase in future years if and when we advance our assets into Phase 3. Additionally, if we are able to file an NDA with the FDA under an accelerated approval pathway or subsequent to future Phase 3 clinical development activities, if any, we anticipate that our research and development expenses related to regulatory activities would increase in advance of receiving regulatory approval.

Previous wording

Research and development costs consist primarily of payroll and personnel expenses for salaries, benefits, and stock-based compensation; supplies and materials expenses to support our clinical trials; payments to CROs, principal investigators, and clinical trial sites; costs of preclinical activities; consulting costs; and allocated overhead costs, including rent, equipment, utilities, depreciation, insurance, and facilities maintenance. Research and development costs are charged to operations as incurred, and nonrefundable advance payments related to future research and development activities are initially recorded as assets and are expensed when we receive the related goods or services.

Current wording

Research and development costs consist primarily of payroll and personnel expenses for salaries, benefits, and stock-based compensation; supplies, materials, and manufacturing expenses to support our clinical trials; payments to CROs, principal investigators, and clinical trial sites; costs of preclinical and nonclinical activities; consulting costs; and allocated overhead costs, including rent, equipment, utilities, depreciation, insurance, maintenance, and information technology. Research and development costs are charged to operations as incurred, and nonrefundable advance payments related to future research and development activities are initially recorded as assets and are expensed when we receive the related goods or services. Grant funding is recognized as a reduction in research and development costs.

Previous wording

General and administrative expenses consist primarily of payroll and personnel expenses for salaries, benefits, and stock-based compensation; fees for legal, accounting, tax, and information technology services; fees for directors’ and officers’ insurance; expenses for business development activities and investor and public relations; rent, utilities, and facility costs; travel costs; and consulting fees.

Current wording

General and administrative expenses consist primarily of payroll and personnel expenses for salaries, benefits, and stock-based compensation; fees for legal, finance, accounting, tax, and information technology services; insurance costs; expenses for public and investor relations; rent, utilities, depreciation, and facility costs.

Previous wording

We anticipate that our general and administrative expenses in future periods will be contingent upon our discussions with the FDA, expected in the first half of 2024. If we are able to file an NDA with the FDA based on our accumulation of clinical evidence, we anticipate our general and administrative expenses would increase in future periods to support increases in our drug development activities and as we build our commercial capabilities in advance of receiving regulatory approval. This potential increase will likely include increased headcount, increased stock compensation expenses, expanded infrastructure including certain sales and marketing activities performed ahead of regulatory approval, and increased insurance expenses. If we are unable to file an NDA based on our FDA interaction, we would need to continue investing in clinical research activities and we anticipate our general and administrative expenses would decrease in future periods as we decrease commercial expansion projects, including at our Elkton, Maryland facility, and as we implement cost-saving initiatives, such as a reduction in compensation, a hiring freeze, and elimination of certain staff positions.

Current wording

We anticipate that our general and administrative expenses in future periods will be contingent upon our discussions with the FDA. If we are able to file an NDA with the FDA under an accelerated pathway, we anticipate our general and administrative expenses would increase in future periods to support increases in our drug development activities and as we build our commercial capabilities in advance of receiving regulatory approval. This potential increase will likely include increased headcount, increased stock-based compensation expenses, expanded infrastructure including certain sales and marketing activities performed ahead of regulatory approval, and increased insurance expenses. If we are unable to file an NDA with the FDA under an accelerated pathway, we would need to continue investing in clinical research activities and we anticipate our general and administrative expenses would decrease in future periods as we decrease commercial expansion projects, including at our Elkton, Maryland facility, and as we implement cost-saving initiatives, such as a reduction in compensation, a hiring freeze, and elimination of certain staff positions.

Previous wording

Total other income (expense), net, consists primarily of (i) interest income and interest expense, (ii) gains and losses on termination of leases, (iii) commitment share expense from shares of Common Stock issued as a commitment fee, (iv) issuance costs allocated to liability-classified warrants, (v) a loss on initial issuance of equity from the fair value in excess of proceeds from a public equity offering, (vi) changes in the fair value of our (a) common stock warrant liabilities and (b) Contingent Earn-outs, (vii) research and development tax credits, unconditional grants, and conditional grants for which applicable conditions have been met, and (viii) realized gains and losses on foreign currency transactions and other miscellaneous income and expense items.

Current wording

Total other income (expense), net, consists primarily of (i) interest income and interest expense, (ii) commitment share expense from shares of Common Stock issued as a commitment fee, (iii) issuance costs for common stock warrant liabilities, (iv) a loss on initial issuance of equity from the fair value in excess of proceeds from public equity offerings, (v) changes in the fair value of our common stock warrant liabilities, derivative liabilities, and Contingent Earn-outs, (vi) research and development tax credits, unrestricted grants, and conditional grants for which applicable conditions have been met, and (vii) realized gains and losses on foreign currency transactions and other miscellaneous income and expense items.

Previous wording

We are incorporated in the state of Delaware and subject to statutory U.S. federal corporate income tax at a rate of 21.00% for the years ended December 31, 2023 and 2022. We are also subject to state income tax in Utah at a rate of 4.65% and 4.85% for the years ended December 31, 2023 and 2022, respectively; and in Maryland at a rate of 8.25% for the years ended December 31, 2023 and 2022. As of December 31, 2023 and 2022, we recorded a full valuation allowance against our net deferred tax assets due to the uncertainty as to whether such assets will be realized resulting from our three-year cumulative loss position and the uncertainty surrounding our ability to generate pre-tax income in the foreseeable future.

Current wording

We are incorporated in the state of Delaware and subject to statutory U.S. federal corporate income tax at a rate of 21.00%. We are also subject to state income tax in Maryland at a rate of 8.25%, and in Utah at a rate of 4.55% and 4.65% for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, we recorded a full valuation allowance against our net deferred tax assets due to the uncertainty as to whether such assets will be realized resulting from our three-year cumulative loss position and the uncertainty surrounding our ability to generate pre-tax income in the foreseeable future.

Previous wording

Our wholly-owned subsidiary, Clene Australia Pty Ltd (“Clene Australia”), was established in Australia in March 2018 and is subject to corporate income tax at a rate of 30.00% for the years ended December 31, 2023 and 2022. Clene Australia had no taxable income or provision for income taxes for the years ended December 31, 2023 and 2022. We recorded other income of $1.0 million and $3.1 million for the years ended December 31, 2023 and 2022, respectively, for research and development tax credits pertaining to Clene Australia for the 2023 and 2022 tax years, respectively.

Current wording

Our wholly-owned subsidiary, Clene Australia Pty Ltd (“Clene Australia”), was established in Australia in March 2018 and is subject to corporate income tax at a rate of 30.00%. Clene Australia had no taxable income or provision for income taxes for the years ended December 31, 2024 and 2023. We recorded other income of $0.1 million and $1.0 million for the years ended December 31, 2024 and 2023, respectively, for research and development tax credits pertaining to Clene Australia for the 2024 and 2023 tax years, respectively.

Previous wording

Our wholly-owned subsidiary, Clene Netherlands B.V. (“Clene Netherlands”), was established in the Netherlands in April 2021 and is subject to corporate income tax at a rate of 19.00% up to €200,000 of taxable income and 25.80% for taxable income in excess of €200,000 for the year ended December 31, 2023; and 15.00% up to €395,000 of taxable income and 25.80% for taxable income in excess of €395,000 for the year ended December 31, 2022. Clene Netherlands had no taxable income or provision for income taxes for the years ended December 31, 2023 and 2022.

Current wording

Our wholly-owned subsidiary, Clene Netherlands B.V. (“Clene Netherlands”), was established in the Netherlands in April 2021 and is subject to corporate income tax at a rate of 19.00% up to €200,000 of taxable income and 25.80% for taxable income in excess of €200,000 for the years ended December 31, 2024 and 2023. Clene Netherlands had no taxable income or provision for income taxes for the years ended December 31, 2024 and 2023.

Previous wording

We also received indirect financial support for the HEALEY ALS Platform Trial, administered by Massachusetts General Hospital, which conducted a platform trial for the treatment of ALS with certain drug candidates, including CNM-Au8, at significantly lower costs than we would have otherwise incurred if we had conducted a comparably designed clinical trial at reasonable market rates.

Current wording

We also received indirect financial support for the HEALEY ALS Platform Trial, administered by Massachusetts General Hospital, which conducted an ALS platform trial of CNM-Au8 alongside multiple other drug candidates, at significantly lower costs than we would have otherwise incurred if we had conducted a comparably designed clinical trial at reasonable market rates.

Previous wording

We incurred a loss from operations of $40.5 million and $48.4 million for the years ended December 31, 2023 and 2022, respectively. Our accumulated deficit was $242.7 million and $193.2 million as of December 31, 2023 and 2022. Our cash, cash equivalents, and marketable securities totaled $35.0 million and $23.3 million as of December 31, 2023 and 2022, respectively, and net cash used in operating activities was $30.2 million and $39.0 million for the years ended December 31, 2023 and 2022, respectively.

Current wording

We incurred a loss from operations of $33.1 million and $40.5 million for the years ended December 31, 2024 and 2023, respectively. Our accumulated deficit was $282.1 million and $242.7 million as of December 31, 2024 and 2023. Our cash, cash equivalents, and marketable securities totaled $12.2 million and $35.0 million as of December 31, 2024 and 2023, respectively, and net cash used in operating activities was $21.3 million and $30.2 million for the years ended December 31, 2024 and 2023, respectively.

Previous wording

We have incurred significant losses and negative cash flows from operations since our inception. We have not generated significant revenues since our inception, and we do not anticipate generating significant revenues unless we successfully complete development and obtain regulatory approval for commercialization of a drug candidate. We expect to incur additional losses in the future, particularly as we advance the development of our clinical-stage drug candidates, continue research and development of our preclinical drug candidates, and initiate additional clinical trials of, and seek regulatory approval for, these and other future drug candidates. We expect that within the next twelve months, we will not have sufficient cash and other resources on hand to sustain our current operations or meet our obligations as they become due unless we obtain additional financing. Additionally, pursuant to our term loan with Avenue Venture Opportunities Fund, L.P. (“Avenue”), we are required to maintain unrestricted cash and cash equivalents of at least $5.0 million to avoid acceleration of the full balance of the loan (see Note 8 to the consolidated financial statements). These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Current wording

We have incurred significant losses and negative cash flows from operations since our inception. We have not generated significant revenues since our inception, and we do not anticipate generating significant revenues unless we successfully complete development and obtain regulatory approval for commercialization of a drug candidate. We expect to incur additional losses in the future, particularly as we advance the development of our clinical-stage drug candidates, continue research and development of our preclinical drug candidates, and initiate additional clinical trials of, and seek regulatory approval for, these and other future drug candidates. We expect that within the next twelve months, we will not have sufficient cash and other resources on hand to sustain our current operations or meet our obligations as they become due unless we obtain additional financing. Additionally, pursuant to our 2024 SSCP Notes, we are required to maintain unrestricted cash and cash equivalents of at least $2.0 million to avoid acceleration of the full balance of the 2024 SSCP Notes (see Note 8 to the consolidated financial statements). These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Previous wording

To mitigate our funding needs, we plan to raise additional funding, including exploring equity financing and offerings, debt financing, licensing or collaboration arrangements with third parties, as well as utilizing our existing at-the-market facility and equity purchase agreement and potential proceeds from the exercise of outstanding warrants and stock options. These plans are subject to market conditions and reliance on third parties, and there is no assurance that effective implementation of our plans will result in the necessary funding to continue current operations. We have implemented cost-saving initiatives, including delaying and reducing certain research and development programs and commercialization efforts and elimination of certain staff positions. We have concluded that our plans do not alleviate the substantial doubt about our ability to continue as a going concern beyond one year from the date the consolidated financial statements are issued.

Current wording

To mitigate our funding needs, we plan to raise additional funding, including exploring equity financing and offerings, debt financing, licensing or collaboration arrangements with third parties, as well as utilizing our existing at-the-market facility and equity purchase agreement and potential proceeds from the exercise of outstanding warrants and stock options. These plans are subject to market conditions and reliance on third parties, and there is no assurance that effective implementation of our plans will result in the necessary funding to continue current operations. During the year ended December 31, 2024, we generated $2.7 million of gross proceeds from our equity distribution agreement (the “ATM Agreement”), raised $3.5 million from a registered direct offering of equity securities and an additional $3.8 million from separate, concurrent private placements of equity securities, and raised $10.0 million from the issuance of the 2024 SSCP Notes of which $7.9 million was used to repay the remaining balance of our obligations under a term loan with Avenue. Additionally, subsequent to December 31, 2024, we generated $2.5 million of gross proceeds from our ATM Agreement. We have implemented cost-saving initiatives, including delaying and reducing certain research and development programs and commercialization efforts and elimination of certain staff positions. We have concluded that our plans do not alleviate the substantial doubt about our ability to continue as a going concern beyond one year from the date the consolidated financial statements are issued.

Previous wording

For at least the next twelve months, our primary capital requirements are to fund our operations, including research and development, personnel, regulatory, and other clinical trial costs related to development of our lead drug candidate, CNM-Au8; and general and administrative costs to support our drug development and pre-commercial activities in advance of receiving regulatory approval for our drug candidates. Firm commitments for funds include approximately $27,000 and $1.1 million of payments under finance and operating lease obligations, respectively; payment of principal and interest on notes payable totaling $22.5 million; and commitments under various agreements for capital expenditures totaling $0.4 million related to the construction of our manufacturing facilities. We expect to meet our short-term liquidity requirements primarily through cash on hand. Additional sources of funds include equity financing, debt financing, or other capital sources.

Current wording

For at least the next twelve months, our primary capital requirements are to fund our operations, including research and development, personnel, regulatory, and other clinical trial costs related to development of our lead drug candidate, CNM-Au8; and general and administrative costs to support our drug development and pre-commercial activities in advance of receiving regulatory approval for our drug candidates. Firm commitments for funds include approximately $1.4 million of payments under operating lease obligations, payment of principal and interest on notes payable totaling $1.9 million, and a commitment for capital expenditures totaling $0.2 million related to the construction of our manufacturing facilities. We expect to meet our short-term liquidity requirements primarily through cash on hand. Additional sources of funds include equity financing, debt financing, or other capital sources.

Previous wording

Beyond the next twelve months, our primary capital requirements are to fund our operations, including research and development, personnel, regulatory, and other clinical trial costs related to development of our lead drug candidate, CNM-Au8; and general and administrative costs to support our drug development activities in advance of receiving regulatory approval for our drug candidates. Additional funds may be spent to initiate new clinical trials, at our discretion. Known obligations beyond the next twelve months include $6.4 million of payments under operating lease obligations, and interest and principal repayment of notes payable of $9.1 million. We expect to meet our long-term liquidity requirements primarily through equity financing, debt financing, or other capital sources.

Current wording

Beyond the next twelve months, our primary capital requirements are to fund our operations, including research and development, personnel, regulatory, and other clinical trial costs related to development of our lead drug candidate, CNM-Au8; and general and administrative costs to support our drug development activities in advance of receiving regulatory approval for our drug candidates. Additional funds may be spent to initiate new clinical trials, at our discretion. Known obligations beyond the next twelve months include $5.2 million of payments under operating lease obligations, and interest and principal repayment of notes payable of $18.0 million. We expect to meet our long-term liquidity requirements primarily through equity financing, debt financing, or other capital sources.

Previous wording

Net cash used in operating activities was $39.0 million for the year ended December 31, 2022, which resulted from a net loss of $29.9 million, adjusted for non-cash items totaling $7.6 million and a net change in operating assets and liabilities of $1.5 million. Significant non-cash items included (i) depreciation expense of $1.0 million relating to laboratory and office equipment and leasehold improvements; (ii) non-cash lease expense of $0.4 million; (iii) stock-based compensation expense of $8.5 million; (iv) gain on termination of lease of $0.4 million; (v) accretion of debt discount of $0.9 million; (vi) non-cash interest expense of $0.1 million; and (vii) the changes in fair value of the Clene Nanomedicine and Initial Stockholders Contingent Earn-outs of $15.8 million and $2.0 million, respectively, and the change in fair value of common stock warrant liability of $0.2 million. The changes in fair value of these instruments were primarily driven by the decrease of the closing price of our Common Stock on Nasdaq. The net change in operating assets and liabilities was primarily attributable to the following: (a) an increase in accounts receivable of $0.1 million and an increase in accounts payable of $0.3 million due to the timing of vendor invoicing and payments; (b) an increase in prepaid expenses and other current assets of $1.4 million due to the timing of vendor invoicing and payments, the timing of receipt of metals to be used in research and development, and an increase in research and development tax credits receivable; (c) an increase in accrued liabilities of $0.3 million primarily due to decreased accrued compensation and benefits; and (d) a decrease in operating lease obligations of $0.5 million.

Current wording

Net cash used in operating activities was $21.3 million for the year ended December 31, 2024, which resulted from a net loss of $39.4 million, adjusted for non-cash items totaling $14.9 million and a net change in operating assets and liabilities of $3.2 million. Significant non-cash items included: (i) depreciation expense of $1.7 million relating to laboratory and office equipment and leasehold improvements, (ii) non-cash lease expense of $0.5 million, (iii) issuance costs of $0.2 million from a public equity offering allocated to liability-classified warrants, (iv) a loss on initial issuance of equity of $2.1 million from the fair value in excess of proceeds from a public equity offering, (v) stock-based compensation expense of $8.0 million, (vi) a loss on extinguishment of notes payable of $0.2 million from the repayment in full of the 2021 Avenue Loan, (vii) a loss on disposal of property and equipment of $0.2 million, (viii) accretion of debt discount of $1.1 million, (ix) non-cash interest income on marketable securities of $0.2 million, (x) non-cash interest expense on notes payable of $0.1 million due to amortization of debt discounts on notes payable, (xi) a change in fair value of our common stock warrant liabilities of $0.7 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, (xii) a change in fair value of our derivative liabilities of $0.4 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, and (xiii) a change in fair value of the Clene Nanomedicine and Initial Stockholders Contingent Earn-outs of $0.1 million and $10,000, respectively, due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs. The net change in operating assets and liabilities was primarily attributable to: (A) a decrease in accounts receivable of $0.1 million and a decrease in accounts payable of $0.3 million due to the timing of vendor invoicing and payments, (B) an increase in prepaid expenses and other current assets of $0.2 million due to the timing of vendor invoicing and payments, the timing of receipt of metals to be used in research and development, and an increase in prepaid ACT-EAP expenses, partially offset by a decrease in research and development tax credits receivable, (C) an increase in accrued liabilities of $4.1 million primarily due to increased accrued compensation and benefits, increased deferred grants, and an increase in accrued CRO and clinical fees, partially offset by a decrease in other miscellaneous accrued liabilities, and (D) a decrease in operating lease obligations of $0.4 million.

Previous wording

Net cash used in operating activities was $30.2 million for the year ended December 31, 2023, which resulted from a net loss of $49.5 million, adjusted for non-cash items totaling $19.5 million and a net change in operating assets and liabilities of $0.2 million. Significant non-cash items included (i) depreciation expense of $1.7 million relating to laboratory and office equipment and leasehold improvements; (ii) non-cash lease expense of $0.4 million; (iii) commitment share expense of $0.4 million related to the shares of Common Stock issued to Lincoln Park as an initial fee for Lincoln Park’s commitment to purchase Common Stock under a purchase agreement with the Company; (iv) issuance costs of $0.3 million from a public equity offering allocated to liability-classified warrants; (v) a loss on initial issuance of equity of $14.8 million from the fair value in excess of proceeds from a public equity offering; (vi) stock-based compensation expense of $9.1 million; (vii) accretion of debt discount of $1.2 million; (viii) non-cash interest expense of $0.4 million; and (ix) changes in fair value of the Clene Nanomedicine and Initial Stockholders Contingent Earn-outs of $2.2 million and $0.3 million, respectively, primarily driven by the decrease in price of our Common Stock on Nasdaq; and (x) a change in fair value of our common stock warrant liabilities of $6.3 million, primarily driven by the decrease in price of our Common Stock on Nasdaq and changes in valuation model inputs. The net change in operating assets and liabilities was primarily attributable to the following: (a) a decrease in accounts receivable of $46,000 and a decrease in accounts payable of $1.5 million due to the timing of vendor invoicing and payments; (b) a decrease in prepaid expenses and other current assets of $2.0 million due to the timing of vendor invoicing and payments, the timing of receipt of metals to be used in research and development, and a decrease in research and development tax credits receivable; (c) a decrease in accrued liabilities of $0.1 million primarily due to a decrease in accrued CRO and clinical fees, partially offset by an increase in accrued compensation and benefits and other accrued liabilities; and (d) a decrease in operating lease obligations of $0.6 million.

Current wording

Net cash used in operating activities was $30.2 million for the year ended December 31, 2023, which resulted from a net loss of $49.5 million, adjusted for non-cash items totaling $19.5 million and a net change in operating assets and liabilities of $0.2 million. Significant non-cash items included: (i) depreciation expense of $1.7 million relating to laboratory and office equipment and leasehold improvements, (ii) non-cash lease expense of $0.4 million, (iii) commitment share expense of $0.4 million related to the shares of Common Stock issued to Lincoln Park as an initial fee for Lincoln Park’s commitment to purchase Common Stock under a purchase agreement with the Company, (iv) issuance costs of $0.3 million from a public equity offering allocated to liability-classified warrants, (v) a loss on initial issuance of equity of $14.8 million from the fair value in excess of proceeds from a public equity offering, (vi) stock-based compensation expense of $9.1 million, (vii) accretion of debt discount of $1.2 million, (viii) non-cash interest expense of $0.4 million, and (ix) a change in fair value of the Clene Nanomedicine and Initial Stockholders Contingent Earn-outs of $2.2 million and $0.3 million, respectively, due to the decrease in price of our Common Stock on Nasdaq, and (x) a change in fair value of our common stock warrant liabilities of $6.3 million due to the decrease in price of our Common Stock on Nasdaq and changes in valuation model inputs. The net change in operating assets and liabilities was primarily attributable to the following: (A) a decrease in accounts receivable of $46,000 and a decrease in accounts payable of $1.5 million due to the timing of vendor invoicing and payments, (B) a decrease in prepaid expenses and other current assets of $2.0 million due to the timing of vendor invoicing and payments, the timing of receipt of metals to be used in research and development, and a decrease in research and development tax credits receivable, (C) a decrease in accrued liabilities of $0.1 million primarily due to a decrease in accrued CRO and clinical fees, partially offset by an increase in accrued compensation and benefits and other miscellaneous accrued liabilities, and (D) a decrease in operating lease obligations of $0.6 million.

Previous wording

Net cash used in investing activities was $1.5 million for the year ended December 31, 2023, which consisted of (i) purchases of marketable securities of $6.2 million and (ii) purchases of property and equipment of $0.3 million, offset primarily by (iii) proceeds from maturities of marketable securities of $5.0 million. Net cash used in investing activities was $10.2 million for year ended December 31, 2022, which consisted of (i) purchases of marketable securities of $24.6 million and (ii) purchases of property and equipment of $5.2 million, partially offset by (iii) proceeds from maturities of marketable securities of $12.0 million and (iv) proceeds from sale of marketable securities of $7.6 million.

Current wording

Net cash provided by investing activities was $6.3 million for the year ended December 31, 2024, which consisted of proceeds from maturities of marketable securities of $12.5 million, partially offset by purchases of marketable securities of $6.2 million and purchases of property and equipment of $15,000. Net cash used in investing activities was $1.5 million for year ended December 31, 2023, which consisted of purchases of marketable securities of $6.2 million and purchases of property and equipment of $0.3 million, partially offset by proceeds from maturities of marketable securities of $5.0 million.

Previous wording

Net cash provided by financing activities was $42.2 million for the year ended December 31, 2023, which consisted of (i) proceeds from issuance of common stock and warrants, net of offering costs, of $42.1 million, and (ii) proceeds from the issuance of notes payable of $0.4 million; partially offset by (iii) payments of finance lease obligations of $0.1 million and (iv) payments of notes payable modification fees of $0.2 million. Net cash provided by financing activities was $17.3 million for the year ended December 31, 2022, which consisted of (i) proceeds from exercise of stock options of $0.3 million, (ii) proceeds from issuance of common stock, net of offering costs, of $11.5 million, and (iii) proceeds from the issuance of notes payable of $5.7 million; partially offset by (iv) payments of finance lease obligations of $0.1 million and (v) payments of notes payable issuance costs of $0.1 million.

Current wording

Net cash used in financing activities was $1.5 million for the year ended December 31, 2024, which consisted of payments of finance lease obligations of $27,000 and payments of notes payable principal of $20.8 million due to principal repayments and the ultimate payoff of the 2021 Avenue Loan, partially offset by proceeds from the exercise of stock options of $0.1 million, proceeds from the issuance of common stock, warrants, and pre-funded warrants, net of offering costs, of $9.2 million, and proceeds from the issuance of notes payable and convertible notes payable of $9.9 million. Net cash provided by financing activities was $42.2 million for the year ended December 31, 2023, which consisted of proceeds from the issuance of common stock and warrants, net of offering costs, of $42.1 million, and proceeds from the issuance of notes payable of $0.4 million, partially offset by payments of finance lease obligations of $0.1 million and payments of notes payable modification fees of $0.2 million.

Previous wording

In June 2023, we sold 50,000,000 units at a sale price of $0.80 per unit pursuant to an underwriting agreement with Canaccord Genuity LLC (“Canaccord”) as underwriter. Each unit consisted of (i) one share of Common Stock, (ii) one warrant to purchase one share of Common Stock at an exercise price of $1.10 per share (the “Tranche A Warrants”), and (iii) one warrant to purchase one share of Common Stock at an exercise price of $1.50 per share (the “Tranche B Warrants”). The aggregate gross proceeds were $40.0 million, excluding the proceeds, if any, from the exercise of the Tranche A Warrants and Tranche B Warrants. We cannot predict when or if the Tranche A Warrants or Tranche B Warrants will be exercised, and it is possible they may expire and/or never be exercised. We paid underwriting discounts and commissions of $2.4 million and offering expenses of $0.2 million. The offering was made pursuant to our registration statement on Form S-3 (file number 333-264299), which was declared effective by the SEC on April 26, 2022, a related registration statement pursuant to Rule 462(b) (file number 333-272692), filed with the SEC and effective on June 16, 2023, and our prospectus supplement relating to the offering.

Current wording

In June 2023, we sold 2,500,000 units at a sale price of $16.00 per unit pursuant to an underwriting agreement with Canaccord Genuity LLC (“Canaccord”). Each unit consisted of (i) one share of Common Stock, (ii) one warrant to purchase one share of Common Stock at an exercise price of $22.00 per share (the “Tranche A Warrants”), and (iii) one warrant to purchase one share of Common Stock at an exercise price of $30.00 per share (the “Tranche B Warrants”). The aggregate gross proceeds were $40.0 million, excluding the proceeds, if any, from the exercise of the Tranche A and Tranche B Warrants, and we paid underwriting discounts and commissions of $2.4 million and offering expenses of $0.2 million. The offering was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective by the Securities and Exchange Commission (“SEC”) on April 26, 2022, a related registration statement pursuant to Rule 462(b) (file number 333-272692), filed with the SEC and effective on June 16, 2023, and a related prospectus supplement.

Previous wording

During the year ended December 31, 2023, we sold 2,895,090 shares of Common Stock under our Equity Distribution Agreement (the “ATM Agreement”) with Canaccord, generated gross proceeds of $4.5 million, and paid commissions of $0.1 million. During the year ended December 31, 2022, we sold 358,769 shares of Common Stock and generated gross proceeds of $0.8 million, and commissions paid to Canaccord were insignificant. The issuance and sale of Common Stock by us under the ATM Agreement was made pursuant to our registration statement on Form S-3 (file number 333-264299), which was declared effective by the Securities and Exchange Commission on April 26, 2022, and our prospectus supplement relating to the offering. On June 16, 2023, we suspended and terminated the prospectus supplement related to the offering, and on November 7, 2023, we filed a prospectus supplement for future sales pursuant to the ATM Agreement having an aggregate offering price of up to $15.0 million.

Current wording

During the years ended December 31, 2024 and 2023, we sold 504,292 and 144,755 shares of Common Stock, respectively, under the ATM Agreement with Canaccord, generated gross proceeds of $2.7 million and $4.5 million, respectively, and paid commissions of $0.1 million and $0.1 million, respectively. The sale of Common Stock under the ATM Agreement was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective by the SEC on April 26, 2022, and a related prospectus supplement.

Previous wording

During the year ended December 31, 2023, we sold 400,000 shares of Common Stock under the purchase agreement (the “Purchase Agreement”) with Lincoln Park, issued 2,893 Additional Commitment Shares, and generated proceeds of $0.4 million. The issuance and sale of Common Stock under the Purchase Agreement is made pursuant to our registration statement on Form S-3 (file number 333-264299), which was declared effective by the SEC on April 26, 2022. On June 16, 2023, we suspended and terminated the prospectus supplement (the “Purchase Agreement Prospectus Supplement”) related to the offering with respect to the unsold shares of Common Stock issuable pursuant to the Purchase Agreement. We will not make any further sales of our securities pursuant to the Purchase Agreement, unless and until a new prospectus supplement is filed. Other than the termination of the Purchase Agreement Prospectus Supplement and offering with respect to future sales by us, the Purchase Agreement remains in full force and effect.

Current wording

During the year ended December 31, 2023, we sold 20,000 shares of Common Stock under our purchase agreement (the “Purchase Agreement”) with Lincoln Park, issued 145 Additional Commitment Shares, and generated proceeds of $0.4 million. We did not effect any sales during any of the other periods presented herein. The sale of Common Stock under the Purchase Agreement was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective by the SEC on April 26, 2022, and a related prospectus supplement. On June 16, 2023, we suspended and terminated the prospectus supplement related to the Purchase Agreement with respect to the unsold shares of Common Stock issuable pursuant to the Purchase Agreement. We will not make any further sales of our securities pursuant to the Purchase Agreement, unless and until a new prospectus supplement is filed. Other than the termination of the prospectus supplement related to the Purchase Agreement with respect to future sales by us, the Purchase Agreement remains in full force and effect.

Previous wording

Pursuant to the 2021 Avenue Loan, $5.0 million of the outstanding principal is subject to a conversion option. In accordance with ASU 2020-06,Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, we classified this portion as convertible notes payable in the consolidated balance sheets and did not separate the conversion option from the host contract as it did not meet the requirements for accounting as a derivative instrument. We account for the convertible note as a single liability measured at its amortized cost. As of December 31, 2023 and 2022, the convertible note was carried at $4.9 million and $4.8 million, respectively.

Current wording

In accordance with ASU 2020-06,Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, we classified a portion of the 2021 Avenue Loan as convertible notes payable in the consolidated balance sheets as of December 31, 2023 and did not separate the conversion option from the host contract as it did not meet the requirements for accounting as a derivative instrument. We accounted for the convertible note as a single liability measured at its amortized cost as of December 31, 2023, with a carrying value of $4.9 million. As of December 31, 2024, the 2021 Avenue Loan was repaid in full.

Previous wording

We classified the 2022 DHCD Loan as convertible notes payable in the consolidated balance sheets and did not separate the conversion option from the host contract as it did not meet the requirements for accounting as a derivative instrument. We account for the convertible note as a single liability measured at its amortized cost. As of December 31, 2023 and 2022, the convertible note was carried at $5.3 million and $5.0 million, respectively.

Current wording

We classified the 2022 DHCD Loan as convertible notes payable in the consolidated balance sheets and did not separate the conversion option from the host contract as it did not meet the requirements for accounting as a derivative instrument. We account for the convertible note as a single liability measured at its amortized cost as of December 31, 2024 and 2023, with a carrying value of $5.3 million and $5.3 million, respectively.

Previous wording

Pursuant to a June 2023 amendment to the 2021 Avenue Loan, we issued a warrant to purchase 3,000,000 shares of Common Stock at $0.80 per share (the “New Avenue Warrant”). In accordance with ASC 815, we recognized the New Avenue Warrant as a derivative liability measured at fair value and remeasure the New Avenue Warrant at each reporting date and record the change in fair value as a component of other income (expense), net, in the consolidated statements of operations and comprehensive loss. The change in fair value of the New Avenue Warrant resulted in a gain of $0.5 million for the year ended December 31, 2023. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) settlement of the instrument upon a change of control transaction, (ii) dissolution of the Company, or (iii) another outcome outside of (i)-(ii). These estimates require significant judgment. As of December 31, 2023, the unobservable inputs were as follows:

Current wording

Pursuant to amendments to the 2021 Avenue Loan in June 2023 and September 2024, we issued a warrant to purchase 150,000 shares of Common Stock at $4.6014 per share (the “2023 Avenue Warrant”). The change in fair value of the 2023 Avenue Warrant resulted in a loss of $49,000 and a gain of $0.5 million during the years ended December 31, 2024 and 2023, respectively. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) settlement of the instrument upon a change of control transaction, (ii) dissolution of the Company, or (iii) another outcome outside of (i)-(ii). These estimates require significant judgment. The unobservable valuation inputs were as follows:

Previous wording

Pursuant to an underwritten public offering in June 2023, we issued the Tranche A Warrants to purchase 50,000,000 shares of Common Stock at $1.10 per share and the Tranche B Warrants to purchase 50,000,000 shares of Common Stock at $1.50 per share. In accordance with ASC 815, we recognized the Tranche A Warrants as derivative liabilities measured at fair value and will remeasure the Tranche A Warrants at each reporting date and record the change in fair value as a component of other income (expense), net, in the consolidated statements of operations and comprehensive loss (the Tranche B Warrants qualified for equity classification at issuance). The change in fair value of the Tranche A Warrants out resulted in a gain of $5.8 million for the year ended December 31, 2023. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) FDA acceptance of an NDA for CNM-Au8, (ii) settlement upon a fundamental transaction, (iii) dissolution of the Company, and (iv) another outcome outside of (i)-(iii). These estimates require significant judgment. As of December 31, 2023, the unobservable inputs were as follows:

Current wording

Pursuant to an underwritten public offering in June 2023, we issued the Tranche A Warrants to purchase 2,500,000 shares of Common Stock at $22.00 per share. The change in fair value of the Tranche A Warrants resulted in a gain of $0.6 million and a gain of $5.8 million during the years ended December 31, 2024 and 2023, respectively. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) FDA acceptance of an NDA for CNM-Au8, (ii) settlement upon a fundamental transaction, (iii) dissolution of the Company, and (iv) another outcome outside of (i)-(iii). These estimates require significant judgment. The unobservable valuation inputs were as follows:

Previous wording

We estimate the fair value of stock options using a Black-Scholes option-pricing model, which requires significant judgment. The unobservable inputs include the expected price volatility, risk-free interest rate, expected dividend yield, and expected term. For the years ended December 31, 2023 and 2022, the unobservable inputs were as follows:

Current wording

We estimate the fair value of stock options using a Black-Scholes option-pricing model, which requires significant judgment. The unobservable inputs include the expected price volatility, risk-free interest rate, expected dividend yield, and expected term. The unobservable valuation inputs were as follows: