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Clene(CLNN) - 2025 Q1 - Quarterly Report
CleneClene(US:CLNN)2025-05-07 12:03

PART I—FINANCIAL INFORMATION Financial Statements (Unaudited) The unaudited condensed consolidated financial statements for Q1 2025, including balance sheets, operations, and cash flows, highlight a "Going Concern" issue due to significant losses and financing needs Condensed Consolidated Financial Statements For Q1 2025, the company reported a net loss of $0.75 million, a significant improvement from the prior year, despite decreased cash and total assets, with $5.0 million cash used in operations Condensed Consolidated Balance Sheet Data (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $9,832 | $12,155 | | Total current assets | $14,671 | $16,157 | | Total Assets | $25,314 | $27,337 | | Total current liabilities | $10,764 | $10,291 | | Total Liabilities | $30,287 | $36,194 | | Total Stockholders' Deficit | ($4,973) | ($8,857) | Condensed Consolidated Statements of Operations (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenue | $81 | $73 | | Research and development | $1,481 | $5,869 | | General and administrative | $2,656 | $3,420 | | Loss from operations | ($4,076) | ($9,232) | | Net loss | ($751) | ($11,080) | | Net loss per share | ($0.09) | ($1.73) | Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($5,011) | ($7,082) | | Net cash provided by investing activities | $0 | $71 | | Net cash provided by (used in) financing activities | $2,673 | ($19) | | Net decrease in cash | ($2,323) | ($7,089) | Notes to Condensed Consolidated Financial Statements Key notes reveal a "Going Concern" issue due to insufficient cash, detail significant debt obligations and outstanding warrants, and confirm nearly all revenue originates from a related party - The company is a clinical-stage pharmaceutical firm focused on nanotechnology therapeutics for central nervous system disorders like ALS, MS, and PD15 - Going Concern: Management has substantial doubt about the company's ability to continue as a going concern17 - As of March 31, 2025, cash was $9.8 million, while net cash used in operations for the quarter was $5.0 million1718 - The company does not expect to have sufficient cash to sustain operations for the next twelve months without additional financing18 - To mitigate funding needs, the company is raising capital, including generating $2.7 million from its at-the-market facility in Q1 202519 - These plans do not alleviate the substantial doubt about its ability to continue as a going concern19 - The company has $10.0 million in Senior Secured Convertible Promissory Notes (2024 SSCP Notes) with a 12% interest rate, maturing in June 202677 - These notes require maintaining a minimum of $2.0 million in unrestricted cash78 - As of March 31, 2025, the company had 7.24 million shares issuable upon the exercise of various outstanding warrants, with a mix of equity and liability classifications107 - Nearly all revenue ($80k in Q1 2025) is generated from supply and license agreements with 4Life Research LLC, a stockholder and related party124129 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, emphasizing the "going concern" issue, reduced Q1 2025 net loss due to lower R&D and non-cash gains, and positive clinical program developments for CNM-Au8 Recent Developments of Our Clinical Programs The company received FDA guidance for accelerated approval of CNM-Au8® in ALS, planning a Q4 2025 NDA submission and H2 2025 Phase 3 trial, while VISIONARY-MS data showed remyelination and clinical improvements - The FDA provided guidance on a potential path for accelerated approval for CNM-Au8® in ALS, recommending the company leverage additional data from its Expanded Access Programs (EAPs) to substantiate the drug's effect on neurofilament light (NfL) decline141 - The company plans to meet with the FDA in Q2 2025, provide additional data in Q3 2025, and potentially submit an NDA in Q4 2025141 - A confirmatory Phase 3 trial, RESTORE-ALS, is planned to start in the second half of 2025141 - In April 2025, the company announced new evidence of remyelination and neuronal repair from its VISIONARY-MS trial, with participants showing significant improvements in cognition and vision, supported by objective MRI and mf-VEP biomarkers144 Results of Operations Q1 2025 saw minimal revenue, a 56% decrease in operating loss, and a 93% reduction in net loss to $0.75 million, driven by lower R&D expenses and non-cash gains on liabilities Comparison of Operations (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total revenue | $81 | $73 | 11% | | Research and development | $1,481 | $5,869 | (75)% | | General and administrative | $2,656 | $3,420 | (22)% | | Loss from operations | ($4,076) | ($9,232) | (56)% | | Total other income (expense), net | $3,325 | ($1,848) | * | | Net loss | ($751) | ($11,080) | (93)% | - Research and development expenses decreased by 75% primarily due to a $4.2 million increase in grant revenue recognized as a reduction of R&D expense, related to the NIH-funded ACT-EAP for ALS160161 - General and administrative expenses decreased by 22%, mainly due to lower personnel costs, stock-based compensation, and public relations fees162 - Total other income (expense), net, shifted to a $3.3 million income from a $1.8 million expense in the prior year, primarily due to a $2.5 million gain on the change in fair value of common stock warrant liabilities and a $1.1 million gain on derivative liabilities164165 Liquidity and Capital Resources Substantial doubt exists regarding the company's "going concern" status due to significant losses and negative cash flows, with $9.8 million cash at quarter-end and ongoing capital raising efforts insufficient for the next year - Going Concern: The company has incurred significant losses and negative cash flows since inception and expects this to continue173174 - Management has concluded there is substantial doubt about the company's ability to continue as a going concern beyond one year175 - Net cash used in operating activities was $5.0 million in Q1 2025, compared to $7.1 million in Q1 2024180181 - Net cash provided by financing activities was $2.7 million in Q1 2025, entirely from the issuance of common stock under its ATM agreement180185 - Short-term material cash requirements for the next 12 months include $4.9 million for principal and interest on debt, $1.4 million for operating leases, and $0.2 million for capital expenditures177 Quantitative and Qualitative Disclosures About Market Risk The company is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a smaller reporting company - The company is exempt from this disclosure requirement due to its status as a smaller reporting company198 Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025, due to material weaknesses in the control environment, financial reconciliations, and IT general controls, with remediation efforts underway - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were not effective199 - Material weaknesses were identified in the control environment, controls over reconciliations and manual journal entries, and IT general controls (including user access and change management)201202 - Remediation efforts are underway, including strengthening the internal accounting team and engaging external consultants to assist with complex accounting applications203205 PART II—OTHER INFORMATION Legal Proceedings The company is not currently involved in any material pending legal proceedings - As of the filing date, Clene Inc. is not involved in any material legal proceedings207 Risk Factors A new material risk factor highlights the company's failure to meet Nasdaq's $35 million MVLS requirement, with a November 3, 2025 deadline to regain compliance or face potential delisting - On May 6, 2025, the company received a notice from Nasdaq for failing to meet the minimum $35.0 million Market Value of Listed Securities (MVLS) requirement209 - The company has a 180-day period, until November 3, 2025, to regain compliance with the Minimum MVLS Requirement209 - If compliance is not regained, the company's stock is subject to delisting, which could lead to reduced liquidity, a 'penny stock' designation, and a decreased ability to obtain future financing209 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity securities were sold during the reported period - There were no sales of unregistered securities in the reported period210 Defaults Upon Senior Securities The company reported no defaults on its senior securities - There were no defaults upon senior securities211 Mine Safety Disclosures This disclosure item is not applicable to the company's operations - Not Applicable212 Other Information No officers or directors adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No officers or directors adopted or terminated a Rule 10b5-1 trading plan during the three months ended March 31, 2025213 Exhibits This section lists all exhibits filed with the quarterly report, including corporate governance documents, material contracts, and required CEO and CFO certifications - The exhibits filed with the report include required certifications by the CEO and CFO under Sarbanes-Oxley Sections 302 and 906214