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    SEC Form 10-Q filed by Clene Inc.

    5/7/25 8:03:14 AM ET
    $CLNN
    Biotechnology: Pharmaceutical Preparations
    Health Care
    Get the next $CLNN alert in real time by email
    clnn20250331_10q.htm
    0001822791 Clene Inc. false --12-31 Q1 2025 0.0001 0.0001 600,000,000 600,000,000 8,667,770 8,667,770 8,089,565 8,089,565 20 30 3 20 30 5 5 0 0 0 10 10 7 10 7 5 334 15,000 12 12 105.16 110.25 99.99 4.05 4.24 4.04 5.00 6.25 5.00 0 0 4.10 0.42 0.50 1.47 95.90 98.50 100.20 101.40 3.90 4.10 4.20 4.30 0.83 3.25 0.75 3.50 91.10 100.00 97.80 101.90 4.00 4.30 4.20 0.38 1.21 0.71 1.46 0.0001 1,000,000 0.0001 8,667,770 8,089,565 0 0 0 0 0.025 0 0 0.025 0 0 0 0 1 0 0 1 0 0 17,626 0 5 0 0 5 false false false false Represents 150,000 shares of Common Stock underlying the 2023 Avenue Warrant, issued pursuant to the Second Amendment (see Note 8). As of March 31, 2025 and December 31, 2024, the warrant had not been exercised. Represents 2,500,000 shares of Common Stock underlying the Tranche A Warrants to purchase one share of Common Stock, issued in our June 2023 public equity offering. The Tranche A Warrants expire on the earlier of (i) sixty (60) days following the date of our public announcement that an NDA for CNM-Au8 has been accepted by the FDA, or (ii) June 16, 2026. As of March 31, 2025 and December 31, 2024, no warrants had been exercised. Represents 2,500,000 shares of Common Stock underlying the Tranche B Warrants to purchase one share of Common Stock, issued in our June 2023 public equity offering. The Tranche B Warrants expire on the earlier of (i) sixty (60) days following the date of our public announcement that an NDA for CNM-Au8 has been approved by the FDA, or (ii) June 16, 2030. As of March 31, 2025 and December 31, 2024, no warrants had been exercised. Represents 1,546,914 shares of Common Stock underlying the 2024 Common Warrants to purchase one share of Common Stock, issued in our October 2024 public equity offering. As of March 31, 2025 and December 31, 2024, no warrants had been exercised. Represents 1,546,914 shares of Common Stock underlying the 2024 Common Warrants to purchase one share of Common Stock, issued in our October 2024 public equity offering. As of December 31, 2024, no warrants had been exercised. Includes expenses for travel, meals, dues, subscriptions, continuing education, and other miscellaneous expenses. Represents 424,358 shares of Common Stock underlying the 2024 Pre-Funded Warrants to purchase one share of Common Stock, issued in our October 2024 public equity offering. As of March 31, 2025 and December 31, 2024, 17,626 warrants had been exercised for nominal proceeds. Includes expenses for travel, meals, dues, subscriptions, continuing education, lobbying, banking fees, postage, and other office and miscellaneous expenses. Represents 1,229 shares of Common Stock underlying warrants to purchase one-fortieth (1/40) of one share of Common Stock, issued to the financial advisor and lead underwriter of Tottenham’s initial public offering upon their exercise of a unit purchase option in July 2021. As of March 31, 2025 and December 31, 2024, no warrants had been exercised. Represents 120,375 shares of Common Stock underlying warrants to purchase one-fortieth (1/40) of one share of Common Stock, issued during Tottenham’s initial public offering. We may redeem the outstanding warrants at $0.01 per warrant if the last sales price of our Common Stock equals or exceeds $330.00 per share for any 20 trading days within a 30-trading day period. 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    UNITED STATES

    SECURITIES AND EXCHANGE COMMISSION

    Washington, D.C. 20549


    FORM 10-Q


    (Mark One)

    ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

    For the quarterly period ended March 31, 2025

    or

    ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

    For the transition period from _____________ to _____________

    Commission file number: 001-39834


    CLENE INC.

    (Exact name of registrant as specified in its charter)


     

    Delaware

     

    85-2828339

    (State or other jurisdiction of
    incorporation or organization)

     

    (I.R.S. Employer
    Identification No.)

     

    6550 South Millrock Drive, Suite G50

    Salt Lake City, Utah

     

    84121

    (Address of principal executive offices)

     

    (Zip Code)

     

     (801) 676-9695 

    (Registrant’s telephone number, including area code)

     N/A 

    (Former name, former address, and former fiscal year, if changed since last report)

    Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

     

    Trading Symbol(s)

     

    Name of each exchange on which registered

    Common Stock, $0.0001 par value

     

    CLNN

     

    The Nasdaq Capital Market

    Warrants, to acquire one-fortieth of one share of Common Stock for $230.00 per share

     

    CLNNW

     

    The Nasdaq Capital Market

    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

    Large accelerated filer

    ☐

    Accelerated filer

    ☐

    Non-accelerated filer

    ☒

    Smaller reporting company

    ☒

      

    Emerging growth company

    ☐

    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

    The number of shares outstanding of the Registrant’s common stock as of May 5, 2025 was 8,982,747.

     

    Table of Contents
     
     

    CLENE INC.

    Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2025

     

    PART I—FINANCIAL INFORMATION

    1

     

    Item 1.

    Financial Statements (Unaudited)

    1

       

    Condensed Consolidated Balance Sheets

    1
       

    Condensed Consolidated Statements of Operations and Comprehensive Loss

    2
       

    Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

    3

       

    Condensed Consolidated Statements of Cash Flows

    4

       

    Notes to Condensed Consolidated Financial Statements

    5

     

    Item 2.

    Management’s Discussion and Analysis of Financial Condition and Results of Operations

    30

     

    Item 3.

    Quantitative and Qualitative Disclosures About Market Risk

    45

     

    Item 4.

    Controls and Procedures

    45

           

    PART II—OTHER INFORMATION

    47

     

    Item 1.

    Legal Proceedings

    47

     

    Item 1A.

    Risk Factors

    47

     

    Item 2.

    Unregistered Sales of Equity Securities and Use of Proceeds

    47

     

    Item 3.

    Defaults Upon Senior Securities

    47

     

    Item 4.

    Mine Safety Disclosures

    47

     

    Item 5.

    Other Information

    47

     

    Item 6.

    Exhibits

    48

     

    i

    Table of Contents
     
     

    PART I—FINANCIAL INFORMATION

     

    Item 1. Financial Statements

     

    CLENE INC.

    CONDENSED CONSOLIDATED BALANCE SHEETS

    (In thousands, except share and per share amounts)

    (Unaudited)

      

    March 31,

      

    December 31,

     
      

    2025

      

    2024

     

    ASSETS

            

    Current assets:

            

    Cash and cash equivalents

     $9,832  $12,155 

    Accounts receivable

      —   64 

    Inventory

      38   68 

    Prepaid expenses and other current assets

      4,801   3,870 

    Total current assets

      14,671   16,157 

    Restricted cash

      58   58 

    Operating lease right-of-use assets

      3,510   3,643 

    Property and equipment, net

      7,075   7,479 

    TOTAL ASSETS

     $25,314  $27,337 
             

    LIABILITIES AND STOCKHOLDERS’ DEFICIT

            

    Current liabilities:

            

    Accounts payable

     $1,413  $1,240 

    Accrued liabilities

      5,245   7,766 

    Operating lease obligations, current portion

      985   926 

    Notes payable, current portion

      3,121   359 

    Total current liabilities

      10,764   10,291 

    Operating lease obligations, net of current portion

      3,922   4,132 

    Notes payable, net of current portion

      1,943   4,610 

    Convertible notes payable

      10,970   10,816 

    Common stock warrant liabilities

      2,031   4,541 

    Derivative liabilities

      657   1,804 

    TOTAL LIABILITIES

      30,287   36,194 

    Commitments and contingencies (Note 9)

              

    Stockholders’ deficit:

            

    Common stock, $0.0001 par value: 600,000,000 shares authorized; 8,667,770 and 8,089,565 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

      1   1 

    Additional paid-in capital

      277,814   273,194 

    Accumulated deficit

      (282,874)  (282,123)

    Accumulated other comprehensive income

      86   71 

    TOTAL STOCKHOLDERS’ DEFICIT

      (4,973)  (8,857)

    TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

     $25,314  $27,337 

     

    See accompanying notes to the condensed consolidated financial statements.

     
    1

    Table of Contents
     

    CLENE INC.

    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

    (In thousands, except share and per share amounts)

    (Unaudited)

       

    Three Months Ended March 31,

     
       

    2025

       

    2024

     

    Revenue:

                   

    Product revenue

      $ 64     $ 44  

    Royalty revenue

        17       29  

    Total revenue

        81       73  

    Operating expenses:

                   

    Cost of revenue

        20       16  

    Research and development

        1,481       5,869  

    General and administrative

        2,656       3,420  

    Total operating expenses

        4,157       9,305  

    Loss from operations

        (4,076 )     (9,232 )

    Other income (expense), net:

                   

    Interest income

        81       359  

    Interest expense

        (608 )     (1,244 )

    Change in fair value of common stock warrant liabilities

        2,510       (1,309 )

    Change in fair value of derivative liabilities

        1,147       —  

    Change in fair value of Clene Nanomedicine contingent earn-out liability

        —       53  

    Change in fair value of Initial Stockholders contingent earn-out liability

        —       7  

    Research and development tax credits and unrestricted grants

        195       286  

    Total other income (expense), net

        3,325       (1,848 )

    Net loss before income taxes

        (751 )     (11,080 )

    Income tax expense

        —       —  

    Net loss

      $ (751 )   $ (11,080 )
                     

    Other comprehensive income (loss):

                   

    Unrealized loss on available-for-sale securities

      $ —     $ (4 )

    Foreign currency translation adjustments

        15       (55 )

    Total other comprehensive income (loss)

        15       (59 )

    Comprehensive loss

      $ (736 )   $ (11,139 )
                     

    Net loss per share – basic and diluted

      $ (0.09 )   $ (1.73 )

    Weighted average common shares used to compute basic and diluted net loss per share

        8,824,673       6,421,362  

     

    See accompanying notes to the condensed consolidated financial statements.

     

    2

    Table of Contents
     

    CLENE INC.

    CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

    (In thousands, except share amounts)

    (Unaudited

       

    Common Stock

       

    Additional Paid-In Capital

       

    Accumulated Deficit

       

    Accumulated Other Comprehensive Income (Loss)

       

    Total Stockholders’ Equity (Deficit)

     
       

    Shares

       

    Amount

                     

    Balances at December 31, 2024

        8,089,565     $ 1     $ 273,194     $ (282,123 )   $ 71     $ (8,857 )

    Issuance of common stock

        578,205       —       2,673       —       —       2,673  

    Stock-based compensation expense

        —       —       1,947       —       —       1,947  

    Foreign currency translation adjustment

        —       —       —       —       15       15  

    Net loss

        —       —       —       (751 )     —       (751 )

    Balances at March 31, 2025

        8,667,770     $ 1     $ 277,814     $ (282,874 )   $ 86     $ (4,973 )
                                                     

    Balances at December 31, 2023

        6,421,084       1       255,913       (242,723 )     199       13,390  

    Stock-based compensation expense

        —       —       2,013       —       —       2,013  

    Issuance of common stock upon vesting of restricted stock awards

        543       —       —       —       —       —  

    Unrealized loss on available-for-sale securities

        —       —       —       —       (4 )     (4 )

    Foreign currency translation adjustment

        —       —       —       —       (55 )     (55 )

    Net loss

        —       —       —       (11,080 )     —       (11,080 )

    Balances at March 31, 2024

        6,421,627     $ 1     $ 257,926     $ (253,803 )   $ 140     $ 4,264  

     

    See accompanying notes to the condensed consolidated financial statements.

     

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    CLENE INC.

    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

    (In thousands)

    (Unaudited)

       

    Three Months Ended March 31,

     
       

    2025

       

    2024

     

    Cash flows from operating activities:

                   

    Net loss

      $ (751 )   $ (11,080 )

    Adjustments to reconcile net loss to net cash used in operating activities:

                   

    Depreciation

        404       420  

    Non-cash lease expense

        133       122  

    Change in fair value of common stock warrant liabilities

        (2,510 )     1,309  

    Change in fair value of derivative liabilities

        (1,147 )     —  

    Change in fair value of Clene Nanomedicine contingent earn-out liability

        —       (53 )

    Change in fair value of Initial Stockholders contingent earn-out liability

        —       (7 )

    Stock-based compensation expense

        1,947       2,013  

    Accretion of debt discount

        237       367  

    Non-cash interest income on marketable securities

        —       (81 )

    Non-cash interest expense on notes payable

        12       91  

    Changes in operating assets and liabilities:

                   

    Accounts receivable

        64       79  

    Inventory

        30       —  

    Prepaid expenses and other current assets

        (931 )     (428 )

    Accounts payable

        173       141  

    Accrued liabilities

        (2,521 )     185  

    Operating lease obligations

        (151 )     (160 )

    Net cash used in operating activities

        (5,011 )     (7,082 )

    Cash flows from investing activities:

                   

    Purchases of marketable securities

        —       (6,168 )

    Proceeds from maturities of marketable securities

        —       6,250  

    Purchases of property and equipment

        —       (11 )

    Net cash provided by investing activities

        —       71  

    Cash flows from financing activities:

                   

    Proceeds from issuance of common stock, net of offering costs

        2,673       —  

    Payments of finance lease obligations

        —       (19 )

    Net cash provided by (used in) financing activities

        2,673       (19 )

    Effect of foreign exchange rate changes on cash and restricted cash

        15       (59 )

    Net decrease in cash, cash equivalents and restricted cash

        (2,323 )     (7,089 )

    Cash, cash equivalents and restricted cash – beginning of period

        12,213       28,879  

    Cash, cash equivalents and restricted cash – end of period

      $ 9,890     $ 21,790  
                     

    Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets:

                   

    Cash and cash equivalents

      $ 9,832     $ 21,732  

    Restricted cash

        58       58  

    Cash, cash equivalents and restricted cash

      $ 9,890     $ 21,790  
                     

    Supplemental cash flow information:

                   

    Cash paid for interest expense

      $ 359     $ 784  

     

    See accompanying notes to the condensed consolidated financial statements.

     

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    CLENE INC.

    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    (Unaudited)

     

    Note 1. Nature of the Business

     

    Clene Inc. (the “Company,” “we,” “us,” or similar such references) is a clinical-stage pharmaceutical company pioneering the discovery, development, and commercialization of novel clean-surfaced nanotechnology therapeutics. We have developed an electro-crystal-chemistry drug development platform that enables production of concentrated, stable, highly active, clean-surfaced nanocrystal suspensions. We have multiple drug assets currently in development for applications primarily in neurology. Our efforts are currently focused on addressing the high unmet medical needs in central nervous system disorders including amyotrophic lateral sclerosis (“ALS”), multiple sclerosis (“MS”), and Parkinson’s disease (“PD”). Our patented electro-crystal-chemistry manufacturing platform further enables us to develop very low concentration dietary supplements to advance the health and well-being of broad populations. These dietary supplements can vary greatly and include nanocrystals of varying composition, shapes and sizes as well as ionic solutions with diverse metallic constituents. Dietary supplements are marketed and distributed through our wholly owned subsidiary, dOrbital, Inc., or through an exclusive license with 4Life Research LLC (“4Life”), an international supplier of health supplements, stockholder, and related party (see Note 15).

     

    We became a public company on December 30, 2020 (the “Closing Date”) when we completed a reverse recapitalization (the “Reverse Recapitalization”) with Tottenham Acquisition I Limited (“Tottenham”), Tottenham’s wholly-owned subsidiary, Chelsea Worldwide Inc., and Creative Worldwide Inc., a wholly-owned subsidiary of Chelsea Worldwide Inc. On the Closing Date, Chelsea Worldwide Inc. changed its name to Clene Inc. and listed its shares of common stock, par value $0.0001 per share (“Common Stock”) on the Nasdaq Capital Market (“Nasdaq”) under the symbol “CLNN.”

     

    Going Concern

     

    We incurred a loss from operations of $4.1 million and $9.2 million for the three months ended March 31, 2025 and 2024, respectively. Our accumulated deficit was $282.9 million and $282.1 million as of March 31, 2025 and December 31, 2024, respectively. Our cash and cash equivalents totaled $9.8 million and $12.2 million as of March 31, 2025 and December 31, 2024, respectively, and net cash used in operating activities was $5.0 million and $7.1 million for the three months ended March 31, 2025 and 2024, respectively.

     

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

     

    To mitigate our funding needs, we plan to raise additional funding, including exploring equity financing and offerings, debt financing, licensing or collaboration arrangements with third parties, as well as utilizing our existing at-the-market facility and equity purchase agreement and potential proceeds from the exercise of outstanding warrants and stock options. These plans are subject to market conditions and reliance on third parties, and there is no assurance that effective implementation of our plans will result in the necessary funding to continue current operations. During the three months ended March 31, 2025, we generated $2.7 million of gross proceeds from our equity distribution agreement and subsequent to March 31, 2025, we generated $0.9 million of gross proceeds from our equity distribution agreement. We have implemented cost-saving initiatives, including delaying and reducing certain research and development programs and commercialization efforts and elimination of certain staff positions. We have concluded that our plans do not alleviate the substantial doubt about our ability to continue as a going concern beyond one year from the date the condensed consolidated financial statements are issued.

     

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    The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As a result, the accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amounts and classification of liabilities that may result should we be unable to continue as a going concern.

     

    Note 2. Summary of Significant Accounting Policies

     

    Basis of Presentation

     

    The accompanying condensed consolidated financial statements include the accounts of Clene Inc. and our wholly-owned subsidiaries, Clene Nanomedicine, Inc., a subsidiary incorporated in Delaware, Clene Australia Pty Ltd (“Clene Australia”), a subsidiary incorporated in Australia, Clene Netherlands B.V. (“Clene Netherlands”), a subsidiary incorporated in the Netherlands, and dOrbital, Inc., a subsidiary incorporated in Delaware, after elimination of all intercompany accounts and transactions. We have prepared the accompanying condensed consolidated financial statements in accordance with United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”) for interim financial reporting and as required by Regulation S-X, Rule 10-01. The condensed consolidated financial statements have been prepared on the same basis as our audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The financial data and other information disclosed in the condensed consolidated financial statements and related notes for the three months ended March 31, 2025 and 2024 are unaudited.

     

    Results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results for the entire fiscal year or any other period. The condensed consolidated financial statements for the three months ended March 31, 2025 and 2024 should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K.

     

    Reverse Stock Split

     

    Effective July 11, 2024 (the “Effective Date”), we filed a Certificate of Amendment to our Fourth Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, to effect a 1-for-20 reverse stock split (the “Reverse Stock Split”) of our Common Stock. Beginning with the opening of trading on the Effective Date, our Common Stock began trading on Nasdaq on a split-adjusted basis under the same symbol, “CLNN.” As a result of the Reverse Stock Split, every 20 shares of our Common Stock issued and outstanding were automatically combined and converted into 1 validly issued, fully paid and non-assessable share of Common Stock. In lieu of any fractional shares, stockholders received an amount in cash (without interest) equal to: (i) the number of shares of Common Stock held by such stockholder before the Reverse Stock Split that would otherwise have been exchanged for such fractional shares multiplied by (ii) the closing price of our Common Stock on Nasdaq on the trading day immediately preceding the Effective Date.

     

    The Reverse Stock Split did not reduce the total number of authorized shares of Common Stock or preferred stock, par value $0.0001 per share (“Preferred Stock”), or change the par values of the Company’s Common Stock or Preferred Stock. All outstanding stock options, warrants, rights to restricted stock awards, convertible debt, and contingent earn-out shares entitling their holders to purchase or receive shares of Common Stock were adjusted as a result of the Reverse Stock Split, in accordance with the terms of each such security. In addition, the number of shares reserved for issuance pursuant to our Amended 2020 Stock Plan was also appropriately adjusted. All historical share and per share data for the periods presented in these condensed consolidated financial statements, including for periods ending prior to July 11, 2024, has been adjusted to reflect the 1-for-20 Reverse Stock Split on a retroactive basis as if the Reverse Stock Split occurred as of the earliest period presented. As a result of the Reverse Stock Split, approximately $12,000 of par value was reclassified from Common Stock to Additional Paid-In Capital.

     

    Use of Estimates

     

    The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities, and the reported amounts of expenses. We base our estimates on historical experience and various other assumptions that we believe to be reasonable. Actual results may differ from those estimates or assumptions. Estimates are periodically reviewed in light of changes in circumstances, facts, and experience, and any changes in estimates will be recorded in future periods as they develop.

     

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    Risks and Uncertainties

     

    We are subject to certain risks and uncertainties and believe that changes in any of the following areas could have a material adverse effect on future financial condition, results of operations, or cash flows: ability to obtain additional financing; regulatory approval and market acceptance of, and reimbursement for, product candidates; performance of third-party contract research organizations (“CROs”) and manufacturers upon which we rely; protection of our intellectual property; litigation or claims against us based on intellectual property, patent, product, regulatory, or other factors; and our ability to attract and retain employees necessary to support our growth. The product candidates we develop require approvals from regulatory agencies prior to commercial sales. There can be no assurance that our current and future product candidates will receive the necessary approvals or be commercially successful. If we are denied approval or approval is delayed, it will have a material adverse impact on our business and our condensed consolidated financial statements.

     

    Concentrations of Credit Risk

     

    Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash. Our cash is held in financial institutions and amounts on deposit may at times exceed federally insured limits. We have not experienced any losses on our deposits of cash and do not believe that we are subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

     

    Cash and Cash Equivalents

     

    We consider all short-term investments with original maturities of 90 days or less when purchased to be cash equivalents.

     

    Restricted Cash

     

    We classify cash as restricted when it is unavailable for withdrawal or use in our general operating activities. Restricted cash is classified as current and noncurrent on the condensed consolidated balance sheets based on the nature of the restriction. Our restricted cash balance includes contractually restricted deposits related to our corporate credit card.

     

    Marketable Securities

     

    Marketable securities are investments with original maturities of more than 90 days when purchased. We do not invest in securities with original maturities of more than one year. Marketable debt securities are considered available-for-sale, and are recorded at fair value, with unrealized gains and losses included as a component of accumulated other comprehensive income until realized. Realized gains and losses are included in other income (expense), net, on the basis of specific identification. The cost of marketable securities is adjusted for amortization of premiums or accretion of discounts to maturity, and such amortization or accretion is included in other income (expense), net.

     

    Inventory

     

    Inventory is stated at historic cost on a first-in first-out basis. Our inventory consisted of $23,000 in raw materials and $15,000 in finished goods as of March 31, 2025, and $53,000 in raw material and $15,000 in finished goods as of December 31, 2024. Inventory relates to our dietary supplement products.

     

    Property and Equipment

     

    Property and equipment are stated at cost less accumulated depreciation. Property and equipment consist of laboratory and office equipment, computer software, and leasehold improvements. Depreciation is calculated using the straight-line method over the estimated economic useful lives of the assets, which are 3 to 5 years for laboratory equipment, 3 to 7 years for furniture and fixtures, and 2 to 5 years for computer software. Leasehold improvements are amortized over the lesser of the estimated lease term or the estimated useful life of the assets. Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated or amortized in accordance with the above useful lives once placed into service. Upon retirement or sale, the related cost and accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is included in the condensed consolidated statements of operations and comprehensive loss. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred.

     

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    We capitalize costs to obtain or develop computer software for internal use, including development costs incurred during the software development stage and costs to obtain software for access and conversion of historical data. We also capitalize costs to modify, upgrade, or enhance existing internal-use software that result in additional functionality. We expense costs incurred during the preliminary project stage, training costs, data conversion costs, and maintenance costs.

     

    Debt

     

    When debt is issued and a derivative is required to be separated (e.g., bifurcated conversion option) or another separate freestanding financial instrument (e.g., warrant) is issued, costs and fees incurred are allocated to the instruments issued (or bifurcated) in proportion to the allocation of proceeds. When some portions of the costs and fees relate to a bifurcated derivative or freestanding financial instrument that is being subsequently measured at fair value, those allocated costs are expensed immediately. Debt discounts, debt premiums, and debt issuance costs related to debt are recorded as deductions that net against the principal value of the debt and are amortized to interest expense over the contractual term of the debt using the effective interest method.

     

    In accordance with ASC 470-20, Debt with Conversion and Other Options, when we issue debt with warrants, we treat the warrants as a debt discount, recorded as a contra-liability against the debt, and amortize the balance over the life of the underlying debt as interest expense in the condensed consolidated statements of operations and comprehensive loss. The offset to the contra-liability is recorded as additional paid-in capital in the condensed consolidated balance sheets if the warrants are not treated as a derivative or liability under ASC 480, Distinguishing Liabilities from Equity (“ASC 480”). Otherwise, the offset to the contra-liability is recorded as a warrant liability in the condensed consolidated balance sheets and is subject to re-measurement to fair value at each balance sheet date, with any changes in fair value recognized in the condensed consolidated statements of operations and comprehensive loss. If the debt is retired early, the associated debt discount is then recognized immediately as interest expense in the condensed consolidated statements of operations and comprehensive loss.

     

    Convertible Debt

     

    In accordance with ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, when we issue notes with conversion features, we evaluate if the conversion feature is freestanding or embedded. If the conversion feature is embedded, we do not separate the conversion feature from the host contract for convertible notes that are not required to be accounted for as derivatives, or that do not result in substantial premiums accounted for as paid-in-capital. Consequently, we account for a convertible note as a single liability measured at its amortized cost as long as no other features require separation and recognition as derivatives. If the conversion feature is freestanding, or is embedded and meets the requirements to be separated, we account for the conversion feature as a derivative under ASC 815, Derivatives and Hedging (“ASC 815”). We record the derivative instrument at fair value at inception, and subsequently re-measure to fair value at each reporting period and immediately prior to the extinguishment of the derivative instrument, with any changes recorded in the condensed consolidated statements of operations and comprehensive loss.

     

    Leases

     

    At inception of a contract, we determine if a contract meets the definition of a lease. We determine if the contract conveys the right to control the use of an identified asset for a period of time. We assess throughout the period of use whether we have both of the following: (i) the right to obtain substantially all the economic benefits from use of the identified asset, and (ii) the right to direct the use of the identified asset. This determination is reassessed if the terms of the contract are changed. Leases are classified as operating or finance leases based on the terms of the lease agreement and certain characteristics of the identified asset. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments less any lease incentives received. At the lease commencement date, the discount rate implicit in the lease is used to discount the lease liability if readily determinable. If not readily determinable or leases do not contain an implicit rate, our incremental borrowing rate is used as the discount rate. Our policy is to not record leases with an original term of twelve months or less within the condensed consolidated balance sheets and we recognize lease expense for these short-term leases on a straight-line basis over the lease term.

     

    Certain lease agreements may require us to pay additional amounts for taxes, insurance, maintenance, and other expenses, which are generally referred to as non-lease components. Such variable non-lease components are treated as variable lease payments and recognized in the period in which the obligation for these payments is incurred. Variable lease components and variable non-lease components are not measured as part of the right-of-use asset and liability. Only when lease components and their associated non-lease components are fixed are they accounted for as a single lease component and are recognized as part of a right-of-use asset and liability. Total contract consideration is allocated to the fixed lease and non-lease component. This policy election applies consistently to all asset classes under lease agreements.

     

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    Leases may contain clauses for renewal at our option. Payments to be made in option periods are recognized as part of the right-of-use lease assets and lease liabilities when it is reasonably certain that the option to extend the lease will be exercised, or is not at our option. We determine whether the reasonably certain threshold is met by considering contract-, asset-, market-, and entity-based factors. Operating lease expense, which is recognized on a straight-line basis over the lease term, and the amortization of finance lease right-of-use assets, which are included in property and equipment and depreciated, are included in research and development or general and administrative expenses consistent with the leased assets’ primary use. Accretion on the liabilities for finance leases is included in interest expense.

     

    Contingent Earn-Out Liabilities

     

    In connection with the Reverse Recapitalization, certain Clene Nanomedicine stockholders are entitled to receive additional shares of Common Stock (the “Clene Nanomedicine Contingent Earn-out”) as follows: (i) 166,928 shares if (a) the volume-weighted average price (“VWAP”) of our Common Stock equals or exceeds $300.00 (the “Milestone 1 Price”) in any twenty trading days within a thirty trading day period within three years of the Reverse Recapitalization or (b) the change of control price equals or exceeds the Milestone 1 Price if a change of control transaction occurs within three years of the closing of the Reverse Recapitalization (the requirements in (a) and (b) collectively, “Milestone 1”); (ii) 125,200 shares if (a) the VWAP of our Common Stock equals or exceeds $400.00 (the “Milestone 2 Price”) in any twenty trading days within a thirty trading day period within five years of the closing of the Reverse Recapitalization or (b) the change of control price equals or exceeds the Milestone 2 Price if a change of control transaction occurs within five years of the Reverse Recapitalization (the requirements in (a) and (b) collectively, “Milestone 2”). If Milestone 1 is not achieved but Milestone 2 is achieved, the Clene Nanomedicine stockholders will receive additional shares equal to Milestone 1. Tottenham’s former officers, directors, sponsor, and public stockholders (the “Initial Stockholders”) are entitled to receive earn-out shares (the “Initial Stockholders Contingent Earn-out,” and collectively with the Clene Nanomedicine Contingent Earn-out, the “Contingent Earn-outs”) as follows: (i) 18,750 shares upon the achievement of Milestone 1; and (ii) 18,750 shares upon achievement of Milestone 2. Milestone 1 was not achieved but if Milestone 2 is achieved, the Initial Stockholders will receive additional shares equal to Milestone 1.

     

    In accordance with ASC 815, the Contingent Earn-outs are not indexed to our own stock and therefore were accounted for as a liability at the Reverse Recapitalization date and are subsequently remeasured to fair value at each reporting date with changes recorded as a component of other income (expense), net. As of March 31, 2025 and December 31, 2024, the Contingent Earn-outs had no value as determined using a Monte Carlo valuation model in order to simulate the future path of our stock price over the earn-out periods.

     

    Common Stock Warrants

     

    We account for common stock warrants as either equity- or liability-classified instruments based on an assessment of the warrant terms. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all the requirements for equity classification under ASC 815, including whether the warrants are indexed to our Common Stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and, for liability-classified warrants, at each reporting period end date while the warrants are outstanding.

     

    Grant Funding

     

    We may submit applications to receive grant funding from governmental and non-governmental entities. We account for grants by analogizing to the grant accounting model under IAS 20, Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”). We recognize grant funding without conditions or continuing performance obligations, including certain research and development tax credits, as other income in the condensed consolidated statements of operations and comprehensive loss. We accrue certain research and development tax credits receivable in other current assets (see Note 4) in an amount equal to the qualifying expenses incurred in each period multiplied by the applicable reimbursement percentage and we recognize other income in the condensed consolidated statements of operations and comprehensive loss. After submission of our tax returns, we receive a cash refund of certain research and development tax credits and relieve the receivable.

     

    We recognize grant funding with conditions or continuing performance obligations as a reduction in research and development or general and administrative expenses in the period during which the related qualifying expenses are incurred and as the conditions or performance obligations are fulfilled. Any amount received in advance of fulfilling such conditions or performance obligations is recorded in accrued liabilities (see Note 6) if the conditions or performance obligations are expected to be met within the next twelve months. We recognized grant funding as a reduction of research and development and general and administrative expenses totaling $4.3 million and $0.3 million during the three months ended March 31, 2025 and 2024, respectively.

     

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    In October 2023 we were awarded a grant (“the NIH Grant”) in collaboration with Columbia University, the prime awardee, and Synapticure, a neurology specialty health clinic, from the National Institutes of Health (“NIH”). The NIH Grant was awarded pursuant to the Accelerating Access to Critical Therapies for ALS Act to support up to a four-year Expanded Access Program (the “ACT-EAP”) for CNM-Au8® treatment of ALS. The NIH Grant totaled $45.1 million and subawards to us may total up to $30.9 million in aggregate and may extend to August 31, 2027. Subawards are awarded annually and subaward funds are paid to us as reimbursement for expenditures to support the ACT-EAP. Subawards for the first two years of the ACT-EAP totaled $7.3 million and $8.0 million, respectively. We recognized grant revenue totaling $4.3 million and $0 during the three months ended March 31, 2025 and 2024, respectively, which we recognized as a reduction of research and development and general and administrative expenses.

     

    Foreign Currency Translation and Transactions

     

    Our functional and reporting currency is the U.S. dollar (“USD”). Clene Australia and Clene Netherlands determined their functional currencies to be the Australian dollar and Euro, respectively. The results of our foreign currency operations are translated into USD at the average exchange rates during the period, assets and liabilities are translated using the exchange rate as of the balance sheet date, and stockholders’ deficit is translated using historical rates. Adjustments from the translation of the results of our foreign currency operations are excluded from net loss and are accumulated in a separate component of stockholders’ deficit. We also incur foreign exchange transaction gains and losses for purchases denominated in foreign currencies. Foreign exchange transaction gains and losses are included in other income (expense), net, as incurred.

     

    Comprehensive Loss

     

    Comprehensive loss includes net loss as well as other changes in stockholders’ deficit that result from transactions and economic events other than those with stockholders. The only elements of other comprehensive loss in any periods presented were the translation of foreign currency denominated balances of Clene Australia and Clene Netherlands to USD for consolidation and the unrealized loss on available-for-sale securities.

     

    Segment Information

     

    We report segment information based on ASC 280 Segment Reporting (“ASC 280”), which defines operating segments as components of a company that engage in activities from which it may recognize revenues and incur expenses, and for which operating results are regularly reviewed by the entity’s chief operating decision maker (“CODM”) to make decisions regarding resource allocation and assess performance, and for which discrete financial information is available. We determined that the Company is a single operating and reportable segment (“Products”) focused on treating central nervous system disorders through discovery, development, and commercialization of our novel CSN therapeutics. Our chief executive officer acts as the CODM and allocates resources and assesses performance at a consolidated level. Segment information is further described in Note 16.

     

    Income Taxes

     

    We account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the condensed consolidated financial statements or in our tax returns. Deferred tax assets and liabilities are determined based on the differences between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

     

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    We account for uncertainty in income taxes recognized in the condensed consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the condensed consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, which are considered appropriate as well as the related net interest and penalties.

     

    Stock-Based Compensation

     

    We account for stock-based compensation arrangements using a fair value-based method for costs related to all share-based payments including stock options and stock awards. Stock-based compensation expense is recorded in research and development and general and administrative expenses based on the classification of the work performed by the grantees. The fair value is recognized over the period during which a grantee is required to provide services in exchange for the option award and service-based stock awards, known as the requisite service period (usually the vesting period), on a straight-line basis. For stock awards with market conditions, the fair value is recognized over the period based on the expected milestone achievement dates as the derived service period (usually the vesting period), on a straight-line basis. For stock awards with performance conditions, the grant-date fair value of these awards is the market price on the applicable grant date, and compensation expense will be recognized when the conditions become probable of being satisfied. We recognize a cumulative true-up adjustment once the conditions become probable of being satisfied as the related service period had been completed in a prior period. We generally grant stock options with a four-year requisite service period. Certain stock options may vest based upon performance conditions instead of service conditions, such as the achievement of regulatory milestones or financial performance measures. For the grant-date fair value, we estimate the expected term of stock options with performance conditions based upon the nature of the conditions. If the expected term is not estimable and the achievement of performance conditions is not probable, we use the contractual term as the expected term. We elect to account for forfeitures as they occur, rather than estimating expected forfeitures. We determine the fair value of stock option awards using a Black-Scholes option pricing model based on the closing price of our Common Stock as reported by Nasdaq on the date of grant. The fair value of stock awards with market conditions are determined using a Monte Carlo valuation model.

     

    Recently Adopted Accounting Pronouncements

     

    In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires, among other things, that public entities with a single reportable segment provide all the disclosures required by ASC 280 and ASU 2023-07, and that public entities provide all annual disclosures about a reportable segment’s profit or loss and assets currently required in interim periods. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We adopted ASU 2023-07 as of December 31, 2024 and added the following disclosures (see Note 2 above and Note 16): (i) factors used to identify our reportable segment and the types of products and services from which our reportable segment derives its revenues, (ii) the measure of profit or loss and total assets for our reportable segment, (iii) the title and position of our CODM and how the CODM uses the measure of segment profit or loss in assessing performance and allocating resources, (iv) significant profit, loss, and non-cash items included within the segment measure of profit or loss, (v) significant expenses that are regularly provided to the CODM and included in the segment measure of profit or loss, (vi) an amount for other segment items and a description of its composition, (vii) total expenditures for additions to long-lived assets, (viii) reconciliations of segment measures to their consolidated totals, as applicable, and (iv) revenues from transactions with a single customer amounting to 10% or more of total revenues.

     

    Recent Accounting Pronouncements Not Yet Adopted

     

    In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires, among other things, that public entities on an annual basis disclose specific categories of the tax rate reconciliation, provide additional information for reconciling items that meet a quantitative threshold, and disclose income taxes paid disaggregated by jurisdiction. The guidance is effective for annual periods beginning after December 15, 2024. We are currently evaluating the impact of ASU 2023-09.

     

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    In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires that public entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. In January 2025, the FASB clarified the effective date of ASU 2024-03 with the issuance of ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of ASU 2024-03.

     

    Note 3. Cash, Cash Equivalents, and Marketable Securities

     

    Available-for-Sale Securities

     

    Available-for-sale securities as of March 31, 2025 were as follows:

     

      

    March 31, 2025

     

    (in thousands)

     

    Amortized Cost

      

    Gross Unrealized Gains

      

    Gross Unrealized Losses

      

    Fair Value

     

    Cash equivalents (contractual maturity within 90 days):

                    

    Money market funds

     $6,579  $—  $—  $6,579 

    Total cash equivalents

      6,579   —   —   6,579 

    Cash

      3,253   —   —   3,253 

    Total cash and cash equivalents

     $9,832  $—  $—  $9,832 

     

    Available-for-sale securities as of  December 31, 2024 were as follows:

     

      

    December 31, 2024

     

    (in thousands)

     

    Amortized Cost

      

    Gross Unrealized Gains

      

    Gross Unrealized Losses

      

    Fair Value

     

    Cash equivalents (contractual maturity within 90 days):

                    

    Money market funds

     $7,002  $—  $—  $7,002 

    Total cash equivalents

      7,002   —   —   7,002 

    Cash

      5,153   —   —   5,153 

    Total cash and cash equivalents

     $12,155  $—  $—  $12,155 

     

    We had no realized gains or losses from the sale of available-for-sale securities during the three months ended March 31, 2025 and 2024. As of March 31, 2025 and December 31, 2024, we did not have any allowance for credit losses or impairments of available-for-sale securities.

     

    Note 4. Prepaid Expenses and Other Current Assets

     

    Prepaid expenses and other current assets as of March 31, 2025 and December 31, 2024 were as follows:

     

       

    March 31,

       

    December 31,

     

    (in thousands)

     

    2025

       

    2024

     

    Metals to be used in research and development

      $ 1,971     $ 1,849  

    Grants receivable

        989       —  

    Prepaid clinical and CRO expenses

        973       1,557  

    Research and development tax credits receivable

        522       327  

    Other

        346       137  

    Total prepaid expenses and other current assets

      $ 4,801     $ 3,870  

     

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    Note 5. Property and Equipment, Net

     

    Property and equipment, net, as of March 31, 2025 and December 31, 2024 were as follows:

     

       

    March 31,

       

    December 31,

     

    (in thousands)

     

    2025

       

    2024

     

    Lab equipment

      $ 3,437     $ 3,437  

    Office equipment

        178       178  

    Computer software

        459       459  

    Leasehold improvements

        9,983       9,983  

    Construction in progress

        1,298       1,298  
          15,355       15,355  

    Less accumulated depreciation

        (8,280 )     (7,876 )

    Total property and equipment, net

      $ 7,075     $ 7,479  

     

    Depreciation expense recorded in research and development expense and general and administrative expense during the three months ended March 31, 2025 and 2024 was as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

     

    General and administrative

      $ 66     $ 66  

    Research and development

        338       354  

    Total depreciation expense

      $ 404     $ 420  
     

    Note 6. Accrued Liabilities

     

    Accrued liabilities as of March 31, 2025 and December 31, 2024 were as follows:

     

       

    March 31,

       

    December 31,

     

    (in thousands)

     

    2025

       

    2024

     

    Accrued compensation and benefits

      $ 4,093     $ 4,079  

    Deferred grants

        455       2,665  

    Accrued CRO and clinical fees

        503       771  

    Other

        194       251  

    Total accrued liabilities

      $ 5,245     $ 7,766  
     

    Note 7. Leases

     

    We lease laboratory and office space and certain laboratory equipment under non-cancellable operating leases. The carrying value of our right-of-use lease assets is substantially concentrated in our real estate leases, while the volume of lease agreements is primarily concentrated in equipment leases. We expect that, in the normal course of business, the existing leases will be renewed or replaced by similar leases.

     

    We have leases for three real estate properties: (i) a laboratory and manufacturing facility lease that commenced in September 2021 with a ten-year term and an option to extend for two five-year periods, (ii) a laboratory and manufacturing facility lease that commenced in February 2022 with a seven-year term and an option to extend for two five-year periods, and (iii) our corporate office lease that commenced a renewed term in April 2020 for seven years with an option to extend for five years. We did not recognize the payments to be made in the option periods as part of the right-of-use asset or lease liability because the exercise of the option is not reasonably certain.

     

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    As of March 31, 2025 and December 31, 2024, our operating lease obligations had a weighted-average discount rate of 9.6% and 9.6%, respectively, and a weighted-average remaining term of 5.2 years and 5.5 years, respectively.

     

    Maturity Analysis of Lease Obligations

     

    The maturity analysis of our operating lease obligations as of March 31, 2025 was as follows:

     

    (in thousands)

     

    Operating Leases

     

    2025 (remainder)

      $ 1,101  

    2026

        1,236  

    2027

        1,133  

    2028

        1,093  

    2029

        649  

    2030

        623  

    Thereafter

        422  

    Total minimum lease payments

        6,257  

    Less amount representing interest/discounting

        (1,350 )

    Present value of minimum lease payments

        4,907  

    Less lease obligations, current portion

        (985 )

    Lease obligations, net of current portion

      $ 3,922  

     

    Components of Lease Cost

     

    The components of lease costs for the three months ended March 31, 2025 and 2024 were as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

     

    Finance lease amortization

      $ —     $ 27  

    Operating lease costs

        253       254  

    Variable lease costs

        81       53  

    Total lease costs

      $ 334     $ 334  

     

    Supplemental Cash Flow Information

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

     

    Operating cash flows from operating leases

      $ (334 )   $ (307 )

    Financing cash flows from finance leases

      $ —     $ (19 )

     

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    Note 8. Notes Payable and Convertible Notes Payable

     

    Our notes payable and convertible notes payable as of March 31, 2025 and December 31, 2024 was as follows:

     

       

    Stated

       

    March 31,

       

    December 31,

     

    (in thousands, except interest rates)

     

    Interest Rate

       

    2025

       

    2024

     

    Notes payable:

                           

    Advance Cecil, Inc. (commenced April 2019)

        8.00 %   $ 148     $ 146  

    Maryland DHCD (commenced February 2019)

        8.00 %     744       734  

    Maryland DHCD (commenced May 2022)

        6.00 %     1,083       1,083  

    Senior Secured Promissory Notes (commenced December 2024)

        12.00 %     3,537       3,537  
                  5,512       5,500  

    Unamortized discount and debt issuance costs

                (448 )     (531 )

    Less notes payable, current portion, net of unamortized discount and debt issuance costs

                (3,121 )     (359 )

    Notes payable, net of current portion

              $ 1,943     $ 4,610  
                             

    Convertible notes payable:

                           

    Maryland DHCD (commenced December 2022)

        6.00 %   $ 5,312     $ 5,312  

    Senior Secured Convertible Promissory Notes (commenced December 2024)

        12.00 %     6,500       6,500  
                  11,812       11,812  

    Unamortized discount and debt issuance costs

                (842 )     (996 )

    Convertible notes payable

              $ 10,970     $ 10,816  

     

    Maryland Loans

     

    In April 2019, we entered into a term loan agreement (the “2019 Cecil Loan”) with Advance Cecil Inc., a non-stock corporation formed under the laws of the State of Maryland, for $0.1 million bearing simple interest at an annual rate of 8.00%. The 2019 Cecil Loan established “Phantom Shares” based on 1,199 shares of Common Stock. The 2019 Cecil Loan matures in full on April 30, 2034, with the repayment amount equal to the greater of (i) principal plus accrued interest or (ii) the Phantom Shares multiplied by the closing price of our Common Stock on Nasdaq on the trading day prior to the maturity date. As of March 31, 2025 and December 31, 2024, the 2019 Cecil Loan was recorded at principal plus accrued interest as it was greater than the value of the Phantom Shares. We recognized interest expense of $2,000 and $2,000 during the three months ended March 31, 2025 and 2024, respectively.

     

    In February 2019, we entered into a term loan agreement (the “2019 MD Loan”) with the Department of Housing and Community Development (“DHCD”), a principal department of the State of Maryland, for $0.5 million bearing simple interest at an annual rate of 8.00%. We are subject to covenants until maturity, including limitations on our ability to retire, repurchase, or redeem our stock, options, and warrants other than per the terms of the securities; and limitations on our ability to pay dividends. We are not in violation of any covenants. The 2019 MD Loan established “Phantom Shares” based on 5,995 shares of Common Stock. The 2019 MD Loan matures in full on February 22, 2034, with the repayment amount equal to the greater of (i) principal plus accrued interest or (ii) the Phantom Shares multiplied by the closing price of our Common Stock on Nasdaq on the trading day prior to the maturity date. As of  March 31, 2025 and  December 31, 2024, the 2019 MD Loan was recorded at principal plus accrued interest as it was greater than the value of the Phantom Shares. We recognized interest expense of $10,000 and $10,000 during the three months ended March 31, 2025 and 2024, respectively.

     

    In May 2022, we entered into a term loan agreement (the “2022 MD Loan”) with DHCD for up to $3.0 million bearing simple interest at an annual rate of 6.00% for the purchase of certain manufacturing equipment (the “Assets”). As of March 31, 2025, we had drawn $1.0 million and our ability to draw the remaining $2.0 million expired in May 2024. The first 12 payments, commencing July 1, 2022, are deferred, followed by 18 monthly installments of interest-only based on the outstanding principal, each up to $15,000 maximum; followed by monthly installments of principal and interest in the amount of $33,306, payable for the lesser of 30 months or until the principal and accrued and unpaid interest is fully repaid, with a balloon payment of all remaining principal and unpaid interest due on the maturity date of July 1, 2027. As of March 31, 2025 and December 31, 2024, the balance of accrued and unpaid interest was $50,000 and $50,000, respectively, and is recorded as part of the carrying amount of the loan. We recorded debt issuance costs of $31,000 as a debt discount. We recognized interest expense of $15,000 and $15,000 during the three months ended March 31, 2025 and 2024, respectively.

     

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    In December 2022, we entered into a term loan agreement (the “2022 DHCD Loan”) with DHCD for $5.0 million bearing simple interest at an annual rate of 6.00%. The first 12 payments, commencing January 1, 2023, are deferred, followed by 48 monthly installments of interest-only, with a balloon payment of all principal and unpaid interest due on the maturity date of January 1, 2028. As of March 31, 2025 and December 31, 2024, the balance of accrued and unpaid interest was $0.3 million and $0.3 million, respectively, and is recorded as part of the carrying amount of the loan. We recorded debt issuance costs of $0.1 million as a debt discount. At any time after December 8, 2023, DHCD may, in its sole discretion, convert up to $5.0 million of principal into Common Stock in increments of $1.0 million, at a price equal to the greater of: (i) 97% of the 30-day trailing VWAP of our Common Stock; or (ii) $80.00 per share (the “DHCD Conversion Feature”). The DHCD Conversion Feature did not meet the requirements for derivative accounting. During the three months ended March 31, 2025 and 2024, we recognized (i) total interest expense of $0.1 million and $0.1 million, respectively; (ii) coupon interest expense of $0.1 million and $0.1 million, respectively; and (iii) amortization of debt issuance costs of $3,000 and $3,000, respectively; and the effective interest rate was 5.99% and 5.99%, respectively.

     

    Avenue Loan

     

    In May 2021, we entered into a term loan agreement (the “2021 Avenue Loan”) with Avenue Venture Opportunities Fund, L.P. (“Avenue”) for up to $30.0 million, bearing interest at a variable rate equal to (i) the greater of (a) the prime rate or (b) 3.25%, plus (ii) 6.60%. We borrowed $15.0 million in May 2021 plus $5.0 million in September 2021 (“Tranche 1”), and the remaining $10.0 million (“Tranche 2”) was not drawn and expired. At inception, we incurred $0.8 million of debt issuance costs of which $47,000 related to liability-classified warrants was expensed immediately and the remainder was recorded as a debt discount. Payments were interest-only for the first 12 months and the interest-only period was extended for (i) 12 months due to our achievement of certain clinical trial milestones, plus (ii) an additional 12 months (through June 30, 2024), pursuant to an amendment in June 2023 (the “Second Amendment”), due to our receipt of at least $35.0 million from the sale and issuance of Common Stock in a public offering in June 2023 (“Equity Milestone 1”). Following the interest-only period, from July 2024 to September 2024, we made equal monthly principal installments of $3.3 million plus interest at the variable rate then in effect.

     

    On September 30, 2024, we entered into an amendment (the “Third Amendment”) that (i) reduced the October 2024 principal installment from $3.3 million to $2.0 million, plus interest at the applicable variable rate, (ii) reduced the November 2024 and December 2024 principal installments from $3.3 million to $0.5 million each, plus interest at the applicable variable rate, and (iii) delayed the maturity date of the loan from December 1, 2024 to April 1, 2025. However, we repaid the 2021 Avenue Loan in full on December 20, 2024 (the “Termination Date”) with the proceeds from the 2024 SSCP Notes (discussed below). The total repayment amount was approximately $7.9 million and included (i) the total outstanding balance of principal and accrued interest, (ii) a final payment of 4.25% of funded principal, equal to $0.9 million (the “Final Payment”), which was previously recorded as a debt premium at the inception of the 2021 Avenue Loan, and (iii) an early termination fee of 1% of the balance of outstanding principal. We recorded a loss on extinguishment of $0.2 million during the year ended December 31, 2024.

     

    We recognized interest expense of $1.1 million during the three months ended March 31, 2024. Avenue had the right to convert up to $5.0 million of principal into Common Stock (the “Avenue Conversion Feature”), which expired in May 2024 and was not exercised. For the convertible portion of the 2021 Avenue Loan, during the three months ended March 31, 2024, and prior to the expiration of the Avenue Conversion Feature in May 2024, we recognized (i) total interest expense of $0.3 million, (ii) coupon interest expense of $0.2 million, and (iii) amortization of debt discount and issuance costs of $0.1 million, and the effective interest rate was 22.79%.

     

    At the inception of the 2021 Avenue Loan, we issued a warrant to Avenue to purchase Common Stock (the “2021 Avenue Warrant”). A portion of the net proceeds at issuance of the 2021 Avenue Loan were allocated to the 2021 Avenue Warrant in an amount equal to its fair value of $1.5 million and were recorded as a debt discount. Pursuant to the Second Amendment, the 2021 Avenue Warrant was cancelled and a new warrant to purchase 150,000 shares of Common Stock was issued (the “2023 Avenue Warrant”). At issuance, the 2023 Avenue Warrant was recorded as a liability and debt discount in amount equal to its fair value of $0.7 million. The Second Amendment, including the revised terms, cancellation of the 2021 Avenue Warrant, and issuance of the 2023 Avenue Warrant was accounted for as a debt modification. Additionally, pursuant to the Third Amendment, the exercise price of the 2023 Avenue Warrant was reduced from $16.00 per share to $4.6014 per share, with the resulting change in fair value of $0.1 million recorded as a debt discount. The Third Amendment was accounted for as a debt modification that also met the requirements as a troubled debt restructuring under ASC 470, Debt (“ASC 470”), with no restructuring gain required to be recognized as the future cash payments under the 2021 Avenue Loan, as amended, were greater than its carrying amount.

     

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    Senior Secured Convertible Promissory Notes

     

    In December 2024, we entered into a note purchase agreement (the “Note Purchase Agreement”) pursuant to which we sold the 2024 SSCP Notes in a principal amount totaling $10.0 million and bearing interest at an annual rate of 12.00%. The 2024 SSCP Notes were sold to related parties, including: (i) an entity controlled by a member of our board of directors, (ii) 4Life, and (iii) an entity controlled by the chairman of 4Life who is also a board member of a subsidiary of Clene (collectively, the “Holders”). Pursuant to the Note Purchase Agreement, we first used the 2024 SSCP Note proceeds to satisfy our obligations under the 2021 Avenue Loan. The 2024 SSCP Notes expire on the earlier of (i) June 20, 2026 or (ii) upon a change in control transaction. Payments are interest-only for the first 12 months, followed by monthly principal installments totaling $1.0 million per month until the maturity date, upon which date the remaining principal and accrued and unpaid interest shall be due. We recorded debt issuance costs of $1.5 million as a debt discount. We recognized interest expense of $0.3 million during the three months ended March 31, 2025, and as of March 31, 2025 and December 31, 2024, the balance of accrued and unpaid interest was $37,000 and $37,000, respectively, and is recorded as part of the carrying amount of the notes.

     

    We are subject to covenants until maturity, including a requirement to maintain unrestricted cash and cash equivalents of at least $2.0 million. We are not in violation of any covenants. If certain events of default occur and are continuing, the Holders of a majority of the outstanding principal balance may accelerate all obligations under the 2024 SSCP Notes, plus a penalty equal to 10% of all outstanding principal and accrued and unpaid interest (the “SSCPN Default Feature”). The 2024 SSCP Notes are collateralized by substantially all our tangible and intangible property and rights (the “Collateral”). During the continuance of an event of default, if the Collateral is sold or otherwise disposed of and the proceeds thereof are insufficient to satisfy our obligations under the 2024 SSCP Notes, we shall be liable for any deficiency, together with additional interest thereon at the rate of 10% per annum (the “SSCPN Collateral Deficiency Fee”). We account SSCPN Collateral Deficiency Fee as a contingent liability (see Note 9).

     

    The Holders may, in their sole discretion, convert up to 65% of outstanding principal into the number of shares of our Common Stock equal to the outstanding principal to be converted divided by $5.668 (the “SSCPN Conversion Feature”). Notwithstanding, in the event a Holder declines to convert its pro rata share of outstanding principal, the remaining Holders may convert additional amounts, provided that no converted principal among all 2024 SSCP Notes exceeds $6.5 million. In the event of a change in control or any bankruptcy, liquidation, or other restructuring process, the Holders may, at their option, (i) convert up to 65% of outstanding principal into Common Stock, (ii) receive a cash payment equal to 115% of the outstanding principal, or (iii) any combination thereof, prior to such monetization event, before any security or claim junior to the 2024 SSCP Notes shall receive any proceeds from such monetization event (the “SSCPN Redemption Feature,” collectively with the SSCPN Conversion Feature and SSCPN Default Feature, the “SSCPN Derivative Liabilities”). The SSCPN Derivative Liabilities met the requirements to be separated as derivative instruments and measured at fair value (see Note 12). The issuance date fair value of the SSCPN Derivative Liabilities was $1.4 million and was recorded as a debt discount. For the convertible portion of the 2024 SSCP Notes, during the three months ended March 31, 2025, we recognized (i) total interest expense of $0.3 million, (ii) coupon interest expense of $0.2 million, and (iii) amortization of debt issuance costs of $0.2 million, and (iv) the effective interest rate was 24.65%.

     

    We are required to file and maintain an effective registration statement covering the resale of the shares underlying the SSCPN Conversion Feature or we shall pay the Holders a penalty equal to 2% of the face value of the 2024 SSCP Notes upon the occurrence of any such failure and for each 30-day period during which such failure is continuing (the “SSCPN Registration Fee”). The aggregate penalty will in no event exceed 10% of the face value of the 2024 SSCP Notes. We account for the SSCPN Registration Fee as a registration payment arrangement to be evaluated as a contingent liability (see Note 9).

     

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    Debt Maturities

     

    Future debt payments, net of unamortized discounts and debt issuance costs, and without giving effect to any potential future exercise of equity conversion features, are as follows:

     

    (in thousands)

     

    2019 MD Loan

       

    2019 Cecil Loan

       

    2022 MD Loan

       

    2022 DHCD Loan

       

    2024 SSCP Notes

       

    Total

     

    2025 (remainder)

      $ —     $ —     $ 347     $ —     $ —       347  

    2026

        —       —       369       —       10,000       10,369  

    2027

        —       —       317       —       —       317  

    2028

        —       —       —       5,000       —       5,000  

    2029

        —       —       —       —       —       —  

    2030

        —       —       —       —       —       —  

    Thereafter

        500       100       —       —       —       600  

    Total debt principal payments

        500       100       1,033       5,000       10,000       16,633  

    Accrued and unpaid interest

        244       48       50       312       37       691  

    Unamortized discount and debt issuance costs

        —       —       (14 )     (35 )     (1,241 )     (1,290 )

    Future debt payments, net

      $ 744     $ 148     $ 1,069     $ 5,277     $ 8,796     $ 16,034  
     

    Note 9. Commitments and Contingencies

     

    Commitments

     

    We enter into agreements in the normal course of business with CROs for clinical trials and with vendors for preclinical studies and other services and products for operating purposes, which are cancelable at any time by us, subject to payment of our remaining obligations under binding purchase orders and, in certain cases, nominal early termination fees. These commitments are not deemed significant.

     

    As of March 31, 2025 and December 31, 2024, we had commitments under various agreements for capital expenditures totaling $0.2 million and $0.2 million, respectively, related to the construction of our manufacturing facilities.

     

    Contingencies

     

    From time to time, we may have certain contingent legal liabilities that arise in the ordinary course of business activities. We accrue a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. We are not aware of any current material pending legal matters or claims.

     

    We received two grants from the National Multiple Sclerosis Society (“NMSS”): (i) $0.3 million in September 2019 (the “2019 Grant”) for our VISIONARY-MS clinical trial, and (ii) $0.7 million in May 2023 (the “2023 Grant”) for our REPAIR-MS clinical trial. Pursuant to the grants, if we make future commercial sales of CNM-Au8 for MS, we will repay: (i) 50% of the grants upon the first commercial sale, (ii) an additional 50% of the grants upon cumulative sales of $10.0 million, (iii) an additional 150% of the grants upon cumulative sales of $50.0 million, and (iv) an additional 200% of the grants upon cumulative sales of $100.0 million, with a maximum repayment of 450% of the grants if all milestones are achieved. If NMSS has not yet received aggregate repayments equal to 300% of the 2019 Grant or 150% of the 2023 Grant, then the following events will trigger repayment of 300% of the 2019 Grant, or $1.0 million, and 150% of the 2023 Grant, or $1.0 million, less any amounts previously paid: (i) sale of all or substantially all of our assets and business, (ii) sale of any portion of our assets and business including CNM-Au8 for MS treatment, (iii) exclusive licensing of our intellectual property claiming CNM-Au8 for MS treatment, (iv) a collaboration with a third-party to develop CNM-Au8 for MS treatment (2019 Grant only), or (v) licensing of our commercialization rights to CNM-Au8 for MS treatment (2023 Grant only). As of March 31, 2025, we have not met any of the above milestones. We account for these provisions in accordance with ASC 450, Contingencies. We assessed the likelihood of each event as less than probable and therefore no contingent liability is recognized. Our estimate of the possible range of loss is between the minimum and maximum repayment amounts, equal to 50% and 450% of each grant, or approximately $0.2 million and $1.5 million for the 2019 Grant, respectively; and approximately $0.3 million and $3.0 million for the 2023 Grant, respectively. However, it is at least reasonably possible that our estimate of the likelihood of each contingent event and the possible range of loss will change in the near term.

     

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    We account for the SSCPN Collateral Deficiency Fee and SSCPN Registration Fee (see Note 8) as contingent liabilities that were not probable as of March 31, 2025, and therefore no contingent liabilities were recorded. Our estimate of the possible range of loss for the SSCPN Registration Fee is between $0.2 million, which is equal to the loss upon initial failure to register the SSCPN Conversion Feature underlying shares, and $1.0 million, which is equal to the contractually-limited maximum loss upon continued failure to register the SSCPN Conversion Feature underlying shares. We are not able to estimate a possible range of loss for the SSCPN Collateral Deficiency Fee. It is at least reasonably possible that our estimate of the likelihood of each contingent event and the possible range of loss will change in the near term.

     

    Note 10. Income Taxes

     

    The components of loss before income taxes for the three months ended March 31, 2025 and 2024 were as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

     

    United States

      $ (701 )   $ (11,039 )

    Foreign

        (50 )     (41 )

    Net loss before income taxes

      $ (751 )   $ (11,080 )

     

    We are subject to taxation in the U.S., Australia, Netherlands, and various state jurisdictions. Our tax returns from 2018 to present are subject to examination by the U.S. and state authorities due to the carry forward of unutilized net operating losses and research and development credits. There are currently no pending examinations. We compute our quarterly income tax provision by using a forecasted annual effective tax rate and adjust for any discrete items arising during the quarter. The primary difference between the effective tax rate and the federal statutory tax rate relates to the full valuation allowance on our net operating losses and other deferred tax assets.

     

    Note 11. Benefit Plans

     

    401(k) Plan

     

    Our 401(k) plan is a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. We match 100% of a participating employee’s deferral contributions up to 3% of annual compensation, limited to $4,500 of matching contributions. Our contributions to the 401(k) plan totaled $0.1 million and $0.1 million during the three months ended March 31, 2025 and 2024, respectively.

     

    Stock Compensation Plans

     

    The Clene Nanomedicine, Inc. 2014 Stock Plan (the “2014 Plan”) was adopted in July 2014. Effective as of the closing of the Reverse Recapitalization, no additional awards may be granted under the 2014 Plan. As of March 31, 2025, 160,569 stock options remained outstanding under the 2014 Plan.

     

    The Clene Inc. 2020 Amended Stock Plan (the “2020 Plan”) was adopted in December 2020 and amended in May 2023 and May 2024. Currently, 2,420,000 shares of Common Stock are reserved for issuance thereunder. As of March 31, 2025, a total of 2,154,335 stock options and other stock awards had been granted under the 2020 Plan, and 265,665 shares remained available for future grant.

     

    Stock-Based Compensation Expense

     

    Stock-based compensation expense recorded in research and development expense and general and administrative expense during the three months ended March 31, 2025 and 2024 was as follows:

     

      

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

      

    2024

     

    General and administrative

     $1,001  $1,136 

    Research and development

      946   877 

    Total stock-based compensation expense

     $1,947  $2,013 

     

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    Stock-based compensation expense by award type during the three months ended March 31, 2025 and 2024 was as follows:

     

      

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

      

    2024

     

    Stock options

     $1,947  $2,002 

    Stock awards

      —   11 

    Total stock-based compensation expense

     $1,947  $2,013 

     

    Stock Options

     

    Outstanding stock options and related activity during the three months ended March 31, 2025 was as follows:

     

    (in thousands, except share, per share, and term data)

     

    Number of Options

      Weighted Average Exercise Price Per Share  Weighted Average Remaining Term (Years)  

    Intrinsic Value

     

    Outstanding – December 31, 2024

      1,944,252  $27.90   8.24  $59 

    Granted

      317,455   4.25   9.91   — 

    Forfeited

      (583)  37.92   —   — 

    Outstanding – March 31, 2025

      2,261,124  $24.58   8.27  $— 

    Vested and exercisable – March 31, 2025

      967,207  $43.48   7.15  $— 

    Vested, exercisable or expected to vest – March 31, 2025

      2,261,124  $24.58   8.27  $— 

     

    As of March 31, 2025 and December 31, 2024, we had approximately $7.5 million and $8.3 million, respectively, of unrecognized stock-based compensation costs related to unvested stock options that is expected to be recognized over a weighted-average period of 1.90 years and 1.70 years, respectively. Our unrecognized stock-based compensation costs excludes $2.8 million of stock options that vest based on performance conditions that we assessed as less than probable as of  March 31, 2025 and December 31, 2024.

     

    The weighted-average grant-date fair value of stock options granted during the three months ended March 31, 2025 and 2024 was $3.57 and $6.71, respectively. The assumptions used to calculate the fair value of stock options granted during the three months ended March 31, 2025 and 2024 were as follows:

     

      

    Three Months Ended March 31,

     
      

    2025

      

    2024

     

    Expected stock price volatility

      105.16% –110.25%  99.99%

    Risk-free interest rate

      4.05% –4.24%  4.04%

    Expected dividend yield

      0.00%  0.00%

    Expected term of options (in years)

      5.00 –6.25   5.00 

     

    Stock Awards

     

    Stock awards include rights to restricted stock awards with market-based vesting conditions and restricted stock units with service-based vesting conditions. We had no activity related to outstanding stock awards during the three months ended March 31, 2025. As of March 31, 2025, we had 37,441 unvested stock awards with a weighted average grant date fair value of $196.84. As of March 31, 2025 and  December 31, 2024, we had no unrecognized stock-based compensation cost related to unvested stock awards.

     

    Note 12. Fair Value

     

    Cash and cash equivalents are carried at fair value. Financial instruments, including accounts receivable, accounts payable, and accrued expenses are carried at cost, which approximates fair value given their short-term nature. Our remaining fair value measures are discussed below.

     

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    Financial Instruments with Fair Value Measurements on a Recurring Basis

     

    The fair value hierarchy for financial instruments measured at fair value on a recurring basis as of March 31, 2025 was as follows:

     

       

    March 31, 2025

     

    (in thousands)

     

    Level 1

       

    Level 2

       

    Level 3

       

    Total

     

    Cash equivalents:

                                   

    Money market funds

      $ 6,579     $ —     $ —     $ 6,579  

    Common stock warrant liabilities

        —       —       2,031       2,031  

    Derivative liabilities

        —       —       657       657  

     

    The fair value hierarchy for financial instruments measured at fair value on a recurring basis as of December 31, 2024 was as follows:

     

       

    December 31, 2024

     

    (in thousands)

     

    Level 1

       

    Level 2

       

    Level 3

       

    Total

     

    Cash equivalents:

                                   

    Money market funds

      $ 7,002     $ —     $ —     $ 7,002  

    Common stock warrant liabilities

        —       —       4,541       4,541  

    Derivative liabilities

        —       —       1,804       1,804  

     

    There were no transfers between Level 1, Level 2, or Level 3 during any of the periods above.

     

    Changes in the fair value of our Level 3 financial instruments during the three months ended March 31, 2025 were as follows:

     

    (in thousands)

     

    Common Stock Warrant Liabilities

       

    Derivative Liabilities

     

    Balance – December 31, 2024

      $ 4,541     $ 1,804  

    Change in fair value

        (2,510 )     (1,147 )

    Balance – March 31, 2025

      $ 2,031     $ 657  

     

    Changes in the fair value of our Level 3 financial instruments during the three months ended March 31, 2024 were as follows:

     

    (in thousands)

     

    Common Stock Warrant Liabilities

       

    Clene Nanomedicine Contingent Earn-out

       

    Initial Stockholders Contingent Earn-out

     

    Balance – December 31, 2023

      $ 1,481     $ 75     $ 10  

    Change in fair value

        1,309       (53 )     (7 )

    Balance – March 31, 2024

      $ 2,790     $ 22     $ 3  

     

    Valuation of Notes Payable and Convertible Notes Payable

     

    Our notes payable and convertible notes payable are categorized within Level 3 of the fair value hierarchy. The 2019 MD Loan and 2019 Cecil Loan are carried at the greater of principal plus accrued interest or the value of the Phantom Shares (see Note 8), which approximates fair value. The 2022 MD Loan and 2022 DHCD Loan are carried at amortized cost, which approximates fair value due to our credit risk and market interest rates.

     

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    The 2024 SSCP Notes are carried their amortized cost of $8.8 million and $8.6 million as of  March 31, 2025 and  December 31, 2024, respectively. As of  December 31, 2024, amortized cost approximated fair value but as of  March 31, 2025, amortized cost did not approximate fair value. The fair value, excluding the SSCPN Derivative Liabilities, was approximately $7.8 million. The SSCPN Derivative Liabilities met the requirements to be separated from the 2024 SSCP Notes as derivative instruments measured at fair value. We estimate the fair value of the 2024 SSCP Notes with and without the SSCPN Derivative Liabilities and calculate the difference as the implied fair value of the SSCPN Derivative Liabilities. The valuation model consists of a discounted cash flow model and a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) a change of control transaction, (ii) dissolution of the Company, or (iii) another outcome outside of (i)-(ii). These estimates require significant judgment. The carrying amount may fluctuate significantly and the actual settlement amount may be materially different from the estimated fair value. The unobservable valuation inputs were as follows:

     

      

    March 31,

      

    December 31,

     
      

    2025

      

    2024

     

    Expected stock price volatility

      91.20%  101.50%

    Risk-free interest rate

      4.00% –4.10%  4.20%

    Expected dividend yield

      0.00%  0.00%

    Expected term (in years)

      0.42 –1.22   0.50 –1.47 

    Probability of change of control

      10.00%  10.00%

    Probability of dissolution

      45.00%  45.00%

    Probability of other outcome

      45.00%  45.00%

     

    Valuation of the Common Stock Warrant Liabilities

     

    The 2023 Avenue Warrant, as amended, is classified as a liability and carried at fair value. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) settlement of the instrument upon a change of control transaction, (ii) dissolution of the Company, or (iii) another outcome outside of (i)-(ii). These estimates require significant judgment. The carrying amount may fluctuate significantly and the actual settlement amount  may be materially different from the estimated fair value. The unobservable valuation inputs were as follows:

     

      

    March 31,

      

    December 31,

     
      

    2025

      

    2024

     

    Expected stock price volatility

      95.90% –98.50%  100.20% –101.40%

    Risk-free interest rate

      3.90% –4.10%  4.20% –4.30%

    Expected dividend yield

      0.00%  0.00%

    Expected term (in years)

      0.83 –3.25   0.75 –3.50 

    Probability of change of control

      10.00%  10.00%

    Probability of dissolution

      45.00%  45.00%

    Probability of other outcome

      45.00%  45.00%

     

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    The Tranche A Warrants are classified as a liability and carried at fair value. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) acceptance of a new drug application (“NDA”) by the U.S. Food and Drug Administration (“FDA”) for CNM-Au8, (ii) settlement upon a fundamental transaction, (iii) dissolution of the Company, and (iv) another outcome outside of (i)-(iii). These estimates require significant judgment. The carrying amount may fluctuate significantly and the actual settlement amount may be materially different from the estimated fair value. The unobservable valuation inputs were as follows:

     

      

    March 31,

      

    December 31,

     
      

    2025

      

    2024

     

    Expected stock price volatility

      91.10% –100.00%  97.80% –101.90%

    Risk-free interest rate

      4.00% –4.30%  4.20%

    Expected dividend yield

      0.00%  0.00%

    Expected term (in years)

      0.38 –1.21   0.71 –1.46 

    Probability of NDA acceptance

      20.00%  20.00%

    Probability of fundamental transaction

      10.00%  10.00%

    Probability of dissolution

      45.00%  45.00%

    Probability of other outcome

      25.00%  25.00%

     

    The 2024 Common Warrants are classified as a liability and carried at fair value. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) dissolution of the Company and (ii) another outcome outside of dissolution. These estimates require significant judgment. The carrying amount  may fluctuate significantly and the actual settlement amount  may be materially different from the estimated fair value. The unobservable valuation inputs were as follows:

     

       

    March 31,

       

    December 31,

     
       

    2025

       

    2024

     

    Expected stock price volatility

        105.00 %     107.50 %

    Risk-free interest rate

        3.90 %     4.40 %

    Expected dividend yield

        0.00 %     0.00 %

    Expected term (in years)

        4.50       4.75  

    Probability of dissolution

        45.00 %     45.00 %

    Probability of other outcome

        55.00 %     55.00 %
     

    Note 13. Capital Stock

     

    As of March 31, 2025 and December 31, 2024, our amended and restated certificate of incorporation authorized us to issue 600,000,000 shares of Common Stock, par value $0.0001 per share; and 1,000,000 shares of Preferred Stock, par value $0.0001 per share. As of March 31, 2025 and December 31, 2024, we had 8,667,770 and 8,089,565 shares of Common Stock issued and outstanding, respectively, and no shares of Preferred Stock issued or outstanding.

     

    Our common stockholders are entitled to one vote per share and to notice of any stockholders’ meeting. Voting, dividend, and liquidation rights of the holders of Common Stock are subject to the prior rights of holders of all classes of stock and are qualified by the rights, powers, preferences, and privileges of the holders of Preferred Stock. No distributions shall be made with respect to Common Stock until all declared dividends to Preferred Stock have been paid or set aside for payment. Common Stock is not redeemable at the option of the holder.

     

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    Common Stock Warrants

     

    We have issued the following outstanding warrants and pre-funded warrants to purchase shares of Common Stock:

     

               

    Number of Shares Issuable

     
               

    March 31,

      

    December 31,

     

    Date Exercisable

     

    Exercise Price

     

    Expiration

       

    Classification

     

    2025

      

    2024

     

    December 2020

     $230.00 

    December 2025

     (1) 

    Equity

      120,375   120,375 

    December 2020

     $230.00 

    December 2025

     (2) 

    Equity

      1,229   1,229 

    June 2023

     $4.6014 

    June 2028

     (3) 

    Liability

      150,000   150,000 

    June 2023

     $22.00 

    June 2026

     (4) 

    Liability

      2,500,000   2,500,000 

    June 2023

     $30.00 

    June 2030

     (5) 

    Equity

      2,500,000   2,500,000 

    October 2024

     $0.001 

    None

     (6) 

    Equity

      424,358   424,358 

    October 2024

     $4.82 

    October 2029

     (7) 

    Liability

      1,546,914   1,546,914 

    Total shares

               7,242,876   7,242,876 

    (1)

    Represents 120,375 shares of Common Stock underlying warrants to purchase one-fortieth (1/40) of one share of Common Stock, issued during Tottenham’s initial public offering. We may redeem the outstanding warrants at $0.01 per warrant if the last sales price of our Common Stock equals or exceeds $330.00 per share for any 20 trading days within a 30-trading day period. As of March 31, 2025 and December 31, 2024, no warrants had been exercised.

     

    (2)

    Represents 1,229 shares of Common Stock underlying warrants to purchase one-fortieth (1/40) of one share of Common Stock, issued to the financial advisor and lead underwriter of Tottenham’s initial public offering upon their exercise of a unit purchase option in July 2021. As of March 31, 2025 and December 31, 2024, no warrants had been exercised.

     

    (3)

    Represents 150,000 shares of Common Stock underlying the 2023 Avenue Warrant, issued pursuant to the Second Amendment (see Note 8). As of March 31, 2025 and December 31, 2024, the warrant had not been exercised.

     

    (4)

    Represents 2,500,000 shares of Common Stock underlying the Tranche A Warrants to purchase one share of Common Stock, issued in our June 2023 public equity offering. The Tranche A Warrants expire on the earlier of (i) sixty (60) days following the date of our public announcement that an NDA for CNM-Au8 has been accepted by the FDA, or (ii) June 16, 2026. As of March 31, 2025 and December 31, 2024, no warrants had been exercised.

     

    (5)

    Represents 2,500,000 shares of Common Stock underlying the Tranche B Warrants to purchase one share of Common Stock, issued in our June 2023 public equity offering. The Tranche B Warrants expire on the earlier of (i) sixty (60) days following the date of our public announcement that an NDA for CNM-Au8 has been approved by the FDA, or (ii) June 16, 2030. As of March 31, 2025 and December 31, 2024, no warrants had been exercised.

     

    (6)

    Represents 424,358 shares of Common Stock underlying the 2024 Pre-Funded Warrants to purchase one share of Common Stock, issued in our October 2024 public equity offering. As of March 31, 2025 and December 31, 2024, 17,626 warrants had been exercised for nominal proceeds.

     

    (7)

    Represents 1,546,914 shares of Common Stock underlying the 2024 Common Warrants to purchase one share of Common Stock, issued in our October 2024 public equity offering. As of March 31, 2025 and December 31, 2024, no warrants had been exercised.

     

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    Public Offerings

     

    In October 2024, pursuant to a placement agency agreement with Canaccord Genuity LLC (“Canaccord”), we sold 725,000 shares of Common Stock and pre-funded warrants to purchase up to 17,626 shares of Common Stock (the “2024 Pre-Funded Warrants”). The aggregate gross proceeds were approximately $3.5 million, excluding the proceeds, of any, from the exercise of the pre-funded warrants and before deducting placement agent fees and expenses and other expenses payable by us. We paid Canaccord a placement agent fee of 6.00% of the aggregate gross proceeds of the offering. The offering was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective on April 26, 2022, and a related prospectus supplement. Additionally, in separate, concurrent private placements, we also sold 379,930 shares of Common Stock, 2024 Pre-Funded Warrants to purchase up to 424,358 shares of Common Stock, and warrants to purchase up to 1,546,914 shares of Common Stock (the “2024 Common Warrants”). The aggregate gross proceeds from the private placements were approximately $3.8 million, of which $1.3 million was contributed by certain of our directors, executive officers and their affiliated entities, and excludes the proceeds, if any, from the exercise of the 2024 Pre-Funded Warrants and 2024 Common Warrants. The 2024 Pre-Funded Warrants were exercisable immediately at a price of $0.001 per share and expire when exercised in full. The 2024 Common Warrants were exercisable immediately at a price of $4.82 per share and expire five years from issuance. The total fair value of the Common Stock, 2024 Pre-Funded Warrants, and 2024 Common Warrants sold in the offerings exceeded the offering proceeds by $2.1 million, therefore pursuant to ASC 815, we recognized this amount as a loss on the initial issuance of equity during the year ended December 31, 2024. The placement agent fees and offering expenses were allocated to the Common Stock, 2024 Pre-Funded Warrants, and 2024 Common Warrants sold in the offering based on their relative fair values, with the amount allocated to the liability-classified 2024 Common Warrants recorded as an expense and the amounts allocated to the Common Stock and 2024 Pre-Funded Warrants as a reduction to their initial carrying values.

     

    Common Stock Sales Agreement

     

    In April 2022, we entered into the an equity distribution agreement (the “2022 ATM Agreement”), which we amended in December 2022. Canaccord acts as placement agent and we may offer and sell shares of Common Stock from time to time through Canaccord. The issuance and sale of Common Stock by us under the 2022 ATM Agreement was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective by the SEC on April 26, 2022, and a related prospectus supplement, which expired on April 26, 2025.

     

    Pursuant to the 2022 ATM Agreement, Canaccord is not required to sell any specific number or dollar amount of Common Stock but will act as our placement agent to sell, on our behalf, all of the Common Stock requested by us to be sold, consistent with Canaccord’s normal trading and sales practices, on terms mutually agreed between Canaccord and us, for a fixed commission from each sale of Common Stock, if any. During the three months ended March 31, 2025, we sold 578,205 shares of Common Stock, generated gross proceeds of $2.7 million, and paid commissions of $0.1 million. We did not effect any sales during any of the other periods presented herein.

     

    Common Stock Purchase Agreement

     

    On March 3, 2023, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase up to $25.0 million of shares of Common Stock at our sole discretion and subject to certain daily limitations based on our prior day purchase history and the volume and closing price of our Common Stock on Nasdaq, from time to time over a 36-month period commencing on March 7, 2023. The issuance and sale of Common Stock under the Purchase Agreement is made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective by the SEC on April 26, 2022. On June 16, 2023, we suspended and terminated the prospectus supplement related to the offering with respect to the unsold shares of Common Stock issuable pursuant to the Purchase Agreement. We will not make any further sales of our securities pursuant to the Purchase Agreement, unless and until a new prospectus supplement is filed. Other than the termination of the prospectus supplement related to the offering with respect to future sales by us, the Purchase Agreement remains in full force and effect.

     

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    On the date of the Purchase Agreement, we issued 16,633 shares of Common Stock (the “Initial Commitment Shares”) to Lincoln Park as an initial fee for its commitment under the Purchase Agreement. We recorded the fair value of the Initial Commitment Shares on the date of issuance in other income (expense), net. We may further issue up to 8,317 additional shares of Common Stock (the “Additional Commitment Shares,” and, together with the Initial Commitment Shares, the “Commitment Shares”) on a pro rata basis upon each purchase by Lincoln Park under the Purchase Agreement. Under applicable Nasdaq listing rules, the total number of shares of Common Stock that we may sell to Lincoln Park is limited to 765,506 shares (including the Commitment Shares), representing 19.99% of the outstanding shares of our Common Stock immediately prior to the execution of the Purchase Agreement, unless we (i) first obtain stockholder approval in accordance with applicable Nasdaq listing rules or (ii) the average price paid by Lincoln Park for all shares of Common Stock issued by us under the Purchase Agreement is equal to or greater than $24.8080. The Purchase Agreement prohibits us from directing Lincoln Park to purchase any shares of Common Stock that would result in Lincoln Park having beneficial ownership of greater than 4.99% of our outstanding Common Stock, which Lincoln Park may, in its sole discretion, increase up to 9.99% of our outstanding Common Stock by delivering written notice thereof to us, which shall not be effective until the 61st day after such written notice is delivered to us. We may terminate the Purchase Agreement at any time, for any reason and without any payment or liability to us, by giving Lincoln Park a termination notice with effect one business date after the notice has been received by Lincoln Park.

     

    We evaluated the Purchase Agreement under ASC 815-40 Derivatives and Hedging—Contracts on an Entity's Own Equity as it represents the right to require Lincoln Park to purchase shares of Common Stock in the future, similar to a put option. We concluded it represents a freestanding derivative instrument that does not qualify for equity classification and therefore requires fair value accounting. We analyzed the terms of the contract and concluded the derivative instrument has no value as of March 31, 2025 and  December 31, 2024. We did not effect any sales during the periods presented herein.

     

    Note 14. Net Loss Per Share

     

    The computation of basic and diluted net loss per share attributable to common stockholders for the three months ended March 31, 2025 and 2024 was as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands, except share and per share data)

     

    2025

       

    2024

     

    Numerator:

                   

    Net loss attributable to common stockholders

      $ (751 )   $ (11,080 )

    Denominator:

                   

    Weighted average common shares outstanding

        8,824,673       6,421,362  

    Net loss per share attributable to common stockholders – basic and diluted

      $ (0.09 )   $ (1.73 )

     

    The following shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the three months ended March 31, 2025 and 2024 because they were antidilutive, out-of-the-money, or the issuance of such shares is contingent upon certain conditions which were not satisfied by the end of the period:

     

       

    Three Months Ended March 31,

     
       

    2025

       

    2024

     

    Convertible notes payable (see Note 8)

        1,209,289       86,635  

    Common stock warrants (see Note 13)

        6,818,518       5,271,604  

    Options to purchase common stock (see Note 11)

        2,261,124       1,099,277  

    Unvested restricted stock awards (see Note 11)

        37,441       38,400  

    Contingent earn-out shares (see Note 2)

        329,628       329,628  

    Total shares excluded from diluted net loss per share

        10,656,000       6,825,544  

     

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    Note 15. Related Party Transactions

     

    Supply and License Agreements

     

    In August 2018, we entered into an exclusive supply agreement (the “Supply Agreement”) and license agreement (the “License Agreement”) in conjunction with 4Life’s investment in the Series C preferred stock and warrants of our predecessor. On April 25, 2024, we entered into an amendment to the Supply Agreement and License Agreement (the “Amended 4Life Agreements”). The Amended 4Life Agreements contain the following terms:

     

     

    ●

    Supply Agreement.  We granted 4Life, or its affiliates and mutually-agreed upon manufacturing vendors (the “Buyer Purchasing Parties”) an exclusive right to purchase certain of our dietary supplement and non-pharmaceutical products (the “Licensed Products”), and we shall exclusively sell the Licensed Products to the Buyer Purchasing Parties. The purchase price of Licensed Products shall be equal to our cost plus 20%. 4Life must sell certain amounts of Licensed Products for the calendar years beginning in 2024 and extending through 2033 (the “Minimum Sales Commitment”), with Minimum Sales Commitments for years subsequent to 2033, if applicable, to be negotiated between the Company and 4Life. The Company may permanently convert 4Life’s exclusive rights to purchase Licensed Products to non-exclusive rights if: (i) 4Life fails to achieve the Minimum Sales Commitment for any two consecutive years, and (ii) 4Life fails to pay additional royalty fees to maintain exclusivity (as set forth under “License Agreement” below) (the “Exclusivity Provision”).

     

     

    ●

    License Agreement.  We granted 4Life an exclusive, royalty bearing license to use, sell, and commercialize the Licensed Products. On a quarterly basis, 4Life shall pay us a royalty rate of 3% of incremental sales of Licensed Products, which is equal to the lesser of (a) the increase in net sales for the quarter over a base period quarter as determined in the License Agreement, or (b) net sales. If 4Life fails to meet the Exclusivity Provision, 4Life may continue to maintain exclusivity by paying us the difference between (a) the royalty fee that would otherwise have been earned by us if 4Life had met the Minimum Sales Commitment and (b) actual royalties paid to us. However, notwithstanding any other provisions of the License Agreement, on or after January 1, 2027, we shall be permitted to sell Licensed Products through third party retail outlets or via our own websites. The term of the License Agreement will continue until December 31, 2033, unless earlier terminated pursuant to the License Agreement or Supply Agreement. The Amended 4Life Agreements will be renewable for additional five-year terms upon mutual agreement of the parties.

     

    We currently provide, on a non-exclusive basis, an aqueous zinc-silver ion dietary (mineral) supplement to 4Life, which is sold under the trade name Zinc Factor™, and an aqueous gold dietary (mineral) supplement of very low-concentration gold nanoparticles, that is sold by 4Life, on an exclusive basis, under the trade name Gold Factor™ and is subject to royalties. Total revenue under the Supply and License Agreements during the three months ended March 31, 2025 and 2024 was as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

     

    Product revenue from related parties

      $ 63     $ 43  

    Royalty revenue from related parties

        17       29  

    Total revenue from related parties

      $ 80     $ 72  
     

    Note 16. Geographic and Segment Information

     

    Geographic Information

     

    All of our long-lived assets, composed of property and equipment, net by location, were held in the U.S. as of March 31, 2025 and  December 31, 2024. All of our revenues from external customers were generated in the U.S. during the three months ended March 31, 2025 and 2024.

     

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    Segment Information

     

    Our Products segment measures of profit and loss is consolidated loss from operations, and its measure of total assets is consolidated total assets. Our CODM uses loss from operations predominantly in the annual budget and forecasting process to monitor variances in budget versus actual results along with consolidated total assets to determine resource allocation. Segment revenues from external customers, significant segment non-cash items, and other significant segment expense categories included within the measure of profit and loss and provided to our CODM were all based on their consolidated amounts. During the three months ended March 31, 2025 and 2024, these items were as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

     

    Segment revenue from external customers

      $ 81     $ 73  

    Segment operating expenses:

                   

    Cost of revenue

        20       16  

    Research and development:

                   

    CNM-Au8:

                   

    Amyotrophic lateral sclerosis

        1,343       770  

    Multiple sclerosis

        25       92  

    Regulatory activities

        130       340  

    General/pre-clinical/non-clinical

        63       128  

    CNM-ZnAg

        —       13  

    Facilities

        419       381  

    Depreciation

        338       354  

    Manufacturing

        83       239  

    Research

        5       175  

    Equipment

        14       29  

    Maintenance

        32       20  

    Information technology

        65       37  

    Personnel

        2,160       2,664  

    Stock-based compensation

        946       877  

    Grant revenue as a reduction of research and development expense

        (4,167 )     (279 )

    Other segment items ‒ Research and development(1)

        25       29  

    General and administrative:

                   

    Insurance

        181       186  

    Legal

        148       75  

    Finance and accounting

        310       249  

    Public and investor relations

        111       234  

    Facilities

        30       32  

    Depreciation

        66       66  

    Information technology

        49       79  

    Personnel

        832       1,096  

    Stock-based compensation

        1,001       1,136  

    Grant revenue as a reduction of general and administrative expense

        (163 )     —  

    Other segment items ‒ General and administrative(2)

        91       267  

    Segment income (loss) from operations

        (4,076 )     (9,232 )
                     

    Reconciliation of segment loss from operations:

                   

    Adjustments and reconciling items

        —       —  

    Consolidated loss from operations

      $ (4,076 )   $ (9,232 )

    (1)

    Includes expenses for travel, meals, dues, subscriptions, continuing education, and other miscellaneous expenses.

    (2) Includes expenses for travel, meals, dues, subscriptions, continuing education, lobbying, banking fees, postage, and other office and miscellaneous expenses.

     

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    Our revenues during the three months ended March 31, 2025 and 2024 were predominantly with a single customer, 4Life, through our License and Supply Agreements (see Note 15). A reconciliation of the total of the Products segment loss from operations to consolidated net loss before income taxes for the three months ended March 31, 2025 and 2024 was as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

     

    Segment loss from operations

      $ (4,076 )   $ (9,232 )

    Total other income (expense), net(1)

        3,325       (1,848 )

    Net loss before income taxes

      $ (751 )   $ (11,080 )

    (1)

    Represents consolidated total other income (expense), net, as reported on the consolidated statements of operations and comprehensive loss.

     

    Products segment assets exclude corporate assets, such as cash, restricted cash, and corporate facilities. Total assets as of March 31, 2025 and  December 31, 2024 were as follows:

     

       

    March 31,

       

    December 31,

     

    (in thousands)

     

    2025

       

    2024

     

    Total assets:

                   

    Products

      $ 15,318     $ 15,001  

    Corporate

        9,996       12,336  

    Consolidated

      $ 25,314     $ 27,337  

     

    Additions to long-lived assets during the three months ended March 31, 2025 and 2024 were as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

     

    Products

      $ —     $ 11  

    Corporate

        —       —  

    Consolidated

      $ —     $ 11  
     

    Note 17. Subsequent Events

     

    On April 28, 2025, we entered into an equity distribution agreement (the “2025 ATM Agreement,” and collectively with the the 2022 ATM Agreement, the “ATM Agreements”) with Canaccord pursuant to which Canaccord acts as placement agent and we may offer and sell shares of Common Stock from time to time through Canaccord. The issuance and sale of Common Stock by us under the 2025 ATM Agreement was made pursuant to our registration statement on Form S-3 (file number 333-286058), declared effective by the SEC on April 25, 2025, and a related prospectus supplement. Subsequent to  March 31, 2025, we sold 287,927 shares of Common Stock, generated gross proceeds of $0.9 million, and paid commissions of $13,000 under our ATM Agreements.

     

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    Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     

    The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements reflecting our or our management team’s expectations, hopes, beliefs, intentions, strategies, estimates, and assumptions concerning events and financial trends that may affect our future financial condition or results of operations. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K. We undertake no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws. Unless the context otherwise requires, for purposes of this section, the terms the “Company,” “we,” “us,” or “our” are intended to mean the business and operations of Clene Inc. and its consolidated subsidiaries.

     

    Business Overview

     

    We are a clinical-stage pharmaceutical company pioneering the discovery, development, and commercialization of novel clean-surfaced nanotechnology (“CSN®”) therapeutics. CSN® therapeutics are comprised of atoms of transition elements that, when assembled in nanocrystal form, possess unusually high, unique catalytic activities not present in those same elements in bulk form. These catalytic activities drive, support, and maintain beneficial metabolic and energetic cellular reactions within diseased, stressed, and damaged cells.

     

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

     

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

     

    Reverse Recapitalization

     

    Clene Nanomedicine, Inc. (“Clene Nanomedicine”) became a public company on December 30, 2020 (the “Closing Date”) when it completed a reverse recapitalization (the “Reverse Recapitalization”) with Tottenham Acquisition I Limited (“Tottenham”), and with Tottenham’s wholly-owned subsidiary and our predecessor, Chelsea Worldwide Inc., and Creative Worldwide Inc., a wholly-owned subsidiary of Chelsea Worldwide Inc. On the Closing Date, Chelsea Worldwide Inc. changed its name to Clene Inc. and listed its shares of common stock, par value $0.0001 per share (“Common Stock”) on the Nasdaq Capital Market (“Nasdaq”) under the symbol “CLNN.”

     

    In connection with the Reverse Recapitalization, certain of Clene Nanomedicine’s common stockholders are entitled to receive earn-out payments (the “Clene Nanomedicine Contingent Earn-out”), and Tottenham’s former officers and directors and Norwich Investment Limited (collectively, the “Initial Stockholders”) are entitled to receive earn-out payments (the “Initial Stockholders Contingent Earn-out,” and both collectively the “Contingent Earn-outs”) based on achieving certain milestones.

     

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    Reverse Stock Split

     

    Effective July 11, 2024 (the “Effective Date”), we filed a Certificate of Amendment to our Fourth Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, to effect a 1-for-20 reverse stock split (the “Reverse Stock Split”) of our Common Stock. Beginning with the opening of trading on the Effective Date, our Common Stock began trading on Nasdaq on a split-adjusted basis under the same symbol, “CLNN.” As a result of the Reverse Stock Split, every 20 shares of our Common Stock issued and outstanding were automatically combined and converted into 1 validly issued, fully paid and non-assessable share of Common Stock. In lieu of any fractional shares, stockholders received an amount in cash (without interest) equal to: (i) the number of shares of Common Stock held by such stockholder before the Reverse Stock Split that would otherwise have been exchanged for such fractional shares multiplied by (ii) the closing price of our Common Stock on Nasdaq on the trading day immediately preceding the Effective Date.

     

    The Reverse Stock Split did not reduce the total number of authorized shares of Common Stock or preferred stock, par value $0.0001 per share (“Preferred Stock”), or change the par values of the Company’s Common Stock or Preferred Stock. All outstanding stock options, warrants, rights to restricted stock awards, convertible debt, and contingent earn-out shares entitling their holders to purchase or receive shares of Common Stock were adjusted as a result of the Reverse Stock Split, in accordance with the terms of each such security. In addition, the number of shares reserved for issuance pursuant to our Amended 2020 Stock Plan was also appropriately adjusted. All historical share and per share data for the periods presented in our condensed consolidated financial statements, including for periods ending prior to July 11, 2024, has been adjusted to reflect the 1-for-20 Reverse Stock Split on a retroactive basis as if the Reverse Stock Split occurred as of the earliest period presented.

     

    Recent Developments of Our Clinical Programs

     

    Amyotrophic Lateral Sclerosis

     

    In December 2024, we announced that we recently received written guidance from the Division of Neurology 1 (“DN1”) of the U.S. Food and Drug Administration (“FDA”) regarding a potential accelerated approval pathway for CNM-Au8® in ALS. As announced previously in September 2024, we were initially advised that the data presented in our briefing package for CNM-Au8 was not adequate to support an NDA submission under the accelerated approval pathway. However, following our November 2024 meeting with DN1 and presentation of additional data and analyses, the FDA provided guidance on a potential path to meet the regulatory standard for substantial evidence of effectiveness supporting accelerated approval. The FDA recommended that we investigate whether additional data from our ongoing compassionate use Expanded Access Programs (“EAPs”) could be leveraged to substantiate the effect of CNM-Au8 on neurofilament light (“NfL”) decline. We intend to follow the FDA’s recommendation to provide data from the ongoing EAPs and believe we can address the FDA’s requests. The additional NfL biomarker collection and analyses to support NDA submission will occur during the third quarter of 2025, as summarized below:

     

     

    ●

    NfL biomarker analyses—Provide supportive evidence of NfL declines in participants from our ongoing FDA-authorized compassionate-use EAPs. We will meet with the FDA in the second quarter of 2025 to review and finalize our statistical analysis plan for the EAP NfL biomarker analyses.

     

     

    ●

    Survival pharmacometric modeling—Provide analyses of NfL and related disease-specific biomarkers linked to clinical survival benefit and clinical changes from the Phase 2 trial data.

     

     

    ●

    Additional ALS-specific biomarkers—Provide analyses of additional ALS-disease specific biomarkers to support the pharmacodynamic activity of CNM-Au8 for treatment of ALS.

     

    The FDA noted that whether NfL can serve as a reasonably likely surrogate endpoint for the effects of CNM-Au8 in ALS and whether the magnitude of change observed on NfL in patients treated with CNM-Au8 is reasonably likely to predict clinical benefit for ALS would be a matter of review. In preparation for a potential NDA submission in the fourth quarter of 2025 with the accelerated approval request, we plan to commence a confirmatory Phase 3 trial, RESTORE-ALS, in the second half of 2025. The trial is designed to investigate the effects of CNM-Au8 on improved survival (primary endpoint) and delayed time to ALS clinical worsening events (secondary efficacy endpoint). We have submitted the RESTORE-ALS trial protocol to the FDA and the FDA review process is ongoing.

     

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    Multiple Sclerosis

     

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

     

    In April 2025, we announced new evidence of remyelination and neuronal repair in MS participants following treatment with CNM-Au8 30 mg from analyses of the long-term open-label extension of the VISIONARY-MS clinical trial. The post hoc analyses identify consistent anatomical and physiologic effects within the same trial participants resulting in cognition and vision improvement for people living with MS. The analyses highlight significant and clinically meaningful improvements in cognition and visual function, supported by corresponding objective biomarkers, including advanced magnetic resonance imaging (“MRI”) diffusion tensor imaging (“DTI”) and multi-focal visual evoked potential (“mf-VEP”) assessments. Key findings from the analyses included:

     

     

    ●

    MRI DTI metrics (axial diffusivity (“AD”) and magnetization transfer ratio (“MTR”)—structural markers associated with neuronal repair and remyelination) confirmed improvements in the brain’s neuronal structure consistent with remyelination and repair among MS participants receiving CNM-Au8; and

     

     

    ●

    mf-VEP metrics (VEP latency and amplitude—functional markers associated with remyelination and neuronal repair) confirmed improvements in the visual system and related to cognitive function among MS participants receiving CNM-Au8.

     

    Both the low contrast letter acuity (“LCLA”) vision—a visual measure associated with vision-specific quality of life and overall MS disability—and symbol digit modality test (“SDMT”)—a benchmark for working memory and cognitive processing speed in MS—improved in CNM-Au8 participants, results that have not been previously documented in MS clinical trials of other repair candidate drugs. Importantly, these clinical improvements correlated with objective biomarker measurements including:

     

     

    ●

    96% of participants who were LCLA responders, showing visual improvement, also demonstrated improvement in MRI DTI metrics (AD and/or MTR), evidencing repair and remyelination;

     

     

    ●

    91% of LCLA visual responders exhibited mf-VEP improvements in latency (conduction velocity) and/or amplitude (signal strength);

     

     

    ○

    VEP provides an objective measure of visual circuit pathway, further supporting functional recovery linked to repair and remyelination; and

     

     

    ●

    98% of SDMT responders with improved cognition had corresponding improvements in MRI DTI  metrics AD and/or MTR, substantiating that the cognitive enhancement was associated with repair and remyelination.

     

    These results are also consistent with previous neuronal and clinical improvement observed in the double-blind period of VISIONARY-MS, while also reinforcing the long-term benefits of the novel therapeutic mechanism of CNM-Au8. CNM-Au8 supports critical repair processes within neurons and oligodendrocytes, leading to improved neurological function and remyelination, as previously documented.

     

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    The chart below reflects the growing body of evidence for CSN therapeutics from our completed and ongoing clinical programs.

     

    pipelinemay25_22pct.jpg
     

    Recent Competition Update

     

    Despite the great need for an effective disease-modifying treatment for ALS and significant research efforts by the pharmaceutical industry to meet this need, there have been limited clinical successes and no curative therapies approved to date. In early 2025, the topline results were announced for two regimens of the HEALEY ALS Platform Trial (ABBV-CLS-7262 from Calico Life Sciences LLC and AbbVie Inc., and DNL343 from Denali Therapeutics Inc.), with both treatments failing to meet their primary and key secondary endpoints.

     

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    Financial Overview

     

    Our financial condition, results of operations, and the period-to-period comparability of our financial results are principally affected by the following factors:

     

    Research and Development Expense

     

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

     

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

     

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

     

    Our clinical trial accrual process seeks to account for expenses resulting from obligations under contracts with CROs, consultants, and clinical sites in connection with conducting clinical trials. The financial terms of these contracts vary and may result in payment flows that do not match the periods over which materials or services are provided to us under such contracts. We reflect the appropriate clinical trial expenses in the condensed consolidated financial statements by matching the appropriate expenses with the period in which services are performed. In the event advance payments are made to CROs, the payments are recorded as prepaid assets and expensed over the period in which services are performed.

     

    General and Administrative Expense

     

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

     

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

     

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    Total Other Income (Expense), Net

     

    Total other income (expense), net, consists primarily of (i) interest income and interest expense, (ii) changes in the fair value of our common stock warrant liabilities, derivative liabilities, and Contingent Earn-outs, and (iii) research and development tax credits, unrestricted grants, and conditional grants for which applicable conditions have been met.

     

    Results of Operations

     

    Our results of operations for the three months ended March 31, 2025 and 2024 were as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

       

    Change

     

    Revenue:

                           

    Product revenue

      $ 64     $ 44       45 %

    Royalty revenue

        17       29       (41 )%

    Total revenue

        81       73       11 %

    Operating expenses:

                           

    Cost of revenue

        20       16       25 %

    Research and development

        1,481       5,869       (75 )%

    General and administrative

        2,656       3,420       (22 )%

    Total operating expenses

        4,157       9,305       (55 )%

    Loss from operations

        (4,076 )     (9,232 )     (56 )%

    Total other income (expense), net

        3,325       (1,848 )     *  

    Net loss

      $ (751 )   $ (11,080 )     (93 )%

     

    Revenue

     

    Product revenue relates to our dietary supplement products and consists of (i) sales of an aqueous zinc-silver ion dietary (mineral) supplement sold by our wholly-owned subsidiary, dOrbital, Inc., under the trade name “rMetx™ ZnAg Immune Boost,” or under a supply agreement with 4Life under the trade name “Zinc Factor™,” and (ii) sales of KHC46, an aqueous gold dietary (mineral) supplement of very low-concentration, sold under a supply agreement with 4Life under the trade name “Gold Factor™.” Royalty revenue relates to our dietary supplement products and consists of proceeds under an exclusive and royalty-bearing license agreement with 4Life relating to the sale of Gold Factor. During the three months ended March 31, 2025 and 2024, changes in product and royalty revenues were due to the timing of purchases and sales of Zinc Factor and Gold Factor by 4Life under the supply and license agreements.

     

    Cost of Revenue

     

    Cost of revenue relates to production and distribution costs for the sales of Gold Factor, Zinc Factor, and rMetx dietary supplements.

     

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    Research and Development Expense

     

    Research and development expense during the three months ended March 31, 2025 and 2024 was as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

       

    Change

     

    CNM-Au8:

                           

    Amyotrophic lateral sclerosis

      $ 1,343     $ 770       74 %

    Multiple sclerosis

        25       92       (73 )%

    Regulatory activities

        130       340       (62 )%

    General/pre-clinical/non-clinical

        63       128       (51 )%

    CNM-ZnAg

        —       13       *  

    Unallocated:

                           

    Facilities

        419       381       10 %

    Depreciation

        338       354       (5 )%

    Manufacturing

        83       239       (65 )%

    Research

        5       175       (97 )%

    Equipment

        14       29       (52 )%

    Maintenance

        32       20       60 %

    Information technology

        65       37       76 %

    Other

        25       29       (14 )%

    Personnel

        2,160       2,664       (19 )%

    Stock-based compensation

        946       877       8 %

    Grant revenue as a reduction of research and development expense

        (4,167 )     (279 )     1,394 %

    Total research and development

      $ 1,481     $ 5,869       (75 )%

    *

    Not meaningful.

     

    The change in research and development expenses was primarily due to the following:

     

     

    (i)

    an increase in expenses related to our lead drug candidate, CNM-Au8, primarily due to (A) an increase in expenses related to our ALS clinical programs, including our ongoing EAP funded by a National Institutes of Health grant (the “ACT-EAP”) due to increased enrollment in the EAP, and an increase in expenses for planning activities for our RESTORE ALS clinical trial; partially offset by a decrease in expenses related to the HEALEY ALS Platform Trial due to the previous completion of the blinded and open-label extension portions of the trial and a decrease in expenses related to our two ongoing EAPs with Massachusetts General Hospital, (B) a decrease in expenses related to our MS clinical programs, including REPAIR-MS due to the conclusion of enrollment of the ongoing second dosing cohort, partially offset by an increase in expenses for our MS EAP which began enrollment in September 2024, (C) a decrease in expenses for regulatory activities related to our ongoing FDA discussions and NDA submission-related activities, and (D) a decrease in pre-clinical, non-clinical, and other general CNM-Au8-related expenses;

     

     

    (ii)

    a decrease in unallocated expenses, primarily due to: (A) a decrease in depreciation expense, (B) a decrease in manufacturing expenses due to the conclusion of various clinical programs, (C) a decrease in expenses related to general research activities, and (D) a decrease in equipment-related expenses such as equipment service contracts; partially offset by (E) an increase in maintenance expenses related to equipment repairs and calibration, (F) an increase in information technology-related expenses, and (G) an increase in expenses related to our facilities such as rent, utilities, and maintenance;

     

     

    (iii)

    a decrease in personnel expenses, primarily due to a decrease in expenses for manufacturing personnel due to the conclusion of various clinical programs;

     

     

    (iv)

    an increase in stock-based compensation expense, primarily due to the timing of award grants, vesting, and forfeitures for research and development personnel; and

     

     

    (v)

    an increase in grant revenue, recorded as a reduction to research and development expense, due to (i) an increase in enrollment and study operations in the ACT-EAP which resulted in higher reimbursable expenses during the three months ended March 31, 2025, (ii) no grant revenue from the ACT-EAP during the three months ended March 31, 2024, as reimbursements for expenses incurred during the period September 25, 2023 to March 31, 2024 were not recognized until we entered into an agreement covering the first year of the ACT-EAP on April 3, 2024 and grant recognition criteria were met, and (iii) higher grant revenue from the ACT-EAP during the three months ended March 31, 2025, as reimbursements for expenses incurred during the period September 1, 2024 to December 31, 2024 were not recognized until we entered into an agreement covering the second year of the ACT-EAP on January 28, 2025 and grant recognition criteria were met.

     

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    General and Administrative Expense

     

    General and administrative expense during the three months ended March 31, 2025 and 2024 was as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

       

    Change

     

    Insurance

      $ 181     $ 186       (3 )%

    Legal

        148       75       97 %

    Finance and accounting

        310       249       24 %

    Public and investor relations

        111       234       (53 )%

    Facilities

        30       32       (6 )%

    Depreciation

        66       66       0 %

    Information technology

        49       79       (38 )%

    Personnel

        832       1,096       (24 )%

    Stock-based compensation

        1,001       1,136       (12 )%

    Grant revenue as a reduction of general and administrative expense

        (163 )     —       *  

    Other

        91       267       (66 )%

    Total general and administrative

      $ 2,656     $ 3,420       (22 )%

     

    The change in general and administrative expense was primarily due to the following:

     

     

    (i)

    an increase in legal fees, primarily due to an increase in legal fees related to intellectual property and financing and fundraising; partially offset by a decrease in legal fees related to regulatory activities and other general corporate legal fees;

     

     

    (ii)

    an increase in finance and accounting fees, primarily due to an increase in audit and tax fees, partially offset by a decrease in fees from consultants, advisors, and other financial vendors;

     

     

    (iii)

    a decrease in fees related to our public and investor relations efforts;

     

     

    (iv)

    a decrease in stock-based compensation expense, primarily due to the timing of award grants, vesting, and forfeitures for general and administrative personnel;

     

      (v)

    an increase in grant revenue, recorded as a reduction to general and administrative expense, due to (i) an increase in enrollment and study operations in the ACT-EAP which resulted in higher reimbursable expenses during the three months ended March 31, 2025, (ii) no grant revenue from the ACT-EAP during the three months ended March 31, 2024, as reimbursements for expenses incurred during the period September 25, 2023 to March 31, 2024 were not recognized until we entered into an agreement covering the first year of the ACT-EAP on April 3, 2024 and grant recognition criteria were met, and (iii) higher grant revenue from the ACT-EAP during the three months ended March 31, 2025, as reimbursements for expenses incurred during the period September 1, 2024 to December 31, 2024 were not recognized until we entered into an agreement covering the second year of the ACT-EAP on January 28, 2025 and grant recognition criteria were met; and

     

     

    (vi)

    a decrease in other expenses during the three months ended March 31, 2025 due to a decrease in expenses related to lobbying activities, travel, meals, and other miscellaneous expenses.

     

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    Total Other Income (Expense), Net

     

    Total other income (expense), net, during the three months ended March 31, 2025 and 2024 was as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

       

    Change

     

    Interest income

      $ 81     $ 359       (77 )%

    Interest expense

        (608 )     (1,244 )     (51 )%

    Change in fair value of common stock warrant liabilities

        2,510       (1,309 )     *  

    Change in fair value of derivative liabilities

        1,147       —       *  

    Change in fair value of Clene Nanomedicine contingent earn-out liability

        —       53       *  

    Change in fair value of Initial Stockholders contingent earn-out liability

        —       7       *  

    Research and development tax credits and unrestricted grants

        195       286       (32 )%

    Total other income (expense), net

      $ 3,325     $ (1,848 )     *  

    *

    Not meaningful.

     

    The change in total other income (expense), net, was primarily due to the following:

     

     

    (i)

    a decrease in interest income primarily due to lower average balances of cash and cash equivalents and lower interest rates in 2025;

     

     

    (ii)

    a decrease in interest expense primarily due to declining balances of notes payable following principal repayments, a decrease in amortization of debt discounts on notes payable, and a decrease in non-cash interest expense on notes payable;

     

     

    (iii)

    a gain from the changes in fair value of the 2023 Avenue Warrant, Tranche A Warrants, and 2024 Common Warrants during the three months ended March 31, 2025 and a loss from the changes in fair value of the 2023 Avenue Warrant and Tranche A Warrants during the three months ended March 31, 2024. The changes in fair value of common stock warrant liabilities were due to the change in price of our Common Stock on Nasdaq and updates in the valuation model assumptions (see “Critical Accounting Estimates”);

     

      (iv)

    a gain from the change in fair value of the derivative liabilities separated from our senior secured convertible promissory notes (the “2024 SSCP Notes”) during the three months ended March 31, 2025. The change was due to the price of our Common Stock on Nasdaq and updates in the valuation model assumptions (see “Critical Accounting Estimates”);

     

     

    (ix)

    a gain from the change in fair value of the Clene Nanomedicine Contingent Earn-out liability and Initial Stockholders Contingent Earn-out liability during the three months ended March 31, 2024. The changes were due to the price of our Common Stock on Nasdaq and updates in the valuation model assumptions (see “Critical Accounting Estimates”); and

     

     

    (x)

    a decrease in research and development tax credits and unrestricted grants due to changes in the amount of qualifying research and development expenses incurred.

     

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    Taxation

     

    United States

     

    We are incorporated in the state of Delaware and subject to statutory U.S. federal corporate income tax at a rate of 21.00%. We are also subject to state income tax in Maryland at a rate of 8.25%, and in Utah at a rate of 4.55% and 4.65% for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025 and December 31, 2024, we recorded a full valuation allowance against our net deferred tax assets due to the uncertainty as to whether such assets will be realized resulting from our three-year cumulative loss position and the uncertainty surrounding our ability to generate pre-tax income in the foreseeable future.

     

    Australia

     

    Our wholly-owned subsidiary, Clene Australia Pty Ltd (“Clene Australia”), was established in Australia in March 2018 and is subject to corporate income tax at a rate of 30.00%. Clene Australia had no taxable income or provision for income taxes for the three months ended March 31, 2025 and 2024. We recorded other income of $24,000 and $14,000 for the three months ended March 31, 2025 and 2024, respectively, for research and development tax credits pertaining to Clene Australia for the 2025 and 2024 tax years, respectively.

     

    Netherlands

     

    Our wholly-owned subsidiary, Clene Netherlands B.V. (“Clene Netherlands”), was established in the Netherlands in April 2021 and is subject to corporate income tax at a rate of 19.00% up to €200,000 of taxable income and 25.80% for taxable income in excess of €200,000 for the three months ended March 31, 2025 and 2024. Clene Netherlands had no taxable income or provision for income taxes for the three months ended March 31, 2025 and 2024.

     

    Liquidity and Capital Resources

     

    Sources of Capital

     

    We have incurred significant losses and negative cash flows from operations since our inception. We expect to incur additional losses in the future to fund our operations and conduct research and development of our drug candidates. We recognize the need to raise additional capital to fully implement our business plan. The long-term continuation of our business plan is dependent upon the generation of sufficient revenues from our products to offset expenses and capital expenditures. In the event that we do not generate sufficient revenues and are unable to obtain funding, we will be forced to delay, reduce, or eliminate some or all of our research and development programs, product portfolio expansion, commercialization efforts, or capital expenditures, which could adversely affect our business prospects, ability to meet long-term liquidity needs, or we may be unable to continue operations.

     

    Since our inception, we have dedicated substantially all our resources to the development of our drug candidates. We have financed our operations principally through the following sources:

     

      ●

    gross proceeds of $188.7 million from equity financing, including sales of common stock, preferred stock, common stock warrants, and pre-funded common stock warrants;

     

      ●

    gross proceeds of $69.6 million from borrowings under notes payable, convertible notes payable, and convertible promissory notes;

     

      ●

    gross proceeds of $9.4 million from the Reverse Recapitalization;

     

      ●

    gross proceeds of $10.1 million from refundable research and development tax credits;

     

      ●

    gross proceeds of $9.2 million from grants from various organizations; and

     

      ●

    gross proceeds of $1.1 million from stock option and warrant exercises.

     

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

     

    Going Concern

     

    We incurred a loss from operations of $4.1 million and $9.2 million for the three months ended March 31, 2025 and 2024, respectively. Our accumulated deficit was $282.9 million and $282.1 million as of March 31, 2025 and December 31, 2024, respectively. Our cash and cash equivalents totaled $9.8 million and $12.2 million as of March 31, 2025 and December 31, 2024, respectively, and net cash used in operating activities was $5.0 million and $7.1 million for the three months ended March 31, 2025 and 2024, respectively.

     

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

     

    To mitigate our funding needs, we plan to raise additional funding, including exploring equity financing and offerings, debt financing, licensing or collaboration arrangements with third parties, as well as utilizing our existing at-the-market facility and equity purchase agreement and potential proceeds from the exercise of outstanding warrants and stock options. These plans are subject to market conditions and reliance on third parties, and there is no assurance that effective implementation of our plans will result in the necessary funding to continue current operations. During the three months ended March 31, 2025, we generated $2.7 million of gross proceeds from our equity distribution agreement and subsequent to March 31, 2025, we generated $0.9 million of gross proceeds from our equity distribution agreement. We have implemented cost-saving initiatives, including delaying and reducing certain research and development programs and commercialization efforts and elimination of certain staff positions. We have concluded that our plans do not alleviate the substantial doubt about our ability to continue as a going concern beyond one year from the date the condensed consolidated financial statements are issued.

     

    The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As a result, the accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amounts and classification of liabilities that may result should we be unable to continue as a going concern.

     

    Short-Term Material Cash Requirements

     

    For at least the next twelve months, our primary capital requirements are to fund our operations, including research and development, personnel, regulatory, and other clinical trial costs related to development of our lead drug candidate, CNM-Au8; general and administrative costs to support our drug development and pre-commercial activities in advance of receiving regulatory approval for our drug candidates; and principal and interest payments on our notes payable and convertible notes payable. Firm commitments for funds include approximately $1.4 million of payments under operating lease obligations, payment of principal and interest on notes payable and convertible notes payable totaling $4.9 million, and a commitment for capital expenditures totaling $0.2 million related to the construction of our manufacturing facilities. We expect to meet our short-term liquidity requirements primarily through cash on hand. Additional sources of funds include equity financing, debt financing, or other capital sources.

     

    We enter into agreements in the normal course of business with CROs for clinical trials and with vendors for preclinical studies and other services and products for operating purposes, which are cancelable at any time by us, subject to payment of our remaining obligations under binding purchase orders and, in certain cases, nominal early termination fees. These commitments are not deemed significant.

     

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    Long-Term Material Cash Requirements

     

    Beyond the next twelve months, our primary capital requirements are to fund our operations, including research and development, personnel, regulatory, and other clinical trial costs related to development of our lead drug candidate, CNM-Au8; general and administrative costs to support our drug development activities in advance of receiving regulatory approval for our drug candidates; and principal and interest payments on our notes payable and convertible notes payable. Additional funds may be spent to initiate new clinical trials, at our discretion. Known obligations beyond the next twelve months include $4.9 million of payments under operating lease obligations, and interest and principal repayment of notes payable and convertible notes payable of $14.6 million. We expect to meet our long-term liquidity requirements primarily through equity financing, debt financing, or other capital sources.

     

    Use of Funds

     

    Our cash flows for the three months ended March 31, 2025 and 2024 were as follows:

     

       

    Three Months Ended March 31,

     

    (in thousands)

     

    2025

       

    2024

     

    Net cash used in operating activities

      $ (5,011 )   $ (7,082 )

    Net cash provided by investing activities

        —       71  

    Net cash provided by (used in) financing activities

        2,673       (19 )

    Effect of foreign exchange rate changes on cash

        15       (59 )

    Net decrease in cash, cash equivalents and restricted cash

      $ (2,323 )   $ (7,089 )

     

    Our primary use of cash in all periods presented was to fund our research and development, regulatory and other clinical trial costs, and general corporate expenditures.

     

    Operating Activities

     

    Net cash used in operating activities was $5.0 million for the three months ended March 31, 2025, which resulted from a net loss of $0.8 million, adjusted for non-cash items totaling $0.9 million and a net change in operating assets and liabilities of $3.3 million. Significant non-cash items included: (i) depreciation expense of $0.4 million related to laboratory and office equipment and leasehold improvements, (ii) non-cash lease expense of $0.1 million, (iii) stock-based compensation expense of $1.9 million, (iv) accretion of debt discount of $0.2 million, (v) non-cash interest expense on notes payable of $12,000, (vi) a change in fair value of our common stock warrant liabilities of $2.5 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, and (vii) a change in fair value of our derivative liabilities of $1.1 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs. The net change in operating assets and liabilities was primarily attributable to: (A) a decrease in accounts receivable of $0.1 million and an increase in accounts payable of $0.2 million due to the timing of vendor invoicing and payments, (B) a decrease in inventory of $30,000, (C) an increase in prepaid expenses and other current assets of $0.9 million due to the timing of vendor invoicing and payments, the timing of receipt of metals to be used in research and development, an increase in prepaid ACT-EAP expenses, and an increase in research and development tax credits receivable, (D) a decrease in accrued liabilities of $2.5 million primarily due to a decrease in deferred grants, a decrease in accrued CRO and clinical fees, a decrease in other miscellaneous accrued liabilities, partially offset by an increase in accrued compensation and benefits, and (E) a decrease in operating lease obligations of $0.2 million.

     

    Net cash used in operating activities was $7.1 million for the three months ended March 31, 2024, which resulted from a net loss of $11.1 million, adjusted for non-cash items totaling $4.2 million and a net change in operating assets and liabilities of $0.2 million. Significant non-cash items included: (i) depreciation expense of $0.4 million related to laboratory and office equipment and leasehold improvements, (ii) non-cash lease expense of $0.1 million, (iii) stock-based compensation expense of $2.0 million, (iv) accretion of debt discount of $0.4 million, (v) non-cash interest expense of $0.1 million, (vi) a change in fair value of our common stock warrant liabilities of $1.3 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, and (vii) a change in fair value of the Clene Nanomedicine and Initial Stockholders Contingent Earn-outs of $0.1 million and $7,000, respectively, due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs. The net change in operating assets and liabilities was primarily attributable to: (A) a decrease in accounts receivable of $0.1 million and an increase in accounts payable of $0.1 million due to the timing of vendor invoicing and payments, (B) an increase in prepaid expenses and other current assets of $0.4 million due to the timing of vendor invoicing and payments, the timing of receipt of metals to be used in research and development, and an increase in research and development tax credits receivable, (C) an increase in accrued liabilities of $0.2 million primarily due to increased accrued compensation and benefits and CRO and clinical fees, partially offset by a decrease in other accrued liabilities, and (D) a decrease in operating lease obligations of $0.2 million.

     

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    Investing Activities

     

    We had no net cash provided by or used in investing activities for the three months ended March 31, 2025. Net cash provided by investing activities was $0.1 million for the three months ended March 31, 2024, which consisted of proceeds from maturities of marketable securities of $6.3 million, partially offset by purchases of marketable securities of $6.2 million and purchases of property and equipment of $11,000.

     

    Financing Activities

     

    Net cash provided by financing activities was $2.7 million for the three months ended March 31, 2025, which consisted of proceeds from the issuance of common stock of $2.7 million. Net cash used in financing activities was $19,000 for the three months ended March 31, 2024, which consisted of payments of finance lease obligations of $19,000.

     

    Public Offerings

     

    In October 2024, pursuant to a placement agency agreement with Canaccord Genuity LLC (“Canaccord”), we sold 725,000 shares of Common Stock and pre-funded warrants to purchase up to 17,626 shares of Common Stock at an exercise price of $0.001 per share. The aggregate gross proceeds were approximately $3.5 million, excluding the proceeds, of any, from the exercise of the pre-funded warrants and before deducting placement agent fees and expenses and other expenses payable by us. We paid Canaccord a placement agent fee of 6.00% of the aggregate gross proceeds of the offering. The offering was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective by the Securities and Exchange Commission (“SEC”) on April 26, 2022, and a related prospectus supplement. Additionally, in separate, concurrent private placements, we also sold 379,930 shares of Common Stock, pre-funded warrants to purchase up to 424,358 shares of Common Stock at an exercise price of $0.001 per share, and warrants to purchase up to 1,546,914 shares of Common Stock at an exercise price of $4.82 per share. The aggregate gross proceeds from the private placements were approximately $3.8 million, of which $1.3 million was contributed by certain of our directors, executive officers and their affiliated entities, and excludes the proceeds, if any, from the exercise of the warrants and pre-funded warrants.

     

    Common Stock Sales Agreement

     

    During the three months ended March 31, 2025, we sold 578,205 shares of Common Stock under an equity distribution agreement (the “2022 ATM Agreement”) with Canaccord, generated gross proceeds of $2.7 million, and paid commissions of $0.1 million. We did not effect any sales during any of the other periods presented herein. The sale of Common Stock under the 2022 ATM Agreement was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective by the SEC on April 26, 2022, and a related prospectus supplement.

     

    Critical Accounting Estimates

     

    Our discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles. The preparation of these condensed consolidated financial statements requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, revenues, costs, and expenses. We evaluate our estimates and judgments on an ongoing basis, and our actual results may differ from these estimates. We base our estimates on historical experience, known trends and events, contractual milestones, and other various factors that are 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 apparent from other sources.

     

    We consider the following estimates to be critical as they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition and results of operations.

     

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    Convertible Notes

     

    In accordance with ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, we classified the 2022 DHCD Loan as convertible notes payable in the condensed consolidated balance sheets and did not separate the conversion option from the host contract as it did not meet the requirements for accounting as a derivative instrument. We account for the convertible note as a single liability measured at its amortized cost as of March 31, 2025 and December 31, 2024, with a carrying value of $5.3 million and $5.3 million, respectively.

     

    We classified a portion of the 2024 SSCP Notes as convertible notes payable in the consolidated balance sheets and separated three features from the host contract as derivative instruments measured at fair value: (i) the conversion option (the “SSCPN Conversion Feature”), (ii) the redemption option upon a change of control or any bankruptcy, liquidation, or other restructuring process consisting of a cash payment equal to 115% of the outstanding principal (the “SSCPN Redemption Feature”), and (iii) the acceleration option plus a penalty equal to 10% of all outstanding principal and accrued and unpaid interest upon the occurrence and continuation of certain events of default (the “SSCPN Default Feature,” collectively with the SSCPN Conversion Feature and SSCPN Redemption Feature, the “SSCPN Derivative Liabilities”). We accounted for the remainder of the 2024 SSCP Notes as liabilities measured at their amortized cost as of March 31, 2025 and December 31, 2024, with a carrying value of $8.8 million and $8.6 million, respectively. We remeasure the SSCPN Derivative Liabilities at each reporting date and record the change in fair value as a component of other income (expense), net in the condensed consolidated statements of operations and comprehensive loss. During the three months ended March 31, 2025, the change in fair value of the SSCPN Derivative Liabilities resulted in a gain of $1.2 million. We estimate the fair value of the 2024 SSCP Notes with and without the SSCPN Derivative Liabilities and calculate the difference as the implied fair value of the SSCPN Derivative Liabilities. The valuation model consists of a discounted cash flow model and a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) a change of control transaction, (ii) dissolution of the Company, or (iii) another outcome outside of (i)-(ii). These estimates require significant judgment. The unobservable valuation inputs were as follows:

     

       

    March 31,

       

    December 31,

     
       

    2025

       

    2024

     

    Expected stock price volatility

        91.20 %     101.50 %

    Risk-free interest rate

        4.00% –4.10 %     4.20 %

    Expected dividend yield

        0.00 %     0.00 %

    Expected term (in years)

        0.42 –1.22       0.50 –1.47  

    Probability of change of control

        10.00 %     10.00 %

    Probability of dissolution

        45.00 %     45.00 %

    Probability of other outcome

        45.00 %     45.00 %

     

    Common Stock Warrant Liabilities

     

    In accordance with ASC 815, we recognized the below common stock warrants as derivative liabilities measured at fair value and will remeasure them at each reporting date and record the change in fair value as a component of other income (expense), net, in the condensed consolidated statements of operations and comprehensive loss.

     

    Pursuant to amendments to the 2021 Avenue Loan in June 2023 and September 2024, we issued a warrant to purchase 150,000 shares of Common Stock at $4.6014 per share (the “2023 Avenue Warrant”). The change in fair value of the 2023 Avenue Warrant resulted in a gain of $0.2 million and a loss of $0.1 million during the three months ended March 31, 2025 and 2024, respectively. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) settlement of the instrument upon a change of control transaction, (ii) dissolution of the Company, or (iii) another outcome outside of (i)-(ii). These estimates require significant judgment. The unobservable valuation inputs were as follows:

     

       

    March 31,

       

    December 31,

     
       

    2025

       

    2024

     

    Expected stock price volatility

        95.90% –98.50 %     100.20% –101.40 %

    Risk-free interest rate

        3.90% –4.10 %     4.20% –4.30 %

    Expected dividend yield

        0.00 %     0.00 %

    Expected term (in years)

        0.83 –3.25       0.75 –3.50  

    Probability of change of control

        10.00 %     10.00 %

    Probability of dissolution

        45.00 %     45.00 %

    Probability of other outcome

        45.00 %     45.00 %

     

    43

    Table of Contents

     

    Pursuant to an underwritten public offering in June 2023, we issued the Tranche A Warrants to purchase 2,500,000 shares of Common Stock at $22.00 per share. The change in fair value of the Tranche A Warrants resulted in a gain of $0.6 million and a loss of $1.2 million during the three months ended March 31, 2025 and 2024, respectively. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) FDA acceptance of an NDA for CNM-Au8, (ii) settlement upon a fundamental transaction, (iii) dissolution of the Company, and (iv) another outcome outside of (i)-(iii). These estimates require significant judgment. The unobservable valuation inputs were as follows:

     

       

    March 31,

       

    December 31,

     
       

    2025

       

    2024

     

    Expected stock price volatility

        91.10% –100.00 %     97.80% –101.90 %

    Risk-free interest rate

        4.00% –4.30 %     4.20 %

    Expected dividend yield

        0.00 %     0.00 %

    Expected term (in years)

        0.38 –1.21       0.71 –1.46  

    Probability of NDA acceptance

        20.00 %     20.00 %

    Probability of fundamental transaction

        10.00 %     10.00 %

    Probability of dissolution

        45.00 %     45.00 %

    Probability of other outcome

        25.00 %     25.00 %

     

    Pursuant to a registered direct public offering in October 2024, we issued the 2024 Common Warrants to purchase 1,546,914 shares of Common Stock at $4.82 per share. The change in fair value of the 2024 Common Warrants resulted in a gain of $1.8 million during the three months ended March 31, 2025. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) dissolution of the Company and (ii) another outcome outside of (i). These estimates require significant judgment. The unobservable valuation inputs were as follows:

     

       

    March 31,

       

    December 31,

     
       

    2025

       

    2024

     

    Expected stock price volatility

        105.00 %     107.50 %

    Risk-free interest rate

        3.90 %     4.40 %

    Expected dividend yield

        0.00 %     0.00 %

    Expected term (in years)

        4.50       4.75  

    Probability of dissolution

        45.00 %     45.00 %

    Probability of other outcome

        55.00 %     55.00 %

     

    Income Taxes

     

    We account for uncertainty in income taxes by applying a two-step process to determine the amount of tax benefit to be recognized in the condensed consolidated financial statements. First, the tax position is evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. Additionally, we assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The estimation of these factors requires significant judgment. Based on our evaluation of these factors, we have not recorded income tax benefits for the net operating losses or for research and development tax credits or other deferred tax assets due to uncertainty of realizing benefits from these items.

     

    Stock-Based Compensation

     

    We account for stock-based compensation arrangements using a fair value-based method for costs related to all share-based payments including stock options and stock awards. The fair value is recognized over the period during which a grantee was required to provide services in exchange for the option award and service-based stock awards, known as the requisite service period (usually the vesting period), on a straight-line basis. For stock awards with market conditions, the fair value is recognized over the period based on the expected milestone achievement dates as the derived service period (usually the vesting period), on a straight-line basis. For stock awards with performance conditions, the grant-date fair value of these awards is the market price on the applicable grant date, and compensation expense will be recognized when the conditions become probable of being satisfied. We will recognize a cumulative true-up adjustment once the conditions become probable of being satisfied as the related service period had been completed in a prior period. We elect to account for forfeitures as they occur, rather than estimating expected forfeitures.

     

    44

    Table of Contents

     

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

     

       

    Three Months Ended March 31,

     
       

    2025

       

    2024

     

    Expected stock price volatility

        105.16% –110.25 %     99.99 %

    Risk-free interest rate

        4.05% –4.24 %     4.04 %

    Expected dividend yield

        0.00 %     0.00 %

    Expected term of options (in years)

        5.00 –6.25       5.00  

     

    We estimate the fair value of restricted stock awards using a Monte Carlo valuation model to simulate the achievement of certain stock price milestones. The unobservable inputs include the expected stock price volatility, risk-free interest rate, and expected term. No restricted stock awards were granted during the three months ended March 31, 2025 and 2024.

     

    Item 3. Quantitative and Qualitative Disclosures About Market Risk

     

    As a smaller reporting company, we are not required to provide information required by this Item.

     

    Item 4. Controls and Procedures

     

    Evaluation of Disclosure Controls and Procedures

     

    Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”). As a result of this evaluation, our principal executive officer and principal financial officer have concluded that, as of March 31, 2025, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below. Notwithstanding the identified material weaknesses, management, including our principal executive officer and principal financial officer, believes the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly represent, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in accordance with United States Generally Accepted Accounting Principles.

     

    Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

     

    Material Weaknesses in Internal Control over Financial Reporting

     

    In connection with the audit of our financial statements as of and for the years ended December 31, 2024 and 2023, our management identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified relate to the fact that we did not design or maintain an effective control environment commensurate with our financial reporting requirements. This deficiency in our control environment contributed to the following additional material weaknesses related to control activities and information and communication within our internal control over financial reporting:

     

      ●

    we did not design and maintain controls over the preparation and review of reconciliations and the review and segregation of duties over manual journal entries, including controls over the completeness and accuracy of information; and

     

    45

    Table of Contents

     

      ●

    we did not design and maintain information technology (“IT”) general controls for IT systems that are relevant to the preparation of the financial statements. Specifically, we did not design and maintain: (a) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to our appropriate personnel; (b) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized, and implemented appropriately; (c) computer operations controls to ensure that data backups are authorized and monitored; and (d) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements.

     

    Each of the control deficiencies described above could result in a misstatement of one or more account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, our management has determined that each of the control deficiencies described above constitute material weaknesses.

     

    Material Weakness Remediation

     

    Management continues to be actively engaged and committed to taking the steps necessary to remediate the control deficiencies that constituted the above material weaknesses. During 2024, we made the following enhancements to our control environment:

     

      ●

    we continued to strengthen the experience of our internal accounting team through refinement of our processes and internal controls over financial reporting and our IT and technical accounting resources; and

     

      ●

    until we have sufficient technical accounting resources, we engaged external consultants to provide support and to assist us in our evaluation of more complex applications of GAAP.

     

    Our remediation activities are continuing during 2025. In addition to the above actions, we expect to engage in additional activities, or have completed additional activities, including, but not limited to:

     

      ●

    adding more technical accounting resources to enhance our control environment; and

     

      ●

    until we have sufficient technical accounting resources, engaging external consultants to provide support and to assist us in our evaluation of more complex applications of GAAP.

     

    We continue to enhance corporate oversight over process-level controls and structures to ensure that there is appropriate assignment of authority, responsibility, and accountability to enable remediation of our material weaknesses. We believe that our remediation plan will be sufficient to remediate the identified material weaknesses and strengthen our internal control over financial reporting. As we continue to evaluate, and work to improve, our internal control over financial reporting, management may determine that additional measures to address control deficiencies or modifications to the remediation plan are necessary.

     

    Changes in Internal Control over Financial Reporting

     

    Other than changes described under “—Material Weakness Remediation,” there were no changes in our internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

     

    46

    Table of Contents

     

    PART II—OTHER INFORMATION

     

    Item 1. Legal Proceedings

     

    We are not currently a party to any material pending legal proceedings. From time to time, we may, however, be involved in legal proceedings in the ordinary course of business. We cannot predict the outcome of any such legal proceedings, and despite the potential outcomes, the existence thereof may have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

     

    Item 1A. Risk Factors

     

    Our business, financial condition, and results of operations can be affected by a number of factors, whether currently known or unknown, including, but not limited to, those described in Part I, Item 1A, Risk Factors of our 2024 Annual Report on Form 10-K, which was filed with the SEC on March 24, 2025. Except for the risk factor disclosed below, there have been no material changes to the risk factors since previously disclosed in the 2024 Annual Report on Form 10-K. Any one or more of these factors could, directly or indirectly, cause our actual financial condition and results of operations to vary materially from past, or from anticipated future, financial condition and results of operations. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, results of operations, and stock price.

     

    We do not satisfy all continued listing requirements of Nasdaq. There can be no assurance that we will be able to comply with the continued listing requirements of Nasdaq.

     

    On May 6, 2025, we received a written notice (the “Notice”) from Nasdaq that for the last 30 consecutive business days, the Market Value of Listed Securities (“MVLS”) for our Common Stock was below the minimum $35.0 million requirement for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(b)(2) (the “Minimum MVLS Requirement”). Additionally, we do not meet either of the alternative Nasdaq continued listing standards under Nasdaq Listing Rule 5550(b)(2): (i) stockholders’ equity of at least $2.5 million or (ii) net income of $500,000 in the most recently completed fiscal year, or in two of the three most recently completed fiscal years. In accordance with Nasdaq Listing Rule 5810(c)(3)(C), we have a period of 180 calendar days, or until November 3, 2025, to regain compliance with the Minimum MVLS Requirement. If at any time before November 3, 2025, the MVLS of our Common Stock closes at $35.0 million or more for a minimum of 10 consecutive business days, Nasdaq will provide us with a written confirmation of compliance with the Minimum MVLS Requirement. If we do not regain compliance with the Minimum MVLS Requirement by November 3, 2025, Nasdaq will provide written notification to us that our Common Stock is subject to delisting. At that time, we may appeal the delisting determination to a Nasdaq hearings panel. The Notice has no immediate effect on the listing of our Common Stock and our Common Stock will continue to be listed on Nasdaq under the symbol “CLNN.”

     

    We intend to actively monitor the MVLS of our Common Stock between now and November 3, 2025, and will consider our available options to regain compliance with the Minimum MVLS Requirement. There can be no assurance that we will regain compliance with the Minimum MVLS Requirement or maintain compliance with any of the other Nasdaq continued listing requirements. If Nasdaq delists our shares of Common Stock or warrants for failure to meet Nasdaq’s continued listing requirements, we and our stockholders could face significant material adverse consequences including, but not limited to, a limited availability of market quotations for our services, reduced liquidity for our securities, a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities, a limited amount of news and analyst coverage, and a decreased ability to issue additional securities or obtain additional financing in the future.

     

    Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     

    (a)

    Recent Sales of Unregistered Securities

     

    None.

     

    (b)

    Use of Proceeds

     

    None.

     

    (c)

    Purchases of Equity Securities by the Issuer and Affiliated Purchasers

     

    None.

     

    Item 3. Defaults Upon Senior Securities

     

    None.

     

    Item 4. Mine Safety Disclosures

     

    Not Applicable.

     

    Item 5. Other Information

     

    During the three months ended March 31, 2025, none of our officers or directors adopted or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

     

    47

    Table of Contents
     

    Item 6. Exhibits

     

    Exhibit Number

     

    Exhibit Description

    3.1

     

    Fourth Amended and Restated Certificate of Incorporation of Clene Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Registrant on May 11, 2023).

    3.2   Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation of Clene Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the registrant on May 30, 2024).
    3.3   Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation of Clene Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the registrant on July 9, 2024).

    3.4

     

    Bylaws of Clene Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by the Registrant on January 5, 2021).

    10.1#   FDP Subaward Amendment, dated January 28, 2025, by and between Clene Nanomedicine, Inc. and the Trustees of Columbia University in the City of New York (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the registrant on January 30, 2025).

    31.1*

     

    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.

    31.2*

     

    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.

    32.1**

     

    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

    32.2**

     

    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

    101.INS

     

    Inline XBRL Instance Document.

    101.SCH

     

    Inline XBRL Taxonomy Extension Schema Document.

    101.CAL

     

    Inline XBRL Taxonomy Extension Calculation Linkbase Document.

    101.DEF

     

    Inline XBRL Taxonomy Extension Definition Linkbase Document.

    101.LAB

     

    Inline XBRL Taxonomy Extension Label Linkbase Document.

    101.PRE

     

    Inline XBRL Taxonomy Extension Presentation Linkbase Document.

    104

     

    Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


    *

    Filed herewith.

    **

    Furnished herewith.

    # Schedules and similar attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. We agree to furnish supplementally a copy of such omitted materials to the SEC upon request.

     

    48

    Table of Contents

     

    SIGNATURES

     

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

     

     

    CLENE INC.

         

    Dated: May 7, 2025

    By:

    /s/ Robert Etherington

     

    Name:

    Robert Etherington

     

    Title:

    President, Chief Executive Officer and Director

       

    Dated: May 7, 2025

    By:

    /s/ Morgan R. Brown

     

    Name:

    Morgan R. Brown

     

    Title:

    Chief Financial Officer

     

    49
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      Biotechnology: Pharmaceutical Preparations
      Health Care
    • Chief Science Officer Mortenson Mark bought $97,432 worth of shares (20,512 units at $4.75), increasing direct ownership by 243% to 28,949 units (SEC Form 4)

      4 - Clene Inc. (0001822791) (Issuer)

      10/1/24 4:17:45 PM ET
      $CLNN
      Biotechnology: Pharmaceutical Preparations
      Health Care
    • Chief Executive Officer Etherington Robert Dee bought $47,500 worth of shares (10,000 units at $4.75), increasing direct ownership by 33% to 40,149 units (SEC Form 4)

      4 - Clene Inc. (0001822791) (Issuer)

      10/1/24 4:17:06 PM ET
      $CLNN
      Biotechnology: Pharmaceutical Preparations
      Health Care

    $CLNN
    Analyst Ratings

    Analyst ratings in real time. Analyst ratings have a very high impact on the underlying stock. See them live in this feed.

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    • Clene downgraded by Oppenheimer

      Oppenheimer downgraded Clene from Outperform to Perform

      10/4/22 8:58:30 AM ET
      $CLNN
      Biotechnology: Pharmaceutical Preparations
      Health Care
    • H.C. Wainwright initiated coverage on Clene with a new price target

      H.C. Wainwright initiated coverage of Clene with a rating of Buy and set a new price target of $16.00

      7/18/22 7:19:07 AM ET
      $CLNN
      Biotechnology: Pharmaceutical Preparations
      Health Care
    • Canaccord Genuity initiated coverage on Clene with a new price target

      Canaccord Genuity initiated coverage of Clene with a rating of Buy and set a new price target of $10.00

      5/2/22 9:11:11 AM ET
      $CLNN
      Biotechnology: Pharmaceutical Preparations
      Health Care

    $CLNN
    Financials

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    $CLNN
    Leadership Updates

    Live Leadership Updates

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    • Clene Reports Topline Results Demonstrating Survival Signal for CNM-Au8® in Healey ALS Platform Trial

      The primary endpoint of adjusted ALSFRS-R and secondary endpoints of CAFS and SVC were not met at 24 weeksPrespecified exploratory analyses of the secondary survival endpoint for the 30 mg dose demonstrated a >90% reduction in risk of death or risk of death/permanently assisted ventilation at 24 weeks Survival signal consistent with prior results from the Phase 2 RESCUE-ALS trialClene will continue the open-label extension of CNM-Au8 in the Healey ALS Platform Trial and is in discussions with the Healey & AMG ALS Center to design and offer an Expanded Access Protocol (EAP) of CNM-Au8 30mg for eligible participants of closed regimens and othersClene is pursuing multiple paths, including ongoi

      10/3/22 8:00:00 AM ET
      $CLNN
      Biotechnology: Pharmaceutical Preparations
      Health Care
    • Clene to Report HEALEY ALS Platform Trial Topline Results on Monday, October 3

      SALT LAKE CITY, Sept. 30, 2022 (GLOBE NEWSWIRE) -- Clene Inc. (NASDAQ:CLNN) along with its subsidiaries "Clene" and its wholly owned subsidiary Clene Nanomedicine Inc., a clinical-stage biopharmaceutical company focused on revolutionizing the treatment of neurodegenerative disease, today announced that it will report topline results of the CNM-Au8® regimen of the HEALEY ALS Platform Trial on Monday, Oct. 3. Clene's management team will host a conference call and webcast to discuss the results. Conference Call and Webcast DetailsTime and Date: 8:30 a.m. EDT on Oct. 3, 2022Investors: 1 (888) 660-6179 (toll-free) or 1 (929) 203-1946 (toll)Conference ID: 5318408Webcast Link A live audio

      9/30/22 4:12:25 PM ET
      $CLNN
      Biotechnology: Pharmaceutical Preparations
      Health Care
    • Clene Reports Positive Topline Results for CNM-Au8® in the Phase 2 VISIONARY-MS Trial in Multiple Sclerosis

      CNM-Au8 met primary and secondary endpoints of Low Contrast Letter Acuity (LCLA) and modified Multiple Sclerosis Functional Composite (mMSFC) compared to placebo over 48 weeks in the mITT populationConsistent improvements favoring CNM-Au8 were seen across paraclinical biomarkers, providing physiological evidence for its potential neuroprotective and remyelinating effectsCNM-Au8 treatment was well-tolerated, and there were no significant safety findings reportedResults provide support to advance CNM-Au8 into Phase 3 clinical developmentClene to host a call and webcast at 7:30 am EDT today SALT LAKE CITY, Aug. 15, 2022 (GLOBE NEWSWIRE) -- Clene Inc. (NASDAQ:CLNN) (along with its subsidiarie

      8/15/22 7:00:00 AM ET
      $CLNN
      Biotechnology: Pharmaceutical Preparations
      Health Care
    • Clene Appoints Neurology Expert to Executive Team

      SALT LAKE CITY, March 16, 2023 (GLOBE NEWSWIRE) -- Clene, Inc. (NASDAQ:CLNN) along with its subsidiaries "Clene" and its wholly owned subsidiary Clene Nanomedicine, Inc., a clinical-stage biopharmaceutical company focused on revolutionizing the treatment of neurodegenerative disease, today announced the appointment of Benjamin Greenberg, M.D., M.H.S. as Head of Medical.    An internationally recognized expert in treating disorders of the central nervous system, Dr. Greenberg brings extensive clinical and research experience to Clene as the company continues its development of CNM-Au8® as a potential treatment for amyotrophic lateral sclerosis (ALS) and multiple sclerosis (MS). "Dr. Green

      3/16/23 9:46:10 AM ET
      $CLNN
      Biotechnology: Pharmaceutical Preparations
      Health Care
    • Clene Announces New Chief Financial Officer Morgan Brown

      SALT LAKE CITY, Feb. 01, 2022 (GLOBE NEWSWIRE) -- Clene Inc. (NASDAQ:CLNN) along with its subsidiaries "Clene" and its wholly owned subsidiary Clene Nanomedicine, Inc., a clinical-stage biopharmaceutical company focused on revolutionizing the treatment of neurodegenerative disease, today announced the appointment of Morgan Brown as Chief Financial Officer effective Feb. 1, 2022. "Morgan joins the executive team at a pivotal time in Clene's growth," stated Clene's President and CEO, Rob Etherington. "He is a seasoned healthcare executive and public-company biopharma CFO, who has led the out-licensing of commercial stage assets and M&A transactions as well as numerous substantial equity and

      2/1/22 7:00:00 AM ET
      $CLNN
      Biotechnology: Pharmaceutical Preparations
      Health Care
    • Clene Nanomedicine Appoints Dr. Vallerie McLaughlin to its Board of Directors

      SALT LAKE CITY, Aug. 05, 2021 (GLOBE NEWSWIRE) -- Clene Inc. (NASDAQ:CLNN) along with its subsidiaries "Clene" and its wholly owned subsidiary Clene Nanomedicine, Inc., a clinical-stage biopharmaceutical company dedicated to the treatment of neurodegenerative disease using nanotechnology to treat energetic failure, today announced the appointment of Vallerie V. McLaughlin, MD, to its board as its seventh independent director. Dr. McLaughlin is the Kim A. Eagle MD Endowed Professor of Cardiovascular Medicine, Associate Chief Clinical Officer for Cardiovascular Services of the University of Michigan Medical Group, Associate Chief, Division of Cardiovascular Medicine, and Director of the Pulm

      8/5/21 4:01:00 PM ET
      $CLNN
      Biotechnology: Pharmaceutical Preparations
      Health Care