Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

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

In this document, the terms "Longeveron," "Company," "Registrant," "we," "us," and "our" refer to Longeveron Inc. We have no subsidiaries.

This Quarterly Report on Form 10-Q (this "10-Q") contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect our current expectations about our future results, performance, prospects and opportunities. This 10-Q contains forward-looking statements that can involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this 10-Q, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, research and development costs, future revenue, timing and likelihood of success, plans and objectives of management for future operations, future results of anticipated products and prospects, plans and objectives of management are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," or "would" or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. Factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements contained in this report include, but are not limited to, statements about:

The forward-looking statements contained in this 10-Q are made on the basis of the views and assumptions of management regarding future events and business performance as of the date this 10-Q is filed with the Securities and Exchange Commission (the "SEC"). We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this 10-Q and are subject to a number of risks, uncertainties and assumptions described in the section titled "Risk Factors" and elsewhere in this 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. We operate in a highly competitive and rapidly

changing environment; therefore, new risk factors can arise, and it is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on our business or the extent to which any individual risk factor, or combination of risk factors, may cause results to differ materially from those contained in any forward-looking statement. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements. We do not undertake any obligation to update these statements to reflect events or circumstances occurring after the date this 10-Q is filed. In addition, this discussion and analysis should be read in conjunction with our unaudited condensed financial statements and notes thereto included in this 10-Q and the audited condensed financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025 (the "2024 Form 10-K"). Operating results are not necessarily indicative of results that may occur in future periods.

Introduction and Overview

We are a clinical stage biotechnology company developing regenerative medicines to address unmet medical needs. Our lead investigational product is laromestrocel. Longeveron received notice from the World Health Organization ("WHO") on February 13, 2025 that the name "laromestrocel" for our Lomecel-B™ product has been adopted by the WHO and published in the International Nonproprietary Names (INN) list 132. Following that notice, we adopted referring to the investigational product as laromestrocel, and will continue to refer to the investigational product formerly referred to as Lomecel-B™ as laromestrocel on an ongoing basis.

Laromestrocel is a proprietary, scalable, allogeneic cellular therapy that has multiple modes of action that include pro-vascular, pro-regenerative, and anti-inflammatory mechanisms, promoting tissue repair and healing with broad potential applications across a spectrum of disease areas. We are currently pursuing four pipeline indications: Hypoplastic Left Heart Syndrome ("HLHS"), Alzheimer's disease ("AD"), pediatric Dilated Cardiomyopathy ("DCM") and Aging-related Frailty. Our mission is to continue to advance the development and regulatory approval of laromestrocel and make it available to all the patients who may need it.

Financial Overview.Since inception, we have primarily been engaged in organizational activities, including raising capital, and research and development activities. We do not yet have a product that has been approved by the FDA, and have only generated revenues from grants, the Bahamas Registry Trials and contract manufacturing. We have not yet achieved profitable operations or generated positive cash flows from operations. We have incurred recurring losses from operations since our inception, and as of June 30, 2025 we had an accumulated deficit of $119.6 million. We expect to continue to generate operating losses for the foreseeable future.

Cash and cash equivalents as of June 30, 2025 were $10.3 million. As a result of the recently completed financing referenced in Note 13, Subsequent Events, we currently anticipate our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2026 based on our current operating budget and cash flow forecast. We have been and will remain focused on prudent and efficient capital allocation strategies to advance our development programs, which we believe are highly cost efficient, both intrinsically and relative to other development programs. Following a successful Type C meeting with the FDA in August 2024 with respect to the HLHS regulatory pathway, we have begun ramping up our BLA enabling activities. We currently anticipate a potential BLA filing with the FDA in late 2026 if the current ELPIS II trial in HLHS is successful. With the significant opportunity presented with a potential BLA filing, our operating expenses and capital expenditure requirements are currently expected to increase throughout the remainder of calendar 2025 and in 2026 in large part to address CMC (Chemistry, Manufacturing, and Controls) and manufacturing readiness. We intend to seek additional financing opportunities, capital raises, as well as non-dilutive funding options to support our operating plans. Additionally, following a positive Type B meeting with the U.S. FDA in March 2025 with respect to the Alzheimer's disease regulatory pathway, we are focused on seeking partnership opportunities and/or non-dilutive funding for the Alzheimer's disease program. There can be no assurance we will be able to attain future financing at terms favorable to us or at all. In the event we are unable to attain the financing needed, we will need to materially revise our current operational plans.

The Company has prepared a cash flow forecast which indicates that it does not have sufficient cash to meet its minimum expenditure commitments for one year from the date these financial statements are available to be issued and therefore needs to raise additional funds to continue as a going concern. As a result, there is substantial doubt about the Company's ability to continue as a going concern.

Operational Overview.With respect to HLHS, we are exploring the possibility that laromestrocel, when administered directly to the myocardium of affected infants, can improve outcomes in this devastating rare pediatric disease. The standard of care in HLHS is a series of three heart surgeries (staged surgical palliation) that reconfigures the single right ventricle to support system circulation. Despite these life-saving surgical interventions, it is estimated that only 50 to 60 percent of affected individuals survive until adolescence. The pro-vascular, pro-regenerative and anti-inflammatory properties of laromestrocel may improve the function of the right ventricle in these infants. A previous Longeveron Phase 1 open-label study ("ELPIS I") indicated that such a benefit may exist when outcomes were compared to historical controls. Longeveron is currently conducting a controlled study ("ELPIS II") to determine the actual benefit of laromestrocel in these patients.

As of August 8, 2025, we have completed five U.S. clinical studies of laromestrocel: Phase 1 AD, Phase 1 HLHS, Phase 1/2 Aging-related Frailty ("HERA Trial"), Phase 2a AD ("CLEAR MIND Trial"), and Phase 2b Aging-related Frailty. We currently have one fully enrolled, ongoing clinical trial: Phase 2b HLHS ("ELPIS II" trial). Additionally, we sponsor a registry in The Bahamas under the approval and authority of the National Stem Cell Ethics Committee. The Bahamas Registry Trials may administer laromestrocel to eligible participants at private clinics in Nassau for a variety of indications. While laromestrocel is considered an investigational product in The Bahamas, under the approval terms from the National Stem Cell Ethics Committee, we are permitted to charge a fee to participate in the Registry Trial.

Since our founding in 2014, we have focused the majority of our time and resources on the following: organizing and staffing our company, building, staffing and equipping a cGMP manufacturing facility with research and development labs, business planning, raising capital, establishing our intellectual property portfolio, generating clinical safety and efficacy data in our selected disease conditions and indications, and developing and expanding our manufacturing processes and capabilities.

We manufacture our own product candidates for early-phase clinical trials and have initiated enhancements to our Chemistry, Manufacturing and Controls (CMC) infrastructure to support future Biologics License Application (BLA) submissions. These efforts include planning for process and analytical method validation as well as commercial production readiness. As part of our ongoing preparations for a potential BLA submission for our lead investigational product candidate for HLHS, we have made a strategic decision to pursue commercial manufacturing through a third-party contract development and manufacturing organization (CDMO), rather than renovating our existing Miami facility for commercial-scale production. This decision was based on a comprehensive evaluation of multiple factors, including cost, timeline feasibility, and scalability. We believe this approach offers a more cost-effective and timely path to support our BLA submission and potential commercial launch. Our Miami manufacturing facility includes eight clean rooms, two research and development laboratories, and warehouse and storage space. This facility will continue to support clinical development, research and early-phase manufacturing for our current and future clinical trials. We have supply contracts with multiple third parties for fresh bone marrow, which we use to produce our product candidate for clinical testing and research and development. From time to time, we enter into contract development and manufacturing contracts or arrangements with third parties who seek to utilize our product development capabilities.

Since the time that we became a publicly traded company in February 2021, we have sold 12,686,240 shares of Class A common stock through our IPO and subsequent follow-on public and private equity offerings and transactions. Additionally, as of June 30, 2025, warrants exercisable for an aggregate of up to 6,802,668 shares of a Company's Class A common stock remain outstanding at exercise prices ranging from $2.35 per share to $175.00 per share.

When appropriate funding opportunities arise, we routinely apply for grant funding to support our ongoing research and since 2016 we have received approximately $16.3 million in grant awards ($11.5 million of which has been directly awarded to us and is recognized as revenue when the performance obligations are met) from the National Institute on Aging ("NIA") of the National Institutes of Health ("NIH"), the National Heart Lung and Blood Institute ("NHLBI") of the NIH, the Alzheimer's Association, the Maryland Stem Cell Research Fund ("MSCRF") of the Maryland Technology Development Corporation, or TEDCO, and the XPRIZE Foundation, Inc. On May 12, 2025 we announced our selection as a semi-finalist team and recipient of a $250,000 Milestone 1 Award in the XPRIZE Healthspan competition, a seven-year, $101 million global competition to identify therapeutic approaches to increase human health span.

HLHS

Our HLHS program is focused on the potential clinical benefits of laromestrocel as an adjunct therapeutic to standard-of-care HLHS surgery. HLHS is a rare and devastating congenital heart defect in which the left ventricle is severely underdeveloped. As such, babies born with this condition die shortly after birth without undergoing a complex series of reconstructive heart surgeries. Despite the availability of life-saving surgical interventions, clinical studies show that only 50 to 60 percent of affected individuals survive to adolescence. Early clinical study data shows the potential survival benefit of laromestrocel for HLHS patients and supports Longeveron's belief that these data show the potential to alter the treatment landscape for patients with HLHS. We have completed a Phase 1 open-label study ("ELPIS I")1that supported the safety and tolerability of laromestrocel for HLHS, when directly injected into

the functional right ventricle ("RV") during the second-stage standard-of-care surgery (adding minimal additional time to the surgical procedure). Preliminary data revealed that several indices of right ventricular function show suggestions of either improvement or prevention of deterioration over one year following surgery. Heart transplant-free survival for patients who received laromestrocel intracardiac injection is favorable as compared to historical controls for survival. The ELPIS I trial showed 100 percent transplant-free survival in children up to 5 years after receiving laromestrocel, compared to a 20 percent mortality rate observed from historical control data. The improvement in HLHS survival following the Phase 1 ELPIS I clinical trial resulted in scientific presentations at the American Heart Association ("AHA") in November 2023 and Congenital Heart Surgeons' Society's 51st Annual Meeting in October 2024.

Based on these findings, the U.S. Food and Drug Administration (the "FDA") granted laromestrocel Rare Pediatric Disease ("RPD") Designation, Orphan Drug Designation ("ODD"), and Fast Track Designation for treatment of infants with HLHS. On September 3, 2024, Longeveron announced a positive Type C meeting with the FDA supporting the advancement of laromestrocel. Longeveron is currently conducting a controlled Phase 2b trial ("ELPIS II") to compare the effects of laromestrocel as an adjunct therapeutic versus standard-of-care (HLHS surgery alone). We announced full enrollment of ELPIS II on June 24, 2025. While it is hard to predict study outcome due to the inherent risk associated with clinical trials, our plans are centered on a successful outcome, which could add to the clinical data suggesting the clinical benefit of laromestrocel as part of standard-of-care treatment in HLHS patients.

As a result of the Type C meeting with the FDA, we reached foundational alignment on the registrational path to pursue traditional approval for laromestrocel for treatment of HLHS, based on the proposed clinical development program, which includes the ongoing Phase 2b ELPIS II study as the pivotal study to provide primary evidence of effectiveness. We anticipate top-line trial results for ELPIS II in the third quarter of 2026. We currently anticipate a potential BLA filing with the FDA in late 2026 if the current ELPIS II trial in HLHS is successful.

Alzheimer's Disease

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

The study demonstrated positive results. The established safety profile of laromestrocel for single and multiple dosing regimens was demonstrated in study data that showed no incidence of hypersensitivity or infusion-related reactions, there were no cases of amyloid-related imaging abnormalities (ARIA), and all laromestrocel treatment groups met the safety primary endpoint and showed slowing/prevention of disease worsening relative to placebo. There were statistically significant improvements in the secondary efficacy endpoint, composite AD score ("CADS") for both the low-dose laromestrocel group and the pooled treatment groups compared to placebo. Other doses also indicated promising results in slowing/prevention of disease worsening. Additionally, a statistically significant improvement versus placebo was observed in the Montreal cognitive assessment ("MoCA") and in the activity of daily living observed by a caregiver and measured by Alzheimer's disease Cooperative Study Activities of Daily Living ("ADCS-ADL"). The study indicated potential preservation of the brain volumes in some but not all AD related areas of the brain 39 weeks after treatment commenced. Brain magnetic resonance imaging ("MRI") results demonstrated a 48% reduction in whole brain volume loss, 62% reduction in hippocampal volume loss, and potential improvement in neuroinflammation in some but not all brain regions via diffusion tensor imaging (DTI).

The results of the CLEAR MIND trial were presented in the Featured Research Session at the 2024 Alzheimer's Association International Conference ("AAIC") in July 2024. The brain volume results measured by MRI results from this trial also were presented at the poster presentation at AAIC. These findings support both the safety and potential therapeutic benefit of laromestrocel in managing mild AD, and we believe lay the groundwork for subsequent trials in this indication. Based on these results, the FDA granted Regenerative Medicine Advanced Therapeutics (RMAT) Designation on July 9, 2024, and Fast Track designation on July 17, 2024, to laromestrocel for the treatment of mild AD.

Additional data from the CLEAR MIND trial was presented as a late breaking poster presentation at the Clinical Trials on Alzheimer's Disease Conference ("CTAD24") in October 2024 in Madrid, Spain.

On March 10, 2025, the results of the CLEAR MIND trial were published in Nature Medicine, a premier peer-reviewed medical and scientific journal.

Based on the totality of the evidence, the FDA granted our request for a Type B meeting. On March 20, 2025, Longeveron announced a positive Type B Meeting with the FDA supporting the advancement of laromestrocel as a potential treatment for mild AD. As a result of the Type B meeting, we reached foundational alignment with the FDA on the overall study design for a proposed single, pivotal, seamless adaptive Phase 2/3 clinical trial, including proposed AD patient population, proposed placebo control, laromestrocel dose selection and frequency, trial duration, and trial endpoints. To accelerate the pathway to potential approval of laromestrocel for the treatment of mild AD, the FDA agreed to consider a BLA based on positive interim trial results from the planned single study. Our objective is to forge strategic collaborations and/or partnerships for the advancement of laromestrocel in addressing AD.

Pediatric Dilated Cardiomyopathy (DCM)

DCM occurs when the muscles in one of more of the heart chambers become enlarged or stretched (dilated). The other chambers of the heart need to work harder to compensate for the affected chambers, and may also become dilated and enlarged. As the condition progresses, the heart becomes weaker, and it becomes more difficult to pump blood through the body. This can lead to congestive heart failure causing a build-up of fluid in the lungs, liver, abdomen, and lower legs. In the majority of cases, the exact cause of DCM cannot be determined (idiopathic cardiomyopathy).

Pediatric cardiomyopathies affect at least 100,000 children worldwide. DCM is the most common form of cardiomyopathy in children. About 50 to 60 percent of all pediatric cardiomyopathy cases are diagnosed as dilated. According to the Pediatric Cardiomyopathy Registry, DCM is reportedly more common in boys than girls. Although all age groups are affected, studies show that DCM is more common in infants (before age 1) than in older children. Current treatment for DCM focuses on managing symptoms, improving heart function, and preventing complications rather than addressing the underlying cause or causes. Many therapeutic agents with known efficacy in adults lack the same evidence in children.

On July 8, 2025, the company announced that the FDA approved the Investigational New Drug (IND) application for its stem cell therapy laromestrocel as a potential treatment for pediatric Dilated Cardiomyopathy (DCM). The accepted IND application provides for moving directly to a single Phase 2 pivotal registration clinical trial in the first half of 2026, subject to obtaining necessary financing.

Aging-related Frailty

Life expectancy has substantially increased over the past century due to medical and public health advancements. However, this longevity increase has not been paralleled by health span - the period of time one can expect to live in relatively good health and independence. For many developed and developing countries, health span lags life expectancy by over a decade. This has placed tremendous strain on healthcare systems in the management of aging-related ailments and presents additional socioeconomic consequences due to patient decreased independence and quality-of-life. Since these strains continue to increase with demographic shifts towards an increasingly older population, improving health span has become a priority for health agencies, such as the National Institute on Aging ("NIA") of the National Institutes of Health ("NIH"), the Japanese Pharmaceuticals and Medical Devices Agency ("PMDA"), and the European Medicines Agency ("EMA"). As we age, we experience a decline in our own stem cells, a decrease in immune system function (known as "immunosenescence"), diminished blood vessel functioning, chronic inflammation (known as "inflammaging"), and other aging-related alterations that affect biological functioning. We are currently not active with Aging-related Frailty following our decision to discontinue clinical trial activities in Japan in 2024.

Summary of Clinical Development Strategy

Our core strategy is to become a world-leading regenerative medicine company through the development, approval, and commercialization of novel cell therapy products for unmet medical needs, with a focus on HLHS. Key elements are as follows.

Clinical Development Pipeline in 2025

We are currently in clinical development of a single product, laromestrocelfor three potential indications:

Figure 1: Laromestrocel clinical development pipeline

* Pivotal Phase 2b ELPIS II study; enrollment completed June 24, 2025

** Not currently active for 2025

*** IND approved by FDA in late June 2025; The accepted IND application provides for moving directly to a single Phase 2 pivotal registrational clinical trial

Hypoplastic Left Heart Syndrome (HLHS). The FDA granted laromestrocel for the treatment of HLHS a Rare Pediatric Disease ("RPD") Designation (on November 8, 2021), Orphan Drug Designation ("ODD") (on December 2, 2021), and Fast Track Designation (on August 24, 2022). HLHS is a rare congenital heart condition affecting approximately 1,000 newborns in the US annually. HLHS is a birth defect that affects normal blood flow through the heart. As the baby develops during pregnancy, the left side of the heart does not form correctly so that babies are born with an underdeveloped or absent left ventricle. It is one type of congenital heart defect present at birth. Because a baby with this defect needs surgery or other procedures soon after birth, HLHS is considered a critical congenital heart defect. To prevent certain death shortly after birth, these babies undergo a series of three heart surgeries (staged surgical palliation) that reconfigures the single right ventricle to support systemic circulation. Despite these life-saving surgeries, HLHS patients nevertheless still have high early mortality and morbidity rates due primarily to heart failure.

We are currently conducting an ongoing Phase 2b clinical trial (ELPIS II) under FDA IND 17677. ELPIS II is a multi-center, randomized, double-blind, controlled clinical trial designed to evaluate laromestrocel as an adjunct therapy to the standard-of-care second-stage HLHS heart reconstructive surgery which is typically performed at 4-6 months after birth. The primary objective is to evaluate change in right ventricular ejection fraction after laromestrocel treatment versus standard-of-care surgery alone (38 subjects total: 19 per arm). This trial has reached full enrollment and is funded in part by the NHLBI/NIH. We anticipate top-line trial results in the third quarter of 2026.

ELPIS II is a next-step trial to our completed 10-patient open-label Phase 1 trial (ELPIS I) under the same IND. This Phase 1 trial was designed to evaluate the safety and tolerability of laromestrocel as an adjunct to the second-stage HLHS surgery, and to obtain preliminary evidence of laromestrocel effect to support a next-phase trial. The primary safety endpoint was met: no major adverse cardiac events ("MACE") or treatment-related infections during the first month post-treatment, and no triggering of stopping rules. Furthermore, fluid-based and imaging biomarker data supported multiple potentially relevant mechanisms-of-action of laromestrocel, and the potential to improve post-surgical heart function.

All ELPIS I patients had completed long-term follow-up, and 100% 5-years post-Glenn survival data were presented by Principal Investigator Dr. Sunjay Kaushal, Cardiovascular and Thoracic Surgery, University of Nevada, Las Vegas at American Heart Association ("AHA") in November 2023 and Congenital Heart Surgeons' Society's 51st Annual Meeting in October 2024.

We have filed patent applications relating to the administration of laromestrocel for treating HLHS in Australia, the Bahamas, Canada, China, the European Patent Office, Japan, Hong Kong, South Korea, Taiwan, and the United States.

Alzheimer's disease. AD, a devastating neurologic disease leading to cognitive decline, currently has very limited therapeutic options. An estimated 6.7 million Americans aged 65 and older have AD, and this number is projected to more than double by 2060. Laromestrocel treated patients showed an overall slowing/prevention of disease worsening compared to placebo in the completed Phase 2a study (CLEAR MIND) as previously detailed in this report and met its primary endpoint of safety. These results are consistent with those of our earlier Phase I study2. Based on these results, in July 2024, the FDA granted RMAT designation and Fast Track designation to laromestrocel for the treatment of mild AD. We believe laromestrocel is the only product candidate to be granted RMAT designation for mild AD to date. We intend to forge strategic collaborations, and/or partnerships for the advancement of laromestrocel in addressing AD.

[2]Mark Brody, Marc Agronin, Brad J. Herskowitz, Susan Y. Bookheimer, Gary W. Small, Benjamin Hitchinson, Kevin Ramdas, Tyler Wishard, Katalina Fernández McInerney, Bruno Vellas, Felipe Sierra, Zhijie Jiang, Lisa McClain-Moss, Carmen Perez, Ana Fuquay, Savannah Rodriguez, Joshua M. Hare, Anthony A. Oliva Jr., Bernard Baumel. "Results and insights from a phase I clinical trial of Lomecel-B™ for Alzheimer's disease" (2023) Alzheimer's & Dementia: The Journal of the Alzheimer's Association 19:261-273.

We have filed patent applications relating to the treatment of AD using laromestrocel in Australia, the Bahamas, Canada, China, the European Patent Office, Hong Kong, Israel, Japan, New Zealand, South Korea, Singapore, South Africa, and the United States. We have also filed another family of patent applications relating to improving Brain Architecture in Alzheimer's disease using laromestrocel in the Bahamas, Taiwan, in addition to a PCT application.

Aging-related Frailty. Aging-related Frailty is a life-threatening geriatric condition that disproportionately increases risks for poor clinical outcomes from disease and injury. While the definition of Aging-related Frailty lacks consensus, would be a new indication from a regulatory standpoint, and has no approved pharmaceutical or biologic treatments, there are a number of companies now working to develop potential therapeutics for this unmet medical need.

We have previously completed two U.S. clinical trials under FDA IND 16644. One is a multi-center, randomized, placebo-controlled Phase 2b trial which showed that a single infusion of laromestrocel significantly improved 6-Minute Walk Test ("6MWT") distance 9 months after infusion (although results were inconclusive at six months after infusion), and also showed a dose-dependent increase in 6MWT distance 6 months after infusion. The second is a multi-center, randomized, placebo-controlled Phase 1/2 trial ("HERA Trial") intended primarily to evaluate safety, and explore the effect laromestrocel may have on specific biomarkers of immune system function in older, frail individuals receiving the high dose influenza vaccine, as well as to evaluate the potential effects of laromestrocel on signs and symptoms of Aging Frailty. Results from this study showed that laromestrocel was generally safe and well tolerated in patients with Aging-related Frailty. Additionally, hemagglutinin inhibition ("HAI") assay results in the laromestrocel and placebo groups to influenza were not statistically different, indicating laromestrocel does not suppress the immune system.

We have filed patent applications relating to the administration of laromestrocel for Aging-related Frailty in Australia, Canada, China, the European Patent Office, Hong Kong, Israel, Japan, Singapore, South Korea, New Zealand, South Africa, Taiwan, the Bahamas and the United States.

Pediatric Dilated Cardiomyopathy. DCM is a rare and life-threatening cardiovascular condition with unmet medical needs. DCM is characterized by dilation and impaired systolic function of the left ventricle or both ventricles, typically in the absence of ischemia, abnormal loading conditions, or physiologic insult (e.g., sepsis). Diagnostic criteria for DCM includes reduced measures of ventricular function combined with increased ventricular volumes adjusted for body size on cardiac imaging (left ventricular end-diastolic diameter (LVEDD) and left ventricular end-systolic diameter (LVESD) z-scores > 2). Treatments for DCM aim to ameliorate symptoms, reduce progression of disease, and prevent life-threatening arrhythmias. Treatment for DCM remains a complex challenge, marked by several limitations.

Clinical data to date with laromestrocel (a MSC therapy) indicates an acceptable safety profile in various disease indications administered via either IV or intramyocardial injection. Additionally, the safety profile from MSC therapies in general has been acceptable, supported by the literature review showing that MSC therapy has been evaluated in over one thousand clinical trials globally, with a favorable safety profile across numerous disease indications. DCM is associated with the loss of cardiomyocytes and with the replacement of lost cardiomyocytes by noncontractile fibrous tissue. Results from preclinical and clinical trials highlight the potential of MSC therapy to promote cardiomyogenesis, reduce inflammation and fibrosis, and support neovascularization. In adults with both ischemic cardiomyopathy and nonischemic dilated cardiomyopathy (DCM), MSC therapies have demonstrated improved LV function, functional status, and quality of life (QoL). Pediatric patients with DCM may be ideal candidates for MSC therapy because their hearts, including cardiomyocytes and progenitor cells, are more responsive to the signals from transplanted stem cells. Cell therapies have shown positive outcomes in DCM and other conditions, but further research is needed to confirm long-term safety and efficacy.

Given the unmet medical need in DCM, accrued acceptable safety profile of laromestrocel in prior human experience, and literature review evidence suggesting a potential benefit in DCM, the Sponsor considers it is appropriate to assess the safety and efficacy of laromestrocel in clinical trial setting in pediatric participants with DCM aged from 6 months and beyond.

We are planning to initiate a Phase 2 pivotal registrational clinical trial for DCM in the first half of 2026, subject to obtaining necessary financing.

Components of Our Results of Operations

Revenue

We have generated revenue from three sources:

Cost of Revenues

We record cost of revenues based on expenses directly related to revenue. For grants we record allocated expenses for research and development costs to a grant as a cost of revenues. For the clinical trial revenue, directly related expenses for that program are allocated and accrued as incurred. These expenses are similar to those described under "Research and Development Expenses" below. For contract manufacturing revenue, directly related expenses for the services and facilities provided under the contract are recorded as cost of revenues.

Research and Development Expenses

Research and development costs are charged to expenses when incurred in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 730 Research and Development. ASC 730 addresses the proper accounting and reporting for research and development costs. It identifies:

Research and development include costs such as clinical trial expenses, contracted research and license agreement fees with no alternative future use, supplies and materials, salaries, equity-based compensation, employee benefits, property and equipment depreciation and allocation of various corporate costs. We accrue for costs incurred by external service providers, including contract research organizations ("CROs") and clinical investigators, based on estimates of service performed and costs incurred. These estimates include the level of services performed by the third parties, subject enrollment in clinical trials, administrative costs incurred by the third parties, and other indicators of the services completed. Based on the timing of amounts invoiced by service providers, we may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as the related services are rendered.

We currently do not carry any inventory for our product candidates, as we have yet to launch a product for commercial distribution. Historically our operations have focused on conducting clinical trials, product research and development efforts, and improving and refining our manufacturing processes, and accordingly, manufactured clinical doses of product candidates were expensed as incurred, consistent with the accounting for all other research and development costs. Once we begin commercial distribution, all newly manufactured approved products will be allocated either for use in commercial distribution, which will be carried as inventory and not expensed, or for research and development efforts, which will continue to be expensed as incurred.

We expect that our research and development expenses will continue to be significant in the future as we increase our headcount to support increased research and development activities relating to our clinical programs, as well as incur additional expenses related to our clinical trials.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and other related costs, including equity-based compensation, for personnel in our executive, finance, business development and administrative functions. General and administrative expenses also include public company related expenses; legal fees relating to corporate matters; insurance costs; professional fees for accounting, auditing, tax and consulting services; travel expenses; and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

Other Income and Expenses

Interest income consists of interest earned on cash equivalents and marketable securities. We expect our interest income to vary in conjunction with changes in our monthly cash and marketable securities balances. Other income consists of funds earned that are not part of our normal operations. In past years they have primarily been a result of either a higher balance of cash compared to a previous year or tax refunds received for social security taxes as part of a research and development tax credit program.

Income Taxes

No provision for income taxes has been recorded for the three and six months ended June 30, 2025 and 2024. We may incur income taxes in the future if we have earnings. At this time, the Company has not evaluated the impact of any future profits.

RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2025 AND 2024

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024, together with the changes in those items in dollars (in thousands):

Revenues, Cost of Revenues and Gross Profit:Revenues for the three months ended June 30, 2025 and 2024 were 0.3 million and $0.5 million, respectively. 2025 revenues decreased 0.2 million, or 32%, when compared to 2024 driven primarily by a reduced demand for contract manufacturing services.

Clinical trial revenue, which is derived from the Bahamas Registry Trial, for each of the three months ended June 30, 2025 and 2024 was $0.3 million. Contract manufacturing revenue for the three months ended June 30, 2025 was $18,000 from our manufacturing services contract, which is a decrease of close to $0.2 million or 90%, when compared to the $0.2 million in contract manufacturing revenue for the three months ended June 30, 2024. This decrease was driven by reduced demand for contract manufacturing services from our third-party client.

Related cost of revenues were $0.2 million and $0.1 million for the three months ended June 30, 2025 and 2024, respectively. This resulted in a gross profit of approximately $0.1 million for the three months ended June 30, 2025, a decrease of $0.2 million, or 58%, when compared with a gross profit of $0.3 million for 2024.

General and Administrative Expense:General and administrative expenses for the three months ended June 30, 2025 increased to approximately $2.6 million, compared to 2.1 million for the same period in 2024. The increase of approximately $0.5 million, or 22% was primarily related to an increase of $0.3 million in personnel and related costs in 2025, including equity-based compensation, and $0.2 million in legal expenses.

Research and Development Expenses:Research and development expenses for the three months ended June 30, 2025 increased to approximately $3.0 million, from approximately $1.7 million for the same period in 2024. The increase of $1.2 million, or 72% was primarily driven by a $0.9 million increase in personnel and related costs, including equity-based compensation, and a $0.2 million increase in clinical trial expense, both primarily in support of ongoing CMC and manufacturing readiness activities as part of our BLA enabling efforts.

Research and development expenses consisted primarily of the following items (in thousands):

Other Income (Expense):Other income for the three months ended June 30, 2025 was $0.4 million, primarily consisting of $0.3 million received as a recipient of a Milestone 1 Award in the XPRIZE Healthspan competition and $0.1 million of interest earned on money market funds. Other income for the three months ended June 30, 2024 was less than $0.1 million as a result of interest earned on money market funds.

Net Loss:Net loss increased to approximately $5.0 million for the three months ended June 30, 2025 from a net loss of $3.4 million for the same period in 2024. This increase of $1.6 million, or 47% was due to the factors outlined above.

COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024, together with the changes in those items in dollars (in thousands):

Revenues, Cost of Revenues and Gross Profit:Revenues for the six months ended June 30, 2025 and 2024 were $0.7 million and $1.0 million, respectively. This represents a decrease of $0.3 million, or 31% in 2025 compared to 2024, driven primarily by a decreased participant demand for our Bahamas Registry Trial and reduced demand for contract manufacturing services from our third-party client.

Clinical trial revenue, which is derived from the Bahamas Registry Trial, for the six months ended June 30, 2025 and 2024 was $0.6 million and $0.8 million, respectively. Clinical trial revenue for the six months ended June 30, 2025 decreased by $0.2 million, or 31%, when compared to 2024 as a result of decreased participant demand. Contract manufacturing revenue for the six months ended June 30, 2025 was $0.1 million from our manufacturing services contract, which is a decrease of less than $0.1 million, or 35% when compared to the $0.2 million in contract manufacturing revenue for the six months ended June 30, 2024. This decrease was driven by reduced demand for contract manufacturing services from our third-party client.

Related cost of revenues was $0.3 million for each of the six-month periods ended June 30, 2025 and 2024. This resulted in a gross profit of approximately $0.4 million for the six months ended June 30, 2025, a decrease of $0.3 million, or 37%, when compared with a gross profit of $0.7 million for 2024.

General and Administrative Expense:General and administrative expenses for the six months ended June 30, 2025 increased to approximately $5.5 million, compared to $4.3 million for the same period in 2024. The increase of approximately $1.2 million, or 28%, was primarily related to an increase in personnel and related costs in 2025, including equity-based compensation.

Research and Development Expenses:Research and development expenses for the six months ended June 30, 2025 increased to approximately $5.5 million, from approximately $3.9 million for the same period in 2024. The increase of $1.6 million, or 39%, was primarily driven by a $1.3 million increase in personnel and related costs, including equity-based compensation, in support of ongoing CMC and manufacturing readiness activities as part of our BLA enabling efforts and a $0.2 million increase in amortization expense related to patent costs, partially offset by $0.3 million in lower clinical trial expense resulting from the discontinuation of activities relating to the Aging-related frailty clinical trial following our decision to discontinue trial activities in Japan.

Research and development expenses consisted primarily of the following items (in thousands):

Other Income (Expense):Other income for the six months ended June 30, 2025 was $0.5 million, primarily consisting of $0.3 million received as a recipient of a Milestone 1 Award in the XPRIZE Healthspan competition and $ 0.3 million interest earned on money market funds. Other income for the six months ended June 30, 2024 was $0.1 million as result of interest earned on money market funds and marketable securities.

Net Loss:Net loss increased to approximately $10.0 million for the six months ended June 30, 2025 from a net loss of $7.5 million for the same period in 2024. The increase in the net loss of $2.5 million, or 34%, was for the reasons outlined above.

Cash Flows

The following table summarizes our sources and uses of cash for the period presented (in thousands):

Operating Activities.We have incurred losses since inception. Net cash used in operating activities for the six months ended June 30, 2025, was $8.3 million, consisting primarily of our net loss of $10.0 million and payments of $0.6 million in prepaid expenses and other assets. This was partially offset by non-cash expenses of $0.9 million for equity-based compensation expenses, $0.7 million for depreciation and amortization and $0.8 million for accounts payable and accrued expenses. Net cash used in operating activities for the six months ended June 30, 2024, was $7.7 million, consisting primarily of our net loss of $7.5 million and payments of $0.4 million in prepaid expenses and other assets, and $0.5 million for accrued expenses. This was partially offset by non-cash expenses of $0.5 million for equity-based compensation and $0.5 million for depreciation and amortization.

Investing Activities.Net cash used in investing activities for the six months ended June 30, 2025, was $0.4 million consisting primarily of purchases of property and equipment and intangible assets. Net cash used in investing activities for the six months ended June 30, 2024 was less than $0.1 million consisting primarily of the redemption of marketable securities, which was partially offset by purchases of property and equipment and intangible assets.

Financing Activities.Net cash used in financing activities for the six months ended June 30, 2025 was $0.2 million for the payment of taxes upon vesting of restricted stock units ("RSUs"). Net cash provided by financing activities for the six months ended June 30, 2024 was approximately $15.1 million for proceeds from the issuance of common stock of $4.7 million and warrants exercised of $10.3 million.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses as we advance the preclinical and clinical development of our programs. We expect that our sales, research and development and general and administrative costs will remain substantial in connection with conducting additional preclinical studies and clinical trials for our current and future programs and product candidates, contracting with CROs to support preclinical studies and clinical trials, expanding our intellectual property portfolio, and providing general and administrative support for our operations. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements, or other sources.

To date, we have financed our operations primarily through our IPO, registered and private placement equity financings, grant awards, and fees generated from the Bahamas Registry Trial and contract manufacturing services. Since we were formed, we have raised approximately $113.0 million in gross proceeds from the issuance of equity. At June 30, 2025, the Company had cash and cash equivalents of $10.3 million and working capital of approximately $8.0 million.

Cash and cash equivalents as of June 30, 2025 were $10.3 million. As a result of the recently completed financing referenced in Note 13, Subsequent Events, we currently anticipate our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2026 based on our current operating budget and cash flow forecast. We have been and will remain focused on prudent and efficient capital allocation strategies to advance our development programs, which we believe are highly cost efficient, both intrinsically and relative to other development programs. Following a successful Type C meeting with the FDA in August 2024 with respect to the HLHS regulatory pathway, we have begun ramping up our BLA enabling activities. We currently anticipate a potential BLA filing with the FDA in late 2026 if the current ELPIS II trial in HLHS is successful. With the significant opportunity presented with a potential BLA filing, our operating expenses and capital expenditure requirements are currently expected to increase throughout the remainder of calendar 2025 and in 2026 in large part to address CMC (Chemistry, Manufacturing, and Controls) and manufacturing readiness. We intend to seek additional financing opportunities, capital raises, as well as non-dilutive funding options to support our operating plans. Additionally, following a positive Type B meeting with the FDA in March 2025 with respect to the Alzheimer's disease regulatory pathway, we are focused on seeking partnership opportunities and/or non-dilutive funding for the Alzheimer's disease program. There can be no assurance we will be able to attain future financing at terms favorable to us or at all. In the event we are unable to attain the financing needed, we will need to materially revise our current operational plan.

Capital Raising Efforts

Since the time that we became a publicly traded company in February 2021, we have sold 12,686,240 shares of Class A common stock through our IPO and subsequent follow-on public and private equity offerings and transactions. Additionally, as of June 30, 2025, warrants exercisable for an aggregate of up to 6,802,668 shares of a Company's Class A common stock remain outstanding at exercise prices ranging from $2.35 per share to $175.00 per share.

Grant Awards

From inception through December 31, 2024, we have been awarded approximately $11.9 million in governmental and non-profit association grants, which have been used to fund our clinical trials, research and development, production and overhead. Grant awards are recognized as revenue, and depending on the funding mechanism, are deposited directly in our accounts as lump sums, which are staggered over a predetermined period or drawn down from a federal payment management system account for reimbursement of expenses incurred. Revenue recognition occurs when the grant-related expenses are incurred or supplies and materials are received. As of June 30, 2025, and December 31, 2024, the amount of unused grant funds that were available for us to draw was approximately $0 and approximately $0.1 million, respectively.

Terms and Conditions of Grant Awards

Governmental grant projects are typically divided into periods (e.g., a three-year grant may have three one-year periods), and the total amount awarded is divided according to the number of periods. At pre-specified time points, which are detailed in the grant award notifications, we are required to submit interim financial and scientific reports to the granting agency totaling funds spent, and in some cases, detailing the use of proceeds and progress made during the reporting period. After funding the initial period, the receipt of additional grant funds is contingent upon satisfactory submission of our interim reports to the granting agency.

In addition to governmental grants, the Company also receives awards from non-profit foundations through competitive application processes, where funding is typically distributed in stages as specific milestones are met.

Grant awards arise from submitting detailed research proposals to granting agencies and other organizations and winning a highly competitive and rigorous application review and process that is judged on the merits of the proposal. There are typically multiple applicants applying and competing for a finite amount of funds. As such we cannot be sure that we will be awarded grant funds in the future despite our past success in receiving such awards.

Funding Requirements

Our operating costs will continue to be substantial for the foreseeable future in connection with our ongoing activities. In past years we have been able to fund a large portion of our clinical programs and our administrative overhead with the use of grant funding.

Specifically, we will incur expenses to:

As indicated above, based on our current operating budget, cash flow forecast, and ramp up of BLA enabling activities, our operating expenses and capital expenditure requirements are expected to increase throughout the remainder of calendar 2025 and in 2026 in large part to address CMC and manufacturing readiness. We intend to seek additional financing opportunities, capital raises, as well as non-dilutive funding options to support our operating plans. There can be no assurance we will be able to attain future financing at terms favorable to us or at all.

Because of the numerous risks and uncertainties associated with research, development and commercialization of our product candidates, it is difficult to estimate with certainty the amount of our working capital requirements. Our future funding requirements will depend on many factors, including:

Further, our operating results may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans. Until such time, if ever, that we can generate product revenue sufficient to achieve profitability, we expect to finance our cash needs through a combination of equity offerings, debt financings, grant awards, collaboration agreements, other third-party funding, strategic alliances, licensing arrangements and marketing and distribution arrangements.

We currently have no credit facility or committed sources of capital. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through other third-party funding, collaboration agreements, strategic alliances, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our biologic drug development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

In order to meet our operational goals, we will need to obtain additional capital, which we will likely obtain through a variety of means, including through public or private equity, debt financings or other sources, including up-front payments and milestone payments from strategic collaborations. To the extent that we raise additional capital through the sale of convertible debt or equity securities, current stockholder ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect stockholder rights. Such financing will likely result in dilution to stockholders and may result in the imposition of debt covenants, increased fixed payment obligations or other restrictions that may affect our business. If we raise additional funds through up-front payments or milestone payments pursuant to strategic collaborations with third parties, we may have to relinquish valuable rights to our product candidates or grant licenses on terms that are not favorable to us. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

Contractual Obligations and Commitments

As of June 30, 2025, we have $1.2 million in operating lease obligations and no CRO payment obligations. We enter into contracts in the normal course of business with third-party contract organizations for clinical trials, preclinical studies, manufacturing and other services and products for operating purposes. These contracts generally provide for termination following a certain period after notice and therefore we believe that our non-cancelable obligations under these agreements are not material.

We have not included milestone or royalty payments or other contractual payment obligations if the timing and amount of such obligations are unknown or uncertain.

Critical Accounting Estimates

For a discussion of our critical accounting estimates, refer to "Management's Discussion and Analysis of Results of Operations and Financial Condition" in Part II, Item 7 and the notes to our financial statements in Part II, Item 8 of our 2024 Form 10-K. Seealso Note 2 to the condensed financial statements. There have been no material changes to our critical accounting estimates since the filing of our 2024 Form 10-K.

Emerging Growth Company Status

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act, or JOBS Act, which is a law intended to encourage funding of small businesses in the U.S. by easing many of the country's securities regulations, and we may take advantage of reduced reporting requirements that are otherwise applicable to public companies. Section 107 of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with those standards. We have elected to take advantage of the extended transition period for complying with new or revised accounting standards; and as a result of this election, our condensed financial statements may not be comparable to companies that comply with public company effective dates. The JOBS Act also exempts us from having to provide an auditor attestation of internal control over financial reporting under Sarbanes-Oxley Act Section 404(b).

We will remain an "emerging growth company" until the earliest of (1) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, (2) the last day of the fiscal year following the fifth anniversary of the completion of our IPO (i.e. December 31, 2026), (3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years or (4) the date on which we are deemed to be a large accelerated filer under the rules of the SEC, which generally is when a company has more than $700 million in market value of its reported class of stock held by non-affiliates and has been a public company for at least 12 months and have filed at least one Annual Report on Form 10-K.

Recent Accounting Pronouncements

A description of recent accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our unaudited condensed financial statements included in Item 1 of this 10-Q.