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What changed in Longeveron Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Longeveron Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+471 added−389 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-27)

Top changes in Longeveron Inc.'s 2024 10-K

471 paragraphs added · 389 removed · 308 edited across 8 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

238 edited+87 added−30 removed353 unchanged
Biggest changeSimilar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● the federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to CMS starting in 2022 information regarding payments and other transfers of value to physicians, certain other healthcare providers and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members.
Biggest changeThe federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to CMS starting in 2022 information regarding payments and other transfers of value to physicians, certain other healthcare providers and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members.
We may enter into arrangements with third-party collaborators to help us develop our product candidates and commercialize our products, and our ability to commercialize such products may be impaired or delayed if collaborations are unsuccessful. We are parties to various collaborations with third parties, and may enter into additional collaborations in the future.
We may enter into arrangements with third-party collaborators to help us develop our product candidates and commercialize our products, and our ability to commercialize such products may be impaired or delayed if collaborations are unsuccessful. We are parties to various collaborations with third parties, and we may enter into additional collaborations in the future.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.
If such an event were to occur and cause interruptions in our operations or result in the unauthorized acquisition of or access to personally identifiable information or individually identifiable health information (violating certain privacy laws such as HIPAA, Health Information Technology for Economic and Clinical Health Act and GDPR), it could result in a material disruption of our drug discovery and development programs and our business operations, whether due to a loss of our trade secrets or other similar disruptions.
If such an event were to occur and cause interruptions in our operations or result in the unauthorized acquisition of or access to personally identifiable information or individually identifiable health information (violating certain privacy laws such as HIPAA, the Health Information Technology for Economic and Clinical Health Act and GDPR), it could result in a material disruption of our drug discovery and development programs and our business operations, whether due to a loss of our trade secrets or other similar disruptions.
Reliance on these third-party manufacturers and their suppliers could subject us to a number of risks that could harm our business, including: ● interruption of supply resulting from modifications to or discontinuation of a supplier’s operations; ● failure of third-party manufacturers or suppliers to comply with their own legal and regulatory requirements; ● delays in product shipments resulting from uncorrected defects, reliability issues, or a supplier’s variation in a component; ● a lack of long-term supply arrangements for key components with our suppliers; ● inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms; ● difficulty and cost associated with locating and qualifying alternative suppliers for components in a timely manner; ● production delays related to the evaluation and testing of products from alternative suppliers, and corresponding regulatory qualifications; ● delay in delivery due to suppliers prioritizing other customer orders over ours or those of our third-party manufacturers; ● damage to our brand reputation caused by defective components produced by the suppliers; and ● fluctuation in delivery by the suppliers due to changes in demand from us, our third-party manufacturers or their other customers.
Reliance on these third-party manufacturers and their suppliers could subject us to a number of risks that could harm our business, including: • interruption of supply resulting from modifications to or discontinuation of a supplier’s operations; • failure of third-party manufacturers or suppliers to comply with their own legal and regulatory requirements; • delays in product shipments resulting from uncorrected defects, reliability issues, or a supplier’s variation in a component; • a lack of long-term supply arrangements for key components with our suppliers; • inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms; • difficulty and cost associated with locating and qualifying alternative suppliers for components in a timely manner; 46 • production delays related to the evaluation and testing of products from alternative suppliers, and corresponding regulatory qualifications; • delay in delivery due to suppliers prioritizing other customer orders over ours or those of our third-party manufacturers; • damage to our brand reputation caused by defective components produced by the suppliers; and • fluctuation in delivery by the suppliers due to changes in demand from us, our third-party manufacturers or their other customers.
For example: ● others may be able to develop products that are similar to our product candidates but that are not covered by the claims of the patents that we own or license; ● we or our licensors might not have been the first to make the inventions covered by the issued patents or patent application that we own or license; ● we or our licensors might not have been the first to file patent applications covering certain of our inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; ● some or all of our licensors’ pending patent applications may not lead to issued patents; ● issued patents that we own or license may be held invalid or unenforceable as a result of legal challenges by our competitors; ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets or in commercial markets where we do not have patent rights; 39 ● we may not develop additional proprietary technologies that are patentable; and ● the patents of others may have an adverse effect on our business.
For example: • others may be able to develop products that are similar to our product candidates but that are not covered by the claims of the patents that we own or license; • we or our licensors might not have been the first to make the inventions covered by the issued patents or patent application that we own or license; • we or our licensors might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • some or all of our licensors’ pending patent applications may not lead to issued patents; • issued patents that we own or license may be held invalid or unenforceable as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets or in commercial markets where we do not have patent rights; • we may not develop additional proprietary technologies that are patentable; and • the patents of others may have an adverse effect on our business.
On September 13, 2020, former President Trump signed an Executive Order directing HHS to implement a rulemaking plan to test a payment model, pursuant to which Medicare would pay, for certain high-cost prescription drugs and biological products covered by Medicare Part B, no more than the most-favored-nation price (i.e., the lowest price) after adjustments, for a pharmaceutical product that the drug manufacturer sells in a member country of the Organization for Economic Cooperation and Development that has a comparable per-capita gross domestic product.
On September 13, 2020, President Trump signed an Executive Order directing HHS to implement a rulemaking plan to test a payment model, pursuant to which Medicare would pay, for certain high-cost prescription drugs and biological products covered by Medicare Part B, no more than the most-favored-nation price (i.e., the lowest price) after adjustments, for a pharmaceutical product that the drug manufacturer sells in a member country of the Organization for Economic Cooperation and Development that has a comparable per-capita gross domestic product.
We plan to seek regulatory approval of our product candidates outside of the U.S., including specifically in Japan, and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including: ● differing regulatory requirements and reimbursement regimes in foreign countries; ● unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; ● economic weakness, including inflation, or political instability in particular foreign economies and markets; ● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; ● foreign taxes, including withholding of payroll taxes; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; ● difficulties staffing and managing foreign operations; ● workforce uncertainty in countries where labor unrest is more common than in the U.S.; ● potential liability under the FCPA or comparable foreign regulations; ● challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the U.S.; ● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and ● business interruptions resulting from geo-political actions, including war and terrorism.
We plan to seek regulatory approval of our product candidates outside of the U.S. and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including: • differing regulatory requirements and reimbursement regimes in foreign countries; • unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the U.S.; • potential liability under the FCPA or comparable foreign regulations; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the U.S.; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geo-political actions, including war and terrorism.
Whether or not we are ultimately successful in any product liability litigation, such litigation either before or after product approval and marketing could consume substantial amounts of our financial and managerial resources and could result in, among other things: ● significant awards against us; ● substantial litigation costs; 34 ● recall of products or termination of clinical trials; ● FDA withdrawal of marketing approval of products or suspension or revocation of an IND for a product candidate; ● injury to our reputation; ● withdrawal of clinical trial participants; ● withdrawal of clinical trial sites or investigators; or ● adverse regulatory action.
Whether or not we are ultimately successful in any product liability litigation, such litigation either before or after product approval and marketing could consume substantial amounts of our financial and managerial resources and could result in, among other things: • significant awards against us; • substantial litigation costs; • recall of products or termination of clinical trials; • FDA withdrawal of marketing approval of products or suspension or revocation of an IND for a product candidate; • injury to our reputation; • withdrawal of clinical trial participants; • withdrawal of clinical trial sites or investigators; or • adverse regulatory action.
The degree of market acceptance of any of our future developed and potential products will depend on a number of factors, including: ● the clinical safety and effectiveness of our products and their perceived advantage over alternative treatment methods; 29 ● our ability to demonstrate that our cell-based products can have a clinically significant effect, initially for Aging-related frailty, AD, HLHS, and other disease states for which we may seek marketing approval; ● ethical controversies that may arise regarding the use of stem cells or human tissue of any kind, including adult stem cells, adult bone marrow, and other adult tissues derived from donors; ● adverse events involving our product candidates or candidates of others that are cell based; ● our ability to supply a sufficient amount of our products to meet regular and repeated demand in order to develop a core group of medical professionals familiar with and committed to the use of our products; and ● the cost of our products and the reimbursement policies of government and third-party payors.
The degree of market acceptance of any of our future developed and potential products will depend on a number of factors, including: • the clinical safety and effectiveness of our products and their perceived advantage over alternative treatment methods; • our ability to demonstrate that our cell-based products have a clinically significant effect, initially for Aging-related Frailty, AD, HLHS, and other disease states for which we may seek marketing approval; • ethical controversies that may arise regarding the use of stem cells or human tissue of any kind, including adult stem cells, adult bone marrow, and other adult tissues derived from donors; • adverse events involving our product candidates or candidates of others that are cell based; • our ability to supply a sufficient amount of our products to meet regular and repeated demand in order to develop a core group of medical professionals familiar with and committed to the use of our products; and • the cost of our products and the reimbursement policies of government and third-party payors.
For example, CVS’s recently proposed “CostVantage” program is regularly referred to on social media and may have an impact on how pharmaceutical products are priced in the future. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions or incur other harm to our business. 73
For example, CVS’s recently proposed “CostVantage” program is regularly referred to on social media and may have an impact on how pharmaceutical products are priced in the future. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions or incur other harm to our business.
On August 6, 2020, former President Trump signed an additional Executive Order directing U.S. government agencies to encourage the domestic procurement of Essential Medicines, Medical Countermeasures, and Critical Inputs, which include among other things, active pharmaceutical ingredients and drugs intended for use in the diagnosis, cure, mitigation, treatment, or prevention of COVID-19.
On August 6, 2020, President Trump signed an additional Executive Order directing U.S. government agencies to encourage the domestic procurement of Essential Medicines, Medical Countermeasures, and Critical Inputs, which include among other things, active pharmaceutical ingredients and drugs intended for use in the diagnosis, cure, mitigation, treatment, or prevention of COVID-19.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data, or inappropriate disclosure of confidential or proprietary information, we could be exposed to litigation and governmental investigations, the further development and commercialization of our product candidates could be delayed, and we could be subject to significant fines or penalties for any noncompliance with certain state, federal and/or international privacy and security laws.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data, or inappropriate disclosure of confidential or proprietary information, we could be exposed to litigation and governmental investigations, the further development, approval, and commercialization of our product candidates could be delayed, and we could be subject to significant fines or penalties for any noncompliance with certain state, federal and/or international privacy and security laws.
These reductions went into effect on April 1, 2013, and subsequent legislative amendments to the statute, including the Bipartisan Budget Act of 2018, or BBA, will remain in effect through 2030, unless additional congressional action is taken. However, these Medicare sequester reductions were suspended from May 1, 2020, through December 31, 2020, due to the COVID-19 pandemic.
These reductions went into effect on April 1, 2013, and subsequent legislative amendments to the statute, including the Bipartisan Budget Act of 2018, or BBA, will remain in effect through 2030, unless additional congressional action is taken. However, these Medicare sequester reductions were suspended from May 1, 2020, through December 31, 2021, due to the COVID-19 pandemic.
The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.
The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements 49 relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.
While we are obligated to ensure compliance by third-parties with clinical trial protocols and other aspects of our clinical trials, and to have mechanisms in place to monitor our clinical trials, the sites at which they are conducted, and the investigators and other personnel involved in our clinical trials, we have limited control over these entities and individuals and limited visibility into their day-to-day activities, including with respect to their compliance with the approved clinical protocol.
While we are obligated to ensure compliance of third parties with our clinical trial protocols and other aspects of our clinical trials, and to have mechanisms in place to monitor our clinical trials, the sites at which they are conducted, and the investigators and other personnel involved in our clinical trials, we have limited control over these entities and individuals and limited visibility into their day-to-day activities, including with respect to their compliance with the approved clinical protocol.
These designations were granted following our Phase 1 safety-focused ELPIS trial, However, even though the FDA has granted Lomecel-B™ Rare Pediatric Disease designation for the treatment of HLHS, receipt of Rare Pediatric Disease designation does not provide any guarantee that we would or will receive a priority review voucher upon approval for this indication.
These designations were granted following our Phase 1 safety-focused ELPIS trial, However, even though the FDA has granted Lomecel-B™ Rare Pediatric Disease Designation for the treatment of HLHS, receipt of Rare Pediatric Disease Designation does not provide any guarantee that we would or will receive a priority review voucher (PRV) upon approval for this indication.
If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights. The U.S.
If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights. 50 The U.S.
If we receive marketing approval for a product candidate, physicians may nevertheless prescribe it to their patients in a manner that is inconsistent with the approved label, which is within their purview as part of their practice of medicine. If we are found to have promoted such off-label uses, however, we may become subject to significant liability.
If we receive marketing approval for a product candidate, physicians may nevertheless prescribe it to their patients in a manner that is inconsistent with the approved labeling, which is within their purview as part of their practice of medicine. If we are found to have promoted such off-label uses, however, we may become subject to significant liability.
The Inflation Reduction Act of 2022, signed into law by President Biden on August 16, 2022, contains several significant provisions regarding drug pricing, coverage, and reimbursement that could materially impact our business. Among the key provisions related to drug pricing, Title XI of the Social Security Act would be amended to direct the Secretary of the U.S.
The Inflation Reduction Act of 2022, signed into law by former President Biden on August 16, 2022, contains several significant provisions regarding drug pricing, coverage, and reimbursement that could materially impact our business. Among the key provisions related to drug pricing, Title XI of the Social Security Act would be amended to direct the Secretary of the U.S.
Our future financial performance and our ability to successfully develop and, if approved, commercialize, any current or future product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.
Our future financial performance and our ability to successfully develop and, if approved, commercialize, any current or future product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also 64 have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.
Furthermore, we cannot assure you that other stock indices will not take a similar approach to S&P, Dow Jones or FTSE Russell in the future. Exclusion from indices could make our Class A common stock less attractive to investors and, as a result, the market price of our Class A common stock could be adversely affected.
Furthermore, we 61 cannot assure you that other stock indices will not take a similar approach to S&P, Dow Jones or FTSE Russell in the future. Exclusion from indices could make our Class A common stock less attractive to investors and, as a result, the market price of our Class A common stock could be adversely affected.
Compliance with ongoing and changing requirements takes substantial resources and, should we be unable to remain in compliance, our business could be materially and adversely affected. 46 Manufacturers and their facilities are required to comply with extensive FDA and comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to cGMP regulations.
Compliance with ongoing and changing requirements takes substantial resources and, should we be unable to remain in compliance, our business could be materially and adversely affected. Manufacturers and their facilities are required to comply with extensive FDA and comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to cGMP regulations.
The policies of the FDA and of other regulatory authorities may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad.
However, the policies of the FDA and of other regulatory authorities may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad.
For example, in May 2019, Centers for Medicare and Medicaid Services (“CMS”) issued a final rule that would allow Medicare Advantage Plans the option of using step therapy, a type of prior authorization, for Part B drugs beginning January 1, 2020. This final rule codified CMS’s policy change that was effective January 1, 2019.
For example, in May 2019, 42 Centers for Medicare and Medicaid Services (“CMS”) issued a final rule that would allow Medicare Advantage Plans the option of using step therapy, a type of prior authorization, for Part B drugs beginning January 1, 2020. This final rule codified CMS’s policy change that was effective January 1, 2019.
For example, the ACA substantially changed the way healthcare is financed by both the government and private insurers, and significantly impacted the U.S. pharmaceutical industry. Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.
For example, the ACA substantially changed the way healthcare is financed by both the government and private insurers, and significantly impacted the U.S. pharmaceutical industry. Since its enactment, there have been judicial and Congressional 53 challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.
Some state laws require biotechnology companies to report information on the pricing of certain drug products. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Further state laws require biotechnology companies to report information on the pricing of certain drug products. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Accordingly, our or our licensors’ efforts to enforce or defend our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.
Accordingly, our or our licensors’ efforts to enforce or defend our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. 37 Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.
Our current and future arrangements with healthcare professionals, clinical investigators, CROs, payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval.
Our current and future arrangements with healthcare professionals, clinical investigators, CROs, payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that 54 may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval.
It is possible that a broader or more active public trading market for our common stock will not develop or be sustained, or that trading levels will not continue. These factors may materially adversely affect the market price of our Class A common stock, regardless of our performance. We will need to raise substantial additional funding.
It is possible that a broader or more active public 59 trading market for our common stock will not develop or be sustained, or that trading levels will not continue. These factors may materially adversely affect the market price of our Class A common stock, regardless of our performance. We will need to raise substantial additional funding.
During the course of any intellectual property litigation, there could be public announcements of the initiation of the litigation as well as results of hearings, rulings on motions, and other interim proceedings in the litigation. If securities analysts or investors regard these announcements as negative, the perceived value of our existing products, programs or intellectual property could be diminished.
During the course of any intellectual property litigation, there could be public announcements of the initiation of the litigation as well as results of hearings, rulings on motions, and other interim proceedings in the litigation. If securities analysts or investors 35 regard these announcements as negative, the perceived value of our existing products, programs or intellectual property could be diminished.
We have not yet completed all of the testing necessary to allow us to make a determination that serious unintended consequences will not occur. If the potential of our product candidates to treat disease is not realized, the value of our technology and our development programs could be significantly reduced.
We have not yet completed all of the testing necessary to allow us to make a determination that serious unintended consequences will not 25 occur. If the potential of our product candidates to treat disease is not realized, the value of our technology and our development programs could be significantly reduced.
Any of these actions could significantly and adversely affect supplies of our product candidates or other products and could have a material adverse effect on our business, financial condition, and results of operations. 51 We rely on third parties to conduct certain aspects of our preclinical studies and clinical trials.
Any of these actions could significantly and adversely affect supplies of our product candidates or other products and could have a material adverse effect on our business, financial condition, and results of operations. We rely on third parties to conduct certain aspects of our preclinical studies and clinical trials.
The stock market in general, and pharmaceutical and biotechnology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. 64 Broad market and industry factors may negatively affect the market price of our Class A common stock, regardless of our actual operating performance.
The stock market in general, and pharmaceutical and biotechnology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our Class A common stock, regardless of our actual operating performance.
Even if we receive regulatory approval of Lomecel-B™ or any of our other product candidates, we will be subject to ongoing regulatory requirements and continued regulatory review, which may result in significant additional expense. We may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our therapeutic candidates.
Even if we receive regulatory approval of Lomecel-B™ or any of our other product candidates, we will be subject to ongoing regulatory requirements and continued regulatory review, which may result in significant additional expense. We may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our product candidates.
The University of Miami may terminate the Exclusive License Agreement for material breach if the fees and royalties are not paid, or if the milestones are not met and an extension to achieve the milestones is not agreed upon. Some of our employees, including but not limited to Dr.
The University of Miami may terminate the Exclusive License Agreement and the additional Exclusive License Agreement for material breach if the fees and royalties are not paid, or if the milestones are not met and an extension to achieve the milestones is not agreed upon. Some of our employees, including but not limited to Dr.
Conducting one or more additional clinical trials would be expensive and could result in delays in commercialization of our product candidates. Managing and reducing health care costs has been of great concern in the U.S. and various foreign governments.
Conducting one or more additional clinical trials would be expensive and could result in delays in commercialization of our product candidates. 47 Managing and reducing health care costs has been of great concern in the U.S. and various foreign governments.
Later discovery of previously unknown problems with a product, manufacturer, or facility may result in restrictions on the product or manufacturer, including a withdrawal of the product from the market or a withdrawal of the approved application by the FDA. Furthermore, FDA may require post-approval studies or other post-approval commitments.
Later discovery of previously unknown problems with a product, manufacturer, or facility may result in restrictions on the product or manufacturer, including a withdrawal of the product from the market or a withdrawal of the approved application by the FDA. Furthermore, FDA may require post-approval studies or other post-approval requirements or commitments.
In addition, if we undertake acquisitions or pursue partnerships in the future, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense.
In addition, if we undertake acquisitions or pursue partnerships in the future, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization 48 expense.
To the extent the activities of these groups are successful, or if the laws and regulations regarding animal testing otherwise change, our research and development activities may be interrupted, delayed or become more expensive. 63 Our business activities may be subject to the U.S.
To the extent the activities of these groups are successful, or if the laws and regulations regarding animal testing otherwise change, our research and development activities may be interrupted, delayed or become more expensive. Our business activities may be subject to the U.S.
Similar rules may apply under state tax laws. We may have experienced such ownership changes in the past, and we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which are outside our control.
Similar rules may apply under state tax laws. We may have experienced such ownership changes in the past, and we may experience ownership changes in the future as a 65 result of subsequent shifts in our stock ownership, some of which are outside our control.
Future growth would impose significant added responsibilities on members of management, including: ● identifying, recruiting, integrating, maintaining and motivating additional employees; ● managing our internal development efforts effectively, including preclinical and clinical studies and investigations, as well as FDA, PMDA and other comparable foreign regulatory agencies’ review process for any current or future product candidates, while complying with any contractual obligations to contractors and other third parties we may have; and ● improving our operational, financial and management controls, reporting systems and procedures.
Future growth would impose significant added responsibilities on members of management, including: • identifying, recruiting, integrating, maintaining and motivating additional employees; • managing our internal development efforts effectively, including preclinical and clinical studies and investigations, as well as FDA, PMDA and other comparable foreign regulatory authorities review process for any current or future product candidates, while complying with any contractual obligations to contractors and other third parties we may have; and • improving our operational, financial and management controls, reporting systems and procedures.
The use of our product candidates or future products in individuals may expose us to product liability claims, and we may not be able to obtain adequate product liability insurance. Because of the nature of our products, we face an inherent risk of product liability claims.
The use of our product candidates or future products in individuals may expose us to product liability claims, and we may not be able to obtain adequate product liability insurance coverage. Because of the nature of our products, we face an inherent risk of product liability claims.
We have adopted a Code of Ethics applicable to all of our employees, but it is not always possible to identify and deter misconduct by employees and other third- parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
We have adopted a Code of Business Conduct and Ethics applicable to all of our employees, but it is not always possible to identify and deter misconduct by employees and other third- parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
If such disclosures occur, there is a risk that trial enrollment may be adversely impacted, that we may fail to monitor and comply with applicable adverse event reporting obligations or that we may not be able to defend our business or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our therapeutic candidates.
If such disclosures occur, there is a risk that trial enrollment may be adversely impacted, that we may fail to monitor and comply with applicable adverse event reporting obligations or that we may not be able to defend our business or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our product candidates.
The delays associated with the qualification of a new third party could negatively affect our ability to develop product candidates or receive approval for any product candidates in a timely manner. 50 We currently depend upon third parties for services and raw materials needed for the manufacture of our product candidates, and if these products are successfully commercialized, we may become dependent upon third parties for product distribution.
The delays associated with the qualification of a new third party could negatively affect our ability to develop product candidates or receive approval for any product candidates in a timely manner. 44 We currently depend upon third parties for services and raw materials needed for the manufacture of our product candidates, and if these products are successfully commercialized, we may become dependent upon third parties for product distribution.
We could also be required to seek funds through arrangements with collaborators or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or current or future therapeutic candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.
We could also be required to seek funds through arrangements with collaborators or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or current or future product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.
If we are unable to obtain funding on a timely basis, we may be required to significantly delay, scale back or discontinue one or more of our research or development programs or the commercialization of any therapeutic candidates or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.
If we are unable to obtain funding on a timely basis, we may be required to significantly delay, scale back or discontinue one or more of our research or development programs or the commercialization of any product candidates or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.
As a result, our financial results and the commercial prospects for our therapeutic candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed. Switching or adding additional CROs involves additional cost and requires management time and focus. In addition, there is a natural transition period when a new CRO begins work.
As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed. Switching or adding additional CROs involves additional cost and requires management time and focus. In addition, there is a natural transition period when a new CRO begins work.
Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our therapeutic candidates.
Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates.
Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our current or future therapeutic candidates. Disruptions in the financial markets in general have made equity and debt financing more difficult to obtain and may have a material adverse effect on our ability to meet our fundraising needs.
Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our current or future product candidates. Disruptions in the financial markets in general have made equity and debt financing more difficult to obtain and may have a material adverse effect on our ability to meet our fundraising needs.
Our recurring losses from operations and negative cash flow raise substantial doubt about our ability to continue as a going concern without sufficient capital resources and we have included an explanatory paragraph in the notes to our financial statements for the year ended December 31, 2023, with respect to this uncertainty.
Our recurring losses from operations and negative cash flow raise substantial doubt about our ability to continue as a going concern without sufficient capital resources and we have included an explanatory paragraph in the notes to our financial statements for the year ended December 31, 2024, with respect to this uncertainty.
We have systems in place to remind us to pay these fees, and we rely on third parties to pay these fees when due. Additionally, the USPTO and various foreign patent office’s require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and after a patent has been granted.
We have systems in place to remind us to pay these fees, and we rely on third parties to pay these fees when due. Additionally, the USPTO and various foreign patent offices require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and after a patent has been granted.
Additionally, we expect to experience pricing pressures in connection with the sale of any future approved therapeutic candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, cost containment initiatives and additional legislative changes. Healthcare reform in the U.S. and other countries may materially and adversely affect us.
Additionally, we expect to experience pricing pressures in connection with the sale of any future approved product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, cost containment initiatives and additional legislative changes. Healthcare reform in the U.S. and other countries may materially and adversely affect us.
As a result, fewer broker-dealers may be willing to make a market in our Class A common stock, reducing a stockholder’s ability to resell shares of our Class A common stock. 68 Provisions in our certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our Class A common stock.
As a result, fewer broker-dealers may be willing to make a market in our Class A common stock, reducing a stockholder’s ability to resell shares of our Class A common stock. 62 Provisions in our Certificate of Incorporation and Bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our Class A common stock.
See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below. For a summary of these risk factors, please see “Risk Factors Summary” beginning on page 29 of this 10-K.
See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below. For a summary of these risk factors, please see “Risk Factors Summary” beginning on page 23 of this 10-K.
If we or any of these third parties fail to comply with applicable GCP requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to suspend or terminate these trials or perform additional preclinical studies or clinical trials before approving our marketing applications.
If we or any of these third parties fail to comply with applicable cGCP requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to suspend or terminate these trials or perform additional preclinical studies or clinical trials before approving our marketing applications.
To date, we have devoted substantially all of our resources and efforts to organizing and staffing our company, business planning, building and equipping our research and development laboratories, building and equipping our manufacturing suites, raising capital, acquiring raw materials for manufacturing, product candidate development and manufacturing, securing related intellectual property rights and conducting clinical trials of Lomecel-B™.
To date, we have devoted substantially all of our resources and efforts to organizing and staffing our company, business planning, building and equipping our research and development laboratories, building and equipping our manufacturing suites, raising capital, acquiring raw materials for manufacturing, product candidate development and manufacturing, securing related intellectual property rights and conducting clinical trials of our Lomecel-B™ cellular therapy.
Sales of our products may involve a lengthy sales cycle. Many factors are expected to influence the sales cycle for our approved product. These factors include the future state of the market, the perceived value of our product candidate(s), the evolution of competing technologies, insurance coverage or prior authorization requirements and changes in medical practices.
Sales of our products may involve a lengthy sales cycle. Many factors are expected to influence the sales cycle for products once they are approved. These factors include the future state of the market, the perceived value of our product candidate(s), the evolution of competing technologies, insurance coverage or prior authorization requirements and changes in medical practices.
In addition, we may experience numerous unforeseen events during, or as a result of, any future clinical trials that could delay or prevent our ability to receive marketing approval for, or to commercialize, of our product candidates, including: ● regulators, IRBs, or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; ● the FDA or other regulatory authorities may disagree with our clinical trial protocol, which may delay or prevent us from initiating our clinical trials; ● we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites, prospective CROs, and prospective local representatives which can be subject to extensive negotiation and may vary significantly among different local representatives, CROs and trial sites; ● the number of subjects required for clinical trials of any product candidates may be larger than we anticipate, or subjects may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; ● our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites or investigators; ● delays and interruptions to our clinical trials could extend the duration of the trials and increase the overall costs to finish the trials as our fixed costs are not substantially reduced during delays; ● we may elect to, or regulators, IRBs, or ethics committees may require that we or our investigators, suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; ● we may not have the financial resources available to begin and complete the planned trials, or the cost of clinical trials of any product candidates may be greater than we anticipate; ● the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our therapeutic candidates may be insufficient or inadequate to initiate or complete a given clinical trial; and ● The FDA or other comparable foreign regulatory authorities may require us to submit additional data such as long-term toxicology studies or may impose other requirements before permitting us to initiate a clinical trial. 43 Our product development costs will increase if we experience delays in clinical trials or in obtaining marketing approvals.
In addition, we may experience numerous unforeseen events during, or as a result of, any future clinical trials that could delay or prevent our ability to receive marketing approval for, or to commercialize, our product candidates, including: • regulators, IRBs, or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • the FDA or other regulatory authorities may disagree with our clinical trial protocol, which may delay or prevent us from initiating our clinical trials; • we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites, prospective CROs, and prospective local representatives which can be subject to extensive negotiation and may vary significantly among different local representatives, CROs and trial sites; • the number of subjects required for clinical trials of any product candidates may be larger than we anticipate, or subjects may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites or investigators; • delays and interruptions to our clinical trials could extend the duration of the trials and increase the overall costs to finish the trials as our fixed costs are not substantially reduced during delays; • we may elect to, or regulators, IRBs, or ethics committees may require that we or our investigators, suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; 38 • we may not have the financial resources available to begin and complete the planned trials, or the cost of clinical trials of any product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate to initiate or complete a given clinical trial; and • The FDA or other comparable foreign regulatory authorities may require us to submit additional data such as long-term toxicology studies or may impose other requirements before permitting us to initiate or complete a clinical trial.
On March 10, 2020, the former Trump administration sent “principles” for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses, and place limits on pharmaceutical price increases.
On March 10, 2020, the first Trump Administration sent “principles” for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses, and place limits on pharmaceutical price increases.
The former Trump administration previously released a “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contained proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out-of-pocket costs of drug products paid by consumers. The U.S.
The first Trump Administration previously released a “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contained proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out-of-pocket costs of drug products paid by consumers. The U.S.
These laws, and future state and federal healthcare reform measures may be adopted in the future, any of which may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our therapeutic candidates for which we may obtain regulatory approval or the frequency with which any such therapeutic candidate is prescribed or used.
These laws, and future state and federal healthcare reform measures may be adopted in the future, any of which may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
There are no assurances that we will be able to continue to finance operations through these means, and our inability to generate sufficient revenue in the near term may have an adverse impact on our business, operations and prospects. 32 We face risks related to health epidemics and outbreaks.
There are no assurances that we will be able to continue to finance operations through these means, and our inability to generate sufficient revenue in the near term may have an adverse impact on our business, operations and prospects. We face risks related to health epidemics, pandemics, and outbreaks.
We may also need to raise additional funds sooner if we choose to pursue additional indications and/or geographies for our current product candidate or otherwise expand more rapidly than we presently anticipate. Furthermore, we expect to continue to incur significant costs associated with operating as a public company.
We may also need to raise additional funds sooner if we choose to pursue additional indications and/or geographies for our current product candidates or otherwise expand more rapidly than we presently anticipate. Furthermore, we expect to continue to incur significant costs associated with operating as a public company.
The claims of existing U.S. and foreign patent applications and patents, and those patents that may issue in the future, or those to be licensed to us, that are owned by the Company or under an obligation of assignment to the Company, may not confer on us significant commercial protection against competing products.
The claims of existing U.S. and foreign patent applications and patents, and those patents that may issue in the future, or those to be licensed to us, that are owned by the Company or under an obligation of assignment to the Company, may not confer on us significant commercial protection against competing products, methods, or processes.
Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates and may allow our competitors to bring products to market before we do, potentially impairing our ability to successfully commercialize our product candidates and harming our business and results of operations.
Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our products following approval and may allow our competitors to bring products to market before we do, potentially impairing our ability to successfully commercialize our product candidates and harming our business and results of operations.
At the federal level, the former Trump administration’s budget for fiscal year 2021 included a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs.
At the federal level, the first Trump Administration’s budget for fiscal year 2021 included a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs.
We cannot market and sell our product candidates in the U.S. or in other countries if we fail to obtain the necessary regulatory approvals. We cannot sell our product candidates until regulatory agencies grant marketing approval. The process of obtaining regulatory approval is lengthy, expensive, and uncertain, and the legal requirements for obtaining approval may change.
We cannot market and sell our product candidates in the U.S. or in other countries if we fail to obtain the necessary regulatory approvals. We cannot sell our product candidates until regulatory authorities grant marketing approval. The process of obtaining regulatory approval is lengthy, expensive, and uncertain, and the legal requirements for obtaining approval may change.
It is likely to take several years to obtain the required regulatory approvals for our lead signaling cell product candidates, or we may never gain the necessary approvals. Any difficulties that we encounter in obtaining regulatory approval may have a substantial adverse impact on our operations.
It is likely to take several years to obtain the required regulatory approvals for our lead product candidates, or we may never gain the necessary approvals. Any difficulties that we encounter in obtaining regulatory approval may have a substantial adverse impact on our operations.
Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and the value of our company in general.
Further, others, including regulatory authorities, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and the value of our company in general.
If we are unable to raise capital when needed, we could be forced to delay, scale back or discontinue some of our therapeutic candidate development programs or commercialization efforts. The development of pharmaceutical drugs is capital intensive. We are currently advancing Lomecel-B TM into clinical development.
If we are unable to raise capital when needed, we could be forced to delay, scale back or discontinue some of our product candidate development programs or commercialization efforts. The development of pharmaceutical drugs is capital intensive. We are currently advancing Lomecel-B TM into clinical development.
Although our first year incurring NOLs will be for the tax year ended 2021, the net operating loss carryforwards, or NOLs, could expire unused and be unavailable to offset future income tax liabilities because of their limited duration or because of restrictions under U.S. tax law.
Although our first year incurring NOLs was for the tax year ended 2021, the net operating loss carryforwards, or NOLs, could expire unused and be unavailable to offset future income tax liabilities because of their limited duration or because of restrictions under U.S. tax law.
In addition, the global macroeconomic environment has been and may continue to be negatively affected by, among other things, instability in global economic markets, increased U.S. trade tariffs and trade disputes with other countries, instability in the global credit markets, supply chain weaknesses, instability in the geopolitical environment as a result of the Russian invasion of the Ukraine, the withdrawal of the United Kingdom from the European Union, and other political tensions, and foreign governmental debt concerns.
In addition, the global macroeconomic environment has been and may continue to be negatively affected by, among other things, instability in global economic markets, increased U.S. trade tariffs and trade disputes with other countries, instability in the global credit markets, supply chain weaknesses, instability in the geopolitical environment as a result of the Russian invasion of the Ukraine, the Israeli-Palestinian conflict, the withdrawal of the United Kingdom from the European Union, other political tensions, and foreign governmental debt concerns.
These products may compete with our product candidates, and our or our licensors patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
These products may compete with our product candidates, and our or our licensors' patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. If any of our product candidates are approved and we are found to have improperly promoted off-label uses of those products, we may become subject to significant liability.
The FDA and other regulatory authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses. If any of our product candidates are approved and we are found to have improperly promoted off-label uses of those products, we may become subject to significant liability.
Social media is increasingly being used to communicate about our clinical development programs and the diseases our therapeutics are being developed to treat, and we intend to utilize appropriate social media in connection with our commercialization efforts following approval of our therapeutic candidates, if any.
Social media is increasingly being used to communicate about our clinical development programs and the diseases our therapeutics are being developed to treat, and we intend to utilize appropriate social media in connection with our commercialization efforts following approval of our product candidates, if any.
Failure to comply with or meet those requirements or commitments could result in withdrawal of the approved application by FDA. Regulatory agencies may also establish additional regulations, policies, or guidance that could prevent or delay regulatory approval of our product candidates.
Failure to comply with or meet those requirements or commitments could result in withdrawal of the approved application by FDA. Regulatory authorities may also establish additional regulations, policies, or guidance that could prevent or delay regulatory approval of our product candidates.
This may limit the programs we are able to pursue and result in significant delays in the development, sale, and manufacture of our product candidates and products, and may have a material adverse effect on our business, financial condition, and results of operations.
This may limit the programs we are able to pursue and result in significant delays in the development, sale, and manufacture of our product candidates and future approved products, and may have a material adverse effect on our business, financial condition, and results of operations.
Our dependence upon a limited supply of bone marrow donors and biologic growth media may impact our ability to produce sufficient quantities of our product candidates as needed to complete our clinical trials, and if our trials are successful, to meet product demand.
Our dependence upon a limited supply of bone marrow donors and biologic growth media may impact our ability to produce sufficient quantities of our product candidates as needed to complete our clinical trials, and if our trials are successful and our products are approved, to meet product demand.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+1 added−2 removed6 unchanged
Biggest changeThe Company, as part of cost-cutting initiatives in 2024, has eliminated the VBPO position; the obligations of that position as it relates to cybersecurity oversight and risk management will be undertaken by the Company’s General Counsel. ● Collaborative Approach: The Company, through its information technology partner, has implemented a comprehensive, cross-functional approach to identifying, preventing, and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner. ● Technical Safeguards: The Company, through its information technology partner, deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti- malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence. ● Incident Response and Recovery Planning: The Company, with its information technology partner, maintains comprehensive incident response and recovery plans that fully address the Company’s response to a cybersecurity incident. ● Education and Awareness: The Company, through its information technology partner, provides regular, mandatory training for personnel regarding cybersecurity threats to equip the Company’s personnel with effective tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes, and practices.
Biggest changeRisk Management and Strategy As one of the critical elements of the Company’s overall ERM approach, the Company’s cybersecurity program is focused on the following key areas: • Governance: As discussed in more detail under the heading “Governance,” The Board’s oversight of cybersecurity risk management is supported by the Audit Committee of the Board (the “Audit Committee”), which regularly interacts with the Company’s General Counsel ("GC"), Chief Technology Officer ("CTO"), other members of management and relevant management committees, including Company’s Senior Leadership Team (“SLT”), regarding cybersecurity oversight and risk management. • Collaborative Approach: The Company, through its information technology partner , has implemented a comprehensive, cross-functional approach to identifying, preventing, and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner. • Technical Safeguards: The Company, through its information technology partner, deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti- malware functionality and access controls, which are evaluated and improved through vulnerability assessments, penetration testing, and cybersecurity threat intelligence. • Incident Response and Recovery Planning: The Company, with its information technology partner, maintains comprehensive incident response and recovery plans that fully address the Company’s response to a cybersecurity incident. • Education and Awareness: The Company, through its information technology partner, provides regular, mandatory training for personnel regarding cybersecurity threats to equip the Company’s personnel with effective tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes, and practices.
The Company engages in the periodic assessment and testing of the Company’s policies, standards, processes, and practices that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities, including audits, assessments, tabletop exercises, threat modeling, vulnerability testing and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.
The Company engages in the periodic assessment and testing of the Company’s policies, standards, processes, systems, and practices that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities, including audits, assessments, tabletop exercises, threat modeling, vulnerability and penetration testing and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.
The VPBO and the SLT, through its information technology partner receives regular reports on cybersecurity risks, which address a wide range of topics including recent developments, evolving standards, vulnerability assessments, the threat environment, technological trends and information security considerations.
The CTO and the SLT, through its information technology partner receives regular reports on cybersecurity risks, which address a wide range of topics including recent developments, evolving standards, vulnerability assessments, the threat environment, technological trends and information security considerations.
Governance The VPBO, in coordination with the SLT, oversees the Company’s ERM process, including the management of risks arising from cybersecurity threats.
Governance The CTO, in coordination with the SLT, oversees the Company’s ERM process, including the management of risks arising from cybersecurity threats.
The results of such assessments, audits and reviews are reported to the VPBO who shares data with the SLT, Audit Committee and the Board, and the Company adjusts its cybersecurity policies, standards, processes and practices as necessary based on the information provided by these assessments, audits and reviews.
The results of such assessments, audits and reviews are reported to the CTO and GC who shares data with the SLT and Audit Committee, and the Company adjusts its cybersecurity policies, standards, processes and practices as necessary based on the information provided by these assessments, audits and reviews.
To facilitate the success of the Company’s cybersecurity risk management program, multidisciplinary teams throughout the Company are deployed to address cybersecurity threats and to respond to cybersecurity incidents.
To facilitate the success of the Company’s cybersecurity risk management program, multidisciplinary teams are prepared to address cybersecurity threats and to respond to cybersecurity incidents.
Through ongoing communications with the Company’s information technology partner, these teams monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and report such threats and incidents to the Company’s SLT and Audit Committee, when appropriate. 74 The Company’s information technology partner has worked in information technology and information security for over 30 years with over 300 employees with six locations in the United States.
Through ongoing communications with the Company’s information technology partner, these teams monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and report such threats and incidents to the Company’s SLT and Audit Committee, when appropriate.
The VPBO, in coordination with the SLT, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with the Company’s incident response and recovery plans.
On an annual basis, the Audit Committee and the Board discuss the Company’s approach to cybersecurity risk management with the members of the SLT, which includes the Company’s CTO, GC, and Chief Financial Officer (“CFO”). 67 The CTO, in coordination with the SLT, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with the Company’s incident response and recovery plans.
A virtual Chief Information Officer (“vCIO”) from the partner works directly with the VPBO for align business and technical strategies, decisions, and implementations. The VPBO has over 35 years in the pharmaceutical and biotech industry managing programs and projects across a variety of implementation methodologies and risk factors and holds undergraduate degrees and certifications in his respective field.
The CTO has nearly 20 years of experience in the pharmaceutical and biotech industry managing programs and projects across a variety of implementation methodologies and risk factors and holds undergraduate degrees and certifications in his respective field.
Removed
Risk Management and Strategy As one of the critical elements of the Company’s overall ERM approach, the Company’s cybersecurity program is focused on the following key areas: ● Governance: As discussed in more detail under the heading “Governance,” The Board’s oversight of cybersecurity risk management is supported by the Audit Committee of the Board (the “Audit Committee”), which regularly interacts with the Company’s Vice President, Business Operations (“VPBO”), other members of management and relevant management committees, including Company’s Senior Leadership Team (“SLT”).
Added
The Company’s information technology partner has worked in information technology and information security for over 30 years with over 300 employees with six locations in the United States. A virtual Chief Information Officer (“vCIO”) from the partner works directly with the Company to align business and technical strategies, decisions, and implementations.
Removed
On an annual basis, the Audit Committee and the Board discuss the Company’s approach to cybersecurity risk management with the members of the SLT, which includes the Company’s VPBO, Chief Financial Officer (“CFO”), and General Counsel.

Item 2. Properties

Properties — owned and leased real estate

1 edited+1 added−0 removed0 unchanged
Biggest changeItem 2. Properties Our principal executive office is located at 1951 NW 7th Avenue, Suite 520, Miami, Florida 33136. We rent approximately 15,000 ft 2 of space, which includes our executive offices and cGMP manufacturing facility, and research and development operations. See “ Manufacturing ” on page 7 of this 10-K for additional details regarding our facilities.
Biggest changeItem 2. Properties Our principal executive offices are located at 1951 NW 7th Avenue, Suite 520, Miami, Florida 33136. We rent approximately 15,000 ft 2 of space, which includes our executive offices and cGMP manufacturing facility, and research and development operations.
Added
This property is used by the Company’s single operating segment focused on developing regenerative medicines to address unmet medical needs. See “ Manufacturing ” on page 5 of this 10-K for additional details regarding our facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+1 added−5 removed1 unchanged
Biggest changeItem 4. Mine Safety Disclosures Not Applicable. 75 PART II
Biggest changeItem 4. Mine Safety Disclosures Not Applicable. 68 PART II
Removed
On September 13, 2021, the Company and certain of our directors and officers were named as defendants in a securities lawsuit filed in the U.S. District Court for the Southern District of Florida and brought on behalf of a purported class.
Added
While management does not currently believe that the ultimate disposition of these matters will have a material adverse impact on the Company’s results of operations, cash flows, or financial position, litigation is inherently unpredictable, and depending on the nature and timing of these proceedings, an unfavorable resolution could materially affect the Company’s future results of operations, cash flows or financial condition in a particular period.
Removed
The suit alleged there were materially false and misleading statements made (or omissions of required information) in the Company’s initial public offering materials and in other disclosures during the period from our initial public offering on February 12, 2021, through August 12, 2021, in violation of the federal securities laws.
Removed
The complaint sought unspecified damages on behalf of a proposed class of purchasers of our Class A common stock during said period. On July 12, 2022, all parties preliminarily agreed to settle the action for approximately $1.4 million, which amount was accrued as of June 30, 2022, and was paid during the quarter ended June 30, 2023.
Removed
On or about May 18, 2023, a former employee of the Company filed a charge with the Equal Employment Opportunities Commission (“EEOC”) and the Florida Commission on Human Relations alleging discrimination based on disability, and on or about August 15, 2023, the former employee filed a complaint in Miami-Dade Circuit Court alleging unpaid wages were outstanding.
Removed
Both matters were addressed, fully resolved and settled in a mediation between the Company and the former employee held on September 28, 2023, by which it was agreed that the former employee would be paid $75,000 (a total of $35,000 towards this resolution was paid by the Company and all remaining costs were covered by the Company’s insurance carrier) and that the EEOC and FCHR charges were withdrawn and the action in the Miami-Dade Circuit Court was dismissed with prejudice.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 75 PART II 76 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 76 Item 6. [Reserved] 76 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 77 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 89 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 68 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 69 Item 6. [Reserved] 69 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 70 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 81 Item 8.
Removed
Financial Statements and Supplementary Data 89 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 89 Item 9A. Controls and Procedures 89 Item 9B. Other Information 90

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMarket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Stock; Holders Our Class A common stock is traded on The Nasdaq Capital Market under the under the symbol “LGVN.” Holders of Common Stock As of February 16, 2024, there were 15 and 12 holders of record of our Class A and Class B common stock, respectively, based on information provided by our transfer agent, Colonial Stock Transfer Co., Inc.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Stock; Holders Our Class A common stock is traded on The Nasdaq Capital Market under the under the symbol “LGVN.” Our Class B common stock is not listed or traded on any stock exchange or other market.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities; Repurchases of Securities ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased (a) Average Price Paid per Share (or Unit) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1-31, 2023 8,809 $ 2.29 - - November 1-30, 2023 - $ - - - December 1-31, 2023 361 $ 2.20 - - Total 9,170 $ 2.29 - - (a) Includes shares withheld from employees to satisfy minimum tax withholding obligations associated with the vesting of restricted stock units during the period.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities; Repurchases of Securities ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares (or Units) Purchased (a) Average Price Paid per Share (or Unit) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number or Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1-31, 2024 27,620 $ 1.88 - - November 1-30, 2024 233 1.98 - - December 1-31, 2024 - - - - Total 27,853 $ 1.88 - - (a) Includes shares withheld from employees to satisfy minimum tax withholding obligations associated with the vesting of restricted stock units during the period.
As of such date, 10,294,603 shares of our Class A common stock and 14,839,993 shares of our Class B common stock were issued and outstanding.
As of such date, 13,473,898 shares of our Class A common stock and 1,484,005 shares of our Class B common stock were issued and outstanding.
Added
Shares of Class A common stock are entitled to one (1) vote per share. Shares of Class B common stock are entitled to five (5) votes per share. Holders of our Class A common stock and Class B common stock generally vote together as a single class, unless otherwise required by law or our Certificate of Incorporation.
Added
Each share of our Class B common stock is convertible into one share of our Class A common stock at any time and converts automatically upon certain transfers. The Class A common stock is not convertible into Class B common stock.
Added
Holders of Common Stock As of February 17, 2025, there were 19 and 12 holders of record of our Class A and Class B common stock, respectively, based on information provided by our transfer agent, Colonial Stock Transfer Co., Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAt this time the Company has not evaluated the impact of any future profits. 80 RESULTS OF OPERATIONS COMPARISON OF THE YEARS ENDED DECEMBER 31, 2023 AND 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022, together with the changes in those items in dollars (in thousands): Year Ended December 31, Increase 2023 2022 (Decrease) Revenues $ 709 $ 1,222 $ (513 ) Cost of revenues 488 725 (237 ) Gross profit 221 497 (276 ) Operating Expenses General and administrative 11,401 8,119 3,282 Research and development 9,066 9,370 (304 ) Selling and marketing 783 1,051 (268 ) Total operating expenses 21,250 18,540 2,710 Loss from operations (21,029 ) (18,043 ) (2,986 ) Other (expense) and income Lawsuit expense (30 ) (1,398 ) 1,368 Other tax credits 23 306 (283 ) Other (expense) income, net (377 ) 300 (677 ) Total other expenses, net (384 ) (792 ) 408 Net loss $ (21,413 ) $ (18,835 ) $ (2,578 ) Revenues, Cost of Revenues and Gross Profit: Revenues for the years ended December 31, 2023 and 2022 were $0.7 million and $1.2 million, respectively. 2023 revenues decreased $0.5 million, or 42%, when compared to 2022 as a result of decreased grant and lower participant demand for our Bahamas Registry Trial.
Biggest changeRESULTS OF OPERATIONS 73 COMPARISON OF THE YEARS ENDED DECEMBER 31, 2024 AND 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023, together with the changes in those items in dollars (in thousands): Year Ended December 31, Increase 2024 2023 (Decrease) Revenues $ 2,392 $ 709 $ 1,683 Cost of revenues 508 488 20 Gross profit 1,884 221 1,663 Operating Expenses General and administrative 10,269 12,184 (1,915 ) Research and development 8,137 9,066 (929 ) Total operating expenses 18,406 21,250 (2,844 ) Loss from operations (16,522 ) (21,029 ) (4,507 ) Other income and (expense) Lawsuit expense - (30 ) (30 ) Other tax credits - 23 (23 ) Other income (expense), net 549 (377 ) 926 Total other income (expenses), net 549 (384 ) 933 Net loss $ (15,973 ) $ (21,413 ) $ (5,440 ) Revenues, Cost of Revenues and Gross Profit: Revenues for the years ended December 31, 2024 and 2023 were $2.4 million and $0.7 million, respectively. 2024 revenues increased $1.7 million, or 237%, when compared to 2023 as a result of higher participant demand for our Bahamas Registry Trial and the addition of our manufacturing services contract.
Specifically, we will incur expenses to: ● advance the clinical development of Lomecel-B™ for the treatment of several disease states and indications; ● pursue the preclinical and clinical development of other current and future research programs and product candidates; ● in-license or acquire the rights to other products, product candidates or technologies; ● maintain, expand and protect our intellectual property portfolio; ● hire additional personnel in research, manufacturing and regulatory and clinical development as well as management personnel; ● seek regulatory approval for any product candidates that successfully complete clinical development; and ● optimize our operational, financial and management systems and increase personnel, including personnel to support our operations as a public company.
Specifically, we will incur expenses to: • advance the clinical development of Lomecel-B™ for the treatment of several disease states and indications; • pursue the preclinical and clinical development of other current and future research programs and product candidates; • in-license or acquire the rights to other products, product candidates or technologies; • maintain, expand and protect our intellectual property portfolio; 79 • hire additional personnel in research, manufacturing and regulatory and clinical development as well as management personnel; • seek regulatory approval for any product candidates that successfully complete clinical development; and • optimize our operational, financial and management systems and increase personnel, including personnel to support our operations as a public company.
Based on the timing of amounts invoiced by service providers, we may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as the related services are rendered. 79 We currently do not carry any inventory for our product candidates, as we have yet to launch a product for commercial distribution.
Based on the timing of amounts invoiced by service providers, we may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as the related services are rendered. We currently do not carry any inventory for our product candidates, as we have yet to launch a product for commercial distribution.
Grant awards are recognized as revenue, and depending on the funding mechanism, are deposited directly in our accounts as lump sums, which are staggered over a predetermined period or drawn down from a federal payment management system account for reimbursement of expenses incurred. Revenue recognition occurs when the grant related expenses are incurred or supplies and materials are received.
Grant awards are recognized as revenue, and depending on the funding mechanism, are deposited directly in our accounts as lump sums, which are staggered over a predetermined period or drawn down from a federal payment management system account for reimbursement of expenses incurred. Revenue recognition occurs when the grant related expenses are incurred or supplies and 78 materials are received.
Investing Activities . Net cash provided by investing activities for the year ended December 31, 2023 was $8.2 million consisting primarily of proceeds from the sale of marketable securities of $8.9 million, which was partially offset by additions to intangible assets of $0.4 million and purchases of equipment of $0.3 million.
Net cash provided by investing activities for year ended December 31, 2023 was $8.2 million consisting primarily of proceeds from the sale of marketable securities of $8.9 million, which was partially offset by additions to intangible assets of $0.4 million and purchases of equipment of $0.3 million. Financing Activities .
This was partially offset by non-cash expenses of $2.0 million in equity-based compensation expenses, $0.9 million in depreciation and amortization, and $0.3 million for the write-off of intangible assets, as well as an increase in accrued expenses of $1.5 million.
This was partially offset by non-cash expenses of $2.0 million in equity-based compensation expenses, $0.9 million in depreciation and amortization, and $0.3 million for the write-off of intangible assets, as well as an increase in accrued expenses of $1.5 million. Investing Activities .
Research and development include costs such as clinical trial expenses, contracted research and license agreement fees with no alternative future use, supplies and materials, salaries, share-based compensation, employee benefits, property and equipment depreciation and allocation of various corporate costs.
Research and development include costs such as clinical trial expenses, contracted research and license agreement fees with no alternative future use, supplies and materials, salaries, equity-based compensation, employee benefits, property and equipment depreciation and allocation of various corporate costs.
Grant Awards From inception through December 31, 2023, we have been awarded approximately $11.9 million in governmental and non-profit association grants, which have been used to fund our clinical trials, research and development, production and overhead.
Grant Awards From inception through December 31, 2024, we have been awarded approximately $11.9 million in governmental and non-profit association grants, which have been used to fund our clinical trials, research and development, production and overhead.
General and Administrative Expenses 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 consist primarily of salaries and other related costs, including equity-based compensation, for personnel in our executive, finance, business development and administrative functions.
When appropriate funding opportunities arise, we routinely apply for grant funding to support our ongoing research and since 2016 we have received approximately $16.0 million in grant awards ($11.5 million of which has been directly awarded to us and is recognized as revenue when the performance obligations are met) from the National Institute on Aging (“NIA”) of the National Institutes of Health (“NIH”), the National Heart Lung and Blood Institute (“NHLBI”) of the NIH, the Alzheimer’s Association, and the Maryland Stem Cell Research Fund (“MSCRF”) of the Maryland Technology Development Corporation, or TEDCO. 78 Components of Our Results of Operations Revenue We have generated revenue from three sources: ● Grant awards.
When appropriate funding opportunities arise, we routinely apply for grant funding to support our ongoing research and since 2016 we have received approximately $16.0 million in grant awards ($11.5 million of which has been directly awarded to us and is recognized as revenue when the performance obligations are met) from the National Institute on Aging (“NIA”) of the National Institutes of Health (“NIH”), the National Heart Lung and Blood Institute (“NHLBI”) of the NIH, the Alzheimer’s Association, and the Maryland Stem Cell Research Fund (“MSCRF”) of the Maryland Technology Development Corporation, or TEDCO.
As of December 31, 2023, and 2022, the amount of unused grant funds that were available for us to draw was approximately $0.1 million and $0.8 million, respectively. The following table summarizes the grants awarded.
As of December 31, 2024, and 2023, the amount of unused grant funds that were available for us to draw was approximately $0.1 million and $0.1 million, respectively. The following table summarizes the grants awarded.
Longeveron is currently conducting a controlled study to determine the actual benefit of Lomecel-B™ in these patients. 77 As of February 16, 2024, we have completed five U.S. clinical studies of Lomecel-B™: Phase 1 AD, Phase 1 HLHS, Phase 1/2 Aging-related frailty (“HERA Trial”), Phase 2a AD (CLEAR MIND Trial”), and Phase 2b Aging-related frailty.
Longeveron is currently conducting a controlled study to determine the actual benefit of Lomecel-B™ in these patients. As of February 17, 2025, we have completed five U.S. clinical studies of Lomecel-B™: Phase 1 AD, Phase 1 HLHS, Phase 1/2 Aging-related Frailty (“HERA Trial”), Phase 2a AD (CLEAR MIND Trial”), and Phase 2b Aging-related Frailty.
We have incurred losses since inception. Net cash used in operating activities for the year ended December 31, 2023 was $19.0 million, consisting primarily of our net loss of $21.4 million and payments for accounts payable of $1.1 million and payment of the non-operating lawsuit of $1.4 million.
Net cash used in operating activities for the year ended December 31, 2023 was $19.0 million, consisting primarily of our net loss of $21.4 million and payments for accounts payable of $1.1 million and payment of the non-operating lawsuit of $1.4 million.
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. Contractual Obligations and Commitments As of December 31, 2023, we have $2.0 million in operating lease obligations and $1.5 million in CRO payment obligations.
In addition, we may 80 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. Contractual Obligations and Commitments As of December 31, 2024, we have $1.4 million in operating lease obligations and no CRO payment obligations.
Since 2016 our clinical programs have received over $16.0 million in competitive extramural grant awards ($11.5 million which has been directly awarded to us and which are recognized as revenue when the performance obligations are met) from the NIH, Alzheimer’s Association, and MSCRF. ● The Bahamas Registry Trials.
Since 2016 our clinical programs have received over $16.0 million in competitive extramural grant awards ($11.5 million which has been directly awarded to us and which are recognized as revenue when the performance obligations are met) from the NIH, Alzheimer’s Association, and MSCRF. 72 Cost of Revenues We record cost of revenues based on expenses directly related to revenue.
Since we were formed, we have raised approximately $83.9 million in gross proceeds from the issuance of equity. As of December 31, 2023, the Company had cash and cash equivalents of $4.9 million, marketable securities of $0.4 million and working capital of approximately $2.0 million.
Since we were formed, we have raised approximately $113.0 million in gross proceeds from the issuance of equity. As of December 31, 2024, the Company had cash and cash equivalents of $19.2 million and working capital of approximately $17.0 million.
We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis.
We base our estimates on historical experience, anticipated results and trends and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources.
LIQUIDITY AND CAPITAL RESOURCES Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses as we advance the preclinical and clinical development of our programs.
We expect to incur significant expenses and operating losses as we advance the preclinical and clinical development of our programs.
It identifies: first, those activities that should be identified as research and development; second, the elements of costs that should be identified with research and development activities, and the accounting for these costs; and third the financial statement disclosures related to them.
ASC 730 addresses the proper accounting and reporting for research and development costs. It identifies: 1. Those activities that should be identified as research and development; 2. The elements of costs that should be identified with research and development activities, and the accounting for these costs; and 3. The financial statement disclosures related to them.
While our significant accounting policies are described in more detail in the notes to our financial statements included in this 10-K, we believe that the following accounting policies are those most critical due to the judgments and estimates used in the preparation of our financial statements. Impairment of Long-Lived Assets.
While our significant accounting policies and estimates are described in more detail in the accompanying Notes to the Condensed Financial Statements contained in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical due to the judgments and estimates used in the preparation of our financial statements. Revenue recognition.
Clinical trial revenue, which is derived from the Bahamas Registry Trial, for the years ended December 31, 2023 and 2022 was $0.7 million and $0.9 million, respectively. Clinical trial revenue for the year ended December 31, 2023 decreased by $0.2 million, or 29%, when compared to 2022 as a result of decreased participant demand.
Clinical trial revenue, which is derived from the Bahamas Registry Trial, for the years ended December 31, 2024 and 2023 was $1.4 million and $0.7 million, respectively, reflecting an increase of $0.7 million, or 110%, when compared to 2023 as a result of increased participant demand.
Based on the timing of amounts invoiced by service providers, we may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as the related services are rendered. 88 Emerging Growth Company Status We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or JOBS Act, which is a law intended to encourage funding of small businesses in the U.S. by easing many of the country’s securities regulations, and we may take advantage of reduced reporting requirements that are otherwise applicable to public companies.
Emerging Growth Company Status We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or JOBS Act, which is a law intended to encourage funding of small businesses in the U.S. by easing many of the country’s securities regulations, and we may take advantage of reduced reporting requirements that are otherwise applicable to public companies.
Research and development expenses consisted primarily of the following items (less those expenses allocated to the cost of revenues for the grants)(in thousands): Year Ended December 31, 2023 2022 Clinical trial expenses-statistics, monitoring, labs, sites, etc. $ 4,349 $ 4,170 Supplies and costs to manufacture Lomecel-B™ 1,214 817 Employee compensation and benefits 1,861 2,203 Equity-based compensation 555 1,096 Depreciation 722 681 Amortization 224 212 Travel 38 72 Other activities 103 119 Total $ 9,066 $ 9,370 Selling and Marketing Expenses: Selling and marketing expenses for the years ended December 31, 2023 and 2022 were $0.8 million and $1.1 million, respectively.
Research and development expenses consisted primarily of the following items (less those expenses allocated to the cost of revenues) (in thousands): 74 Year Ended December 31, 2024 2023 Clinical trial expenses-statistics, monitoring, labs, sites, etc. $ 2,031 $ 4,349 Supplies and costs to manufacture Lomecel-B™ 327 1,214 Employee compensation and benefits 3,554 1,861 Equity-based compensation 825 555 Depreciation 735 722 Amortization 224 224 Travel 173 38 Other activities 268 103 Total $ 8,137 $ 9,066 Other Income (Expense), net: Other income (expense) for the years ended December 31, 2024 and 2023 was an income of $0.6 million and an expense of $0.4 million, respectively.
The total award was $4.6 million, and we have received $0.3 million of the approximately $0.5 million apportioned to us. 85 Terms and Conditions of Grant Awards Grant projects are typically divided into periods (e.g., a three-year grant may have three one-year periods), and the total amount awarded is divided according to the number of periods.
Terms and Conditions of Grant Awards Grant projects are typically divided into periods (e.g., a three-year grant may have three one-year periods), and the total amount awarded is divided according to the number of periods.
Lomecel-B™ is considered an investigational treatment in The Bahamas and is not licensed for commercial sale. ● Contract development and manufacturing services. From time to time, we enter into fee-for-service agreements with third parties for our product development and manufacturing capabilities. Cost of Revenues We record cost of revenues based on expenses directly related to revenue.
Lomecel-B™ is considered an investigational treatment in The Bahamas and is not licensed for commercial sale. • Contract development and manufacturing services. From time to time, we enter into fee-for-service agreements with third parties for our product development and manufacturing capabilities. These agreements may include research, process development, and manufacturing services tailored to customer needs.
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 December 31, 2023 the Company had an accumulated deficit of $85.0 million. The Company expects to continue to generate operating losses for the foreseeable future.
The Company has incurred recurring losses from operations since its inception, and as of December 31, 2024 the Company had an accumulated deficit of $109.6 million. The Company expects to continue to generate operating losses for the foreseeable future.
Since our founding in 2014, we have focused the majority of our time and resources on the following: organizing and staffing our company, building, staffing and equipping a cGMP manufacturing facility with research and development labs, business planning, raising capital, establishing our intellectual property portfolio, generating clinical safety and efficacy data in our selected disease conditions and indications, and developing and expanding our manufacturing processes and capabilities.
While Lomecel-B™ is considered an investigational product in The Bahamas, under the approval terms from the National Stem Cell Ethics Committee, we are permitted to charge a fee to participate in the Registry Trial. 70 Since our founding in 2014, we have focused the majority of our time and resources on the following: organizing and staffing our company, building, staffing and equipping a cGMP manufacturing facility with research and development labs, business planning, raising capital, establishing our intellectual property portfolio, generating clinical safety and efficacy data in our selected disease conditions and indications, and developing and expanding our manufacturing processes and capabilities.
This resulted in a gross profit of approximately $0.2 million for the year ended December 31, 2023, a decrease of $0.3 million, or 56%, when compared with a gross profit of $0.5 million for 2022.
This resulted in a gross profit of approximately $1.9 million for the year ended December 31, 2024, an increase of $1.7 million, or 752%, when compared with a gross profit of $0.2 million for 2023.
The increase in the net loss of $2.6 million, or 14%, was for reasons outlined above. 82 Cash Flows The following table summarizes our sources and uses of cash for the period presented for the (in thousands): Year Ended December 31, 2023 2022 Net cash used in operating activities $ (19,002 ) $ (13,969 ) Net cash proved by (used in) investing activities 8,186 (677 ) Net cash provided by (used in) financing activities 5,262 (509 ) Net decrease in cash and cash equivalents $ (5,554 ) $ (15,155 ) Operating Activities .
Cash Flows The following table summarizes our sources and uses of cash for the period presented for the (in thousands): Year Ended December 31, 2024 2023 Net cash used in operating activities $ (13,868 ) $ (19,002 ) Net cash (used in) provided by investing activities (640 ) 8,186 Net cash provided by financing activities 28,791 5,262 Net increase (decrease) in cash and cash equivalents $ 14,283 $ (5,554 ) Operating Activities .
(3) The HLHS Phase 2b clinical trial grant was awarded to Sunjay Kaushal, MD, PhD, Ann and Robert H. Lurie Children’s Hospital of Chicago, and the trial will be conducted under our IND and will test Lomecel-B™.
(3) The HLHS Phase 2b clinical trial grant was awarded to Sunjay Kaushal, M.D., Ph.D, Ann and Robert H. Lurie Children’s Hospital of Chicago, and the trial will be conducted under our IND and will test Lomecel-B™. The total award was $4.6 million, and we have received $0.3 million of the approximately $0.5 million apportioned to us.
In a concurrent private placement with the October 2023 Registered Direct Offering, the Company also sold to the Purchaser unregistered Series A warrants to purchase up to an aggregate of 2,424,243 shares of its Class A common stock and unregistered Series B warrants to purchase up to an aggregate of 2,424,243 shares of its Class A common stock (the “October 2023 Private Placement” and together with the October 2023 Registered Direct Offering, the “October 2023 Offering”).
In a concurrent private placement (the “July private placement” and together with the July registered direct offering, the “July offering”), we also sold unregistered Class A common stock warrants to purchase up to an aggregate of 2,236,026 shares of our Class A common stock (the “July private placement warrants”).
With respect to HLHS, we are exploring the possibility that Lomecel-B™ when administered directly to the myocardium of affected infants, can improve outcomes in this devastating rare pediatric disease. The standard of care in HLHS is a series of three reconstructive surgeries, typically at 10 days, 4 months, and approximately 4 years of life.
With respect to HLHS, we are exploring the possibility that Lomecel-B™ when administered directly to the myocardium of affected infants, can improve outcomes in this devastating rare pediatric disease. The standard of care in HLHS is a series of three heart surgeries (staged surgical palliation) that reconfigures the single right ventricle to support system circulation.
Net cash provided by financing activities for the year ended December 31, 2023 was $5.3 million consisting primarily of $5.4 million of net proceeds received from the October 2023 and December 2023 Offerings. Net cash used in financing activities for the year ended December 31, 2022 was $0.5 million consisting primarily of $0.5 million in payment of taxes and consultants.
Net cash provided by financing activities for the year ended December 31, 2023 was $5.3 million consisting primarily of $5.4 million of net proceeds received from the October 2023 and December 2023 offerings. 75 LIQUIDITY AND CAPITAL RESOURCES Since our inception, we have incurred significant operating losses.
Research and Development Expenses Research and development costs are charged to expense when incurred in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 730 Research and Development. ASC 730 addresses the proper accounting and reporting for research and development costs.
For contract manufacturing revenue, directly related expenses for the services and facilities provided under the contract are recorded as cost of revenues. Research and Development Expenses Research and development costs are charged to expense when incurred in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 730 Research and Development.
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 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 net proceeds to the Company from the 2023 December 2023 Offering was approximately $2.0 million, after deducting placement agent fees and other offering expenses paid by the Company.
The gross proceeds to the Company from the July offering were approximately $9.0 million, before deducting placement agent fees and other offering expenses payable by the Company.
(“U.S. GAAP”). The preparation of our financial statements and related disclosures requires us to make estimates, judgements and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
The preparation of these financial statements requires that we make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.
Net Loss: Net loss increased to approximately $21.4 million for the year ended December 31, 2023, from a net loss of $18.8 million for the same period in 2022.
Net Loss: Net loss decreased to approximately $16.0 million for the year ended December 31, 2024 from a net loss of $21.4 million for the same period in 2023. The decrease in the net loss of $5.4 million, or 25%, was for reasons outlined above.
General and Administrative Expense: General and administrative expenses for the year ended December 31, 2023 increased to approximately $11.4 million, compared to $8.1 million for the same period in 2022 .
Research and Development Expenses: Research and development expenses for the year ended December 31, 2024 decreased to approximately $8.1 million from approximately $9.1 million for the same period in 2023.
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. 86 Because of the numerous risks and uncertainties associated with research, development and commercialization of our product candidates, it is difficult to estimate with certainty the amount of our working capital requirements.
Because of the numerous risks and uncertainties associated with research, development and commercialization of our product candidates, it is difficult to estimate with certainty the amount of our working capital requirements.
Net cash used in investing activities for year ended December 31, 2022 was $0.7 million, consisting primarily of an increase in purchases of equipment of $0.6 million and purchases of intangibles of $0.3 million. Financing Activities .
Net cash used in investing activities for the year ended December 31, 2024 was $0.6 million consisting primarily of additions to intangible assets of $0.6 million and purchases of equipment of $0.3 million, which was partially offset by proceeds from the sale of marketable securities of $0.3 million.
Extramural grant award funding, which is non-dilutive, has been a core strategy for supporting our ongoing clinical research.
Additional suites may also be secured based on capacity needs, which are billed at a fixed fee per suite per month. • Grant awards. Extramural grant award funding, which is non-dilutive, has been a core strategy for supporting our ongoing clinical research.
We have not included milestone or royalty payments or other contractual payment obligations if the timing and amount of such obligations are unknown or uncertain. 87 Critical Accounting Policies and Use of Estimates Our management’s discussion and analysis of financial condition, results of operations and liquidity are based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the U.S.
Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations is based upon our condensed financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, (U.S. GAAP).
This decrease was partially offset by realized losses on sales of marketable securities of $0.3 million, write-offs of intangible assets of $0.3 million and reduced benefit of tax credits of $0.3 million. Also recorded in other (expense) income in 2022 was approximately $27,000 for a gain resulting from foreign currency changes and $27,000 of sublease rental income.
Net other income for 2024 was driven by a higher interest income, compared to net other expense for 2023 driven by realized losses on sales of marketable securities of $0.3 million, write-offs of intangible assets of $0.3 million and reduced benefit of tax credits of $0.3 million.
Introduction and Overview We are a clinical stage biotechnology company developing regenerative medicines to address unmet medical needs. The Company’s lead investigational product is Lomecel-B™. Lomecel-B™ has multiple modes of action that include pro-vascular, pro-regenerative, and anti-inflammatory mechanisms, promoting tissue repair and healing with broad potential applications across a spectrum of disease areas.
Lomecel-B™ has multiple modes of action that include pro-vascular, pro-regenerative, and anti-inflammatory mechanisms, promoting tissue repair and healing with broad potential applications across a spectrum of disease areas. We are currently pursuing three pipeline indications: Hypoplastic Left Heart Syndrome (“HLHS”), Alzheimer’s disease (“AD”) and Aging-related Frailty.
We are currently pursuing 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 trials, with the goal of achieving regulatory approvals, subsequent commercialization, and broad use by the healthcare community. Financial Overview.
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. Financial Overview. Since inception, the Company has primarily been engaged in organizational activities, including raising capital, and research and development activities.
On October 11, 2023 the Company entered into a securities purchase agreement with an institutional and accredited investor (the “Purchaser”) relating to the registered direct offering and sale of an aggregate of 2,365,000 shares of the Company’s Class A common stock, par value $0.001 per share and pre-funded warrants to purchase up to 59,243 shares of Class A common stock at an exercise price of $0.001 per share, at a purchase price of $1.65 per share of common stock and $1.649 per pre-funded Warrant (the “October 2023 Registered Direct Offering”), which Offering closed and was funded on October 13, 2023.
On July 18, 2024, we entered into a securities purchase agreement with institutional and accredited investors relating to the registered direct offering and sale of an aggregate of 2,236,026 shares of our Class A common stock at a purchase price of $4.025 per share of Class A common stock and associated warrant (the “July registered direct offering”).
We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the second 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 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 2025 based on our current operating budget and cash flow forecast. However, as a result of our Type C meeting with the U.S.
Net cash used in operating activities for the year ended December 31, 2022 was $14.0 million, consisting primarily of our net loss of $18.8 million, partially offset by $1.4 million in non-operating lawsuit expenses not paid until May 2023 and other non-cash expenses of $2.2 million in equity-based compensation expenses and $0.9 million in depreciation and amortization expenses.
This was partially offset by non-cash expenses of $2.3 million in equity-based compensation expenses and $1.0 million in depreciation and amortization.
We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the second 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 believe that our cash and cash equivalents as of December 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2025 based on our current operating budget and cash flow forecast. However, as a result of our successful Type C meeting with the U.S.
We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the second 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 believe that our cash and cash equivalents as of December 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2025 based on our current operating budget and cash flow forecast. However, as a result of our successful Type C meeting with the U.S.
Related cost of revenues was $0.5 million and $0.7 million for the years ended December 31, 2023 and 2022, respectively. The decrease of $0.2 million, or 33%, was primarily due to the decrease in the revenues earned from the Bahamas Registry Trials and reduced direct costs associated with our grants program.
Contract manufacturing revenue for the year ended December 31, 2024 was $1.0 million, consisting of $0.5 million from our manufacturing lease services and $0.5 million from our manufacturing services contract. Related cost of revenues was $0.5 million and $0.5 million for the years ended December 31, 2024 and 2023, respectively.
The increase of approximately $3.3 million, or 40%, was primarily related to an increase of $1.6 million for compensation and benefit expenses (including $0.4 million of separation costs), $1.0 million in legal, professional and consulting fees, $0.4 million of public company expenses, $0.2 million in equity-based compensation costs allocated to general and administrative expenses, and $0.1 million for higher board fees. 81 Research and Development Expenses: Research and development expenses for the year ended December 31, 2023 decreased to approximately $9.1 million, from approximately $9.4 million for the same period in 2022.
General and Administrative Expense: General and administrative expenses for the year ended December 31, 2024 decreased to approximately $10.3 million compared to $12.2 million for the same period in 2023. The decrease of approximately $1.9 million, or 16%, was primarily due to lower personnel expenses as a result of reduced severance in 2024 and lower legal and other administrative expenses.
The decrease of $0.3 million, or 3%, was primarily due to decreases of $0.5 million in equity-based compensation allocated to research and development expenses and $0.3 million in compensation and benefits, offset by increases of $0.4 million in supplies and costs to manufacture Lomecel-B™ and $0.2 million in research and development expenses that were not reimbursable by grants.
These reductions were partially offset by $1.7 million in higher compensation and benefit costs and a $0.3 million increase in equity-based compensation expenses allocated to research and development.
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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.
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Operating results are not necessarily indicative of results that may occur in future periods. Introduction and Overview We are a clinical stage biotechnology company developing regenerative medicines to address unmet medical needs. The Company’s lead investigational product is Lomecel-B™.
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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. Operational Overview .
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FDA in August 2024 with respect to the HLHS regulatory pathway, we have started to ramp up Biologics License Application (BLA) enabling activities as we currently anticipate a potential filing with the FDA in 2026 if the current ELPIS II trial is successful.
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While Lomecel-B™ is considered an investigational product in The Bahamas, under the approval terms from the National Stem Cell Ethics Committee, we are permitted to charge a fee to participate in the Registry Trial.
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Our operating expenses and capital expenditure requirements are expected to accelerate in calendar 2025 as a result of these activities, including CMC (Chemistry, Manufacturing, and Controls) and manufacturing readiness, and there will be a need to increase our current proposed spend and further increase our capital investments.
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Since the time that we became a publicly traded company in February 2021, we have sold 6,798,041 shares of Common Stock through our IPO, a December 2021 private issuance of public equity (“PIPE”) offering (the “2021 PIPE Offering”), a September 2023 rights offering, an October 2023 registered direct offering with pre-funded warrants and concurrent private placement (the “October 2023 Offering”) and a December 2023 registered direct offering and concurrent private placement (the “December 2023 Offering”), along with warrants to purchase (i) 106,400 shares of common stock at an initial exercise price of $12.00 per share issued to the underwriter in our IPO in February 2021 (the “IPO Warrants”), (ii) 1,169,288 shares of Common Stock at an initial exercise price of $17.50 per share in the 2021 PIPE Offering (the “PIPE Purchaser Warrants”) as well as representative warrants to purchase 46,722 shares of common stock at an exercise price of $17.50 per share (the “PIPE Representative Warrants” and together with the PIPE Purchaser Warrants the “PIPE Warrants”), (iii) 4,848,486 warrants to purchase shares of common stock at an exercise price of $1.65 per share (the “October 2023 Private Placement Warrants”) as well as placement agent warrants to purchase 169,697 shares of common stock at an exercise price of $2.0625 per share (the “October 2023 Placement Agent Warrants”) in the October 2023 Offering (collectively, the “October 2023 Warrants”), and (iv) 1,355,301 warrants to purchase shares of common stock at an exercise price of $1.62 per share (the “December 2023 Private Placement Warrants”) as well as placement agent warrants to purchase 94,871 shares of common stock at an exercise price of $2.1813 per share (the “December 2023 Placement Agent Warrants”) in the December 2023 Offering (collectively, the “December 2023 Warrants”).
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We intend to seek additional financing/capital raises/non-dilutive funding options to support these activities, and current cash projections may be impacted by these ramped up activities and any financing transactions entered into. There can be no assurance we will be able to attain future financing at terms favorable to us or at all. Operational Overview .
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The exercise price of the PIPE Purchaser Warrants were re-set in accordance with their terms upon announcement and in connection with the consummation of the September 2023 rights offering to $5.25 per share.
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Since the time that we became a publicly traded company in February 2021, we have sold 12,686,240 shares of Class A common stock through our IPO and subsequent follow-on public and private equity offerings and transactions.
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Selling and Marketing Expenses Selling and marketing expenses consist primarily of royalty and license fees associated with our agreements with the University of Miami, investor and public relations costs, as well as attending and sponsoring industry, investment, organization and medical conferences and events.
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Additionally, as of December 31, 2024, warrants exercisable for an aggregate of up to 6,802,668 shares of a Company's Class A common stock remain outstanding at exercise prices ranging from $2.35 per share to $175.00 per share.
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We expect that our general and administrative expenses will continue to be significant in the future as we increase our headcount to support increased administrative activities as a public company, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq and SEC requirements, director and officer insurance costs, and investor and public relations costs.
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By their nature, these estimates, judgments and assumptions are subject to an inherent degree of uncertainty, and management evaluates them on an ongoing basis for changes in facts and circumstances. Changes in estimates are recorded in the period in which they become known. Actual results may differ from our estimates under different assumptions or conditions.
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Other Income and Expenses Interest income consists of interest earned on cash equivalents and marketable securities. We expect our interest income to fluctuate due to changes in the current cash and marketable securities balances. Other income consists of funds earned that are not part of our normal operations.
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We recognize revenue associated with our contract manufacturing services, which may require us to exercise considerable judgment in estimating revenue to be recognized, including judgments made on day one accounting and judgments associated with the amount of revenue to be recognized over time as performance obligations are satisfied.
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In past years they have been primarily a result of tax refunds received for social security taxes as part of a research and development tax credit program. Income Taxes No provision for income taxes has been recorded for the years ended December 31, 2023, and 2022. We may incur income taxes in the future if we have earnings.
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Significant judgment is required to apply the authoritative accounting guidance at the outset of our contract manufacturing services agreement, and over time, as detailed below: Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require judgment.
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Grant revenue for the years ended December 31, 2023 and 2022 was less than $0.1 million and $0.3 million, respectively. The decrease of $0.2 million, or 85%, when compared to 2022, was primarily due to a reduction in grant funds available due in part to the completion of the grant-funded clinical trials.
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For our contract manufacturing services revenue, the contract generally includes the terms of the contract manufacturing services and related ancillary services or procedures to comply with regulatory requirements. We have determined, our performance obligations vary per contract and are accounted for as separate performance obligations when a product or services is delivered.
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The decrease of $0.3 million, or 25%, was primarily due to decreases in investor relations and international development expenses. Non-operating Lawsuit expense: Non-operating Lawsuit expense for the years ended December 31, 2023 and 2022 was less than $0.1 million and approximately $1.4 million, respectively. Additional detail can be found in Part I, Item 3 “Legal Proceedings” of this Form 10-K.
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If a product or service is determined not to be delivered as in the case of an initial down payment that amount is deferred and combined with another related performance obligation. If a contract contains a single performance obligation, we allocate the entire transaction price to the single performance obligation.
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Legal expenses incurred in ordinary business activities are reported within general and administrative expenses. Other tax credits: Other tax credits for each of the years ended December 31, 2023 and 2022 was less than $0.1 million and $0.3 million, respectively.
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If a contract contains multiple performance obligations, we allocate consideration to each performance obligation using the “relative standalone selling price”. Generally, we utilize observable standalone selling prices in our allocations of consideration.
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Other tax credits was greater in 2022 due to receiving the Employee Retention Credit under the CARES Act which encourages businesses to keep employees on their payroll. Eligible businesses receive a refundable tax credit of up to 50% of up to $10,000 in wages paid.
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If observable standalone selling prices are not available, we estimate the applicable standalone selling price using a cost-plus-margin approach or an adjusted market assessment approach, in each case, representing the amount that we believe the market is willing to pay for the applicable service or product.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk. We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. We held cash, cash equivalents and marketable securities of approximately $5.4 million as of December 31, 2023. We generally hold our cash in interest-bearing money market accounts.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk. We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. We held cash and cash equivalents of approximately $19.2 million as of December 31, 2024. We generally hold our cash in interest-bearing money market accounts.

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