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

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.

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 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 is planned to be completed in the fourth quarter of 2025, as summarized below:

●

NfL biomarker analyses-Provide supportive evidence of NfL declines in participants from our ongoing NIH-sponsored compassionate-use EAPs. We met with the FDA in the second quarter of 2025 to review our statistical analysis plan for the EAP NfL biomarker analyses, during which the FDA provided constructive feedback on our proposed analyses methodology. NfL change will be analyzed following nine months of treatment (primary NfL analysis) and after six months of treatment (supportive NfL analysis). These analyses are planned to provide supportive data of the NfL change demonstrated in the HEALEY ALS Platform Trial double-blind period following six months of treatment with CNM-Au8.

●

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. The FDA has confirmed an additional Type C meeting with us to occur in the third quarter of 2025 to review the long-term survival benefit from CNM-Au8 30 mg treatment compared to concurrently randomized controls from another HEALEY ALS Platform Trial Regimen, assessing whether these data support filing of an NDA under an accelerated approval pathway. Assuming the NfL data from our ongoing EAP funded by a National Institutes of Health grant (the "ACT-EAP") is concordant with NfL results shown in the HEALEY ALS Platform Trial, we plan to submit an NDA by the end of 2025 under an accelerated approval pathway. We also plan to commence a confirmatory Phase 3 trial, RESTORE-ALS, in the first half of 2026, contingent on funding. 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).

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 the third quarter of 2025. We plan to work closely with regulatory health authorities from the FDA, European Medicines Agency and other international regulatory bodies, MS experts, and patient representatives to determine the proper path to advance CNM-Au8 into Phase 3 and potential future approval. The FDA has confirmed an end of Phase 2 meeting with us during the third quarter of 2025 to review results from the Phase 2 VISIONARY-MS trial and discuss a planned Phase 3 study focusing on cognition improvement as an adjunct to standard-of-care MS therapies, addressing a critical unmet medical need for people struggling with MS.

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

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.

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 approval 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 approval 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.

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 and six months ended June 30, 2025 and 2024 were as follows:

		Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)		2025				2024				Change				2025				2024				Change
Revenue:
Product revenue		$	1			$	64				(98	)%		$	65			$	108				(40	)%
Royalty revenue			26				27				(4	)%			43				56				(23	)%
Total revenue			27				91				(70	)%			108				164				(34	)%
Operating expenses:
Cost of revenue			-				18				*				20				34				(41	)%
Research and development			3,514				4,150				(15	)%			4,995				10,019				(50	)%
General and administrative			2,377				3,314				(28	)%			5,033				6,734				(25	)%
Total operating expenses			5,891				7,482				(21	)%			10,048				16,787				(40	)%
Loss from operations			(5,864	)			(7,391	)			(21	)%			(9,940	)			(16,623	)			(40	)%
Total other income (expense), net			(1,555	)			606				*				1,770				(1,242	)			*
Net loss		$	(7,419	)		$	(6,785	)			9	%		$	(8,170	)		$	(17,865	)			(54	)%

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 and six months ended June 30, 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.

Research and Development Expense

Research and development expense during the three and six months ended June 30, 2025 and 2024 was as follows:

		Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)		2025				2024				Change				2025				2024				Change
CNM-Au8:
Amyotrophic lateral sclerosis		$	1,468			$	610				141	%		$	2,811			$	1,380				104	%
Multiple sclerosis			164				69				138	%			189				161				17	%
Parkinsonʼs disease			-				2				*				-				2				*
Regulatory activities			130				122				7	%			260				462				(44	)%
General/pre-clinical/non-clinical			19				200				(91	)%			82				328				(75	)%
CNM-ZnAg			-				-				*				-				13				*
Unallocated:
Facilities			386				401				(4	)%			805				782				3	%
Depreciation			337				347				(3	)%			675				701				(4	)%
Manufacturing			187				422				(56	)%			270				661				(59	)%
Research			2				141				(99	)%			7				316				(98	)%
Equipment			14				35				(60	)%			28				64				(56	)%
Maintenance			32				17				88	%			64				37				73	%
Information technology			54				29				86	%			119				66				80	%
Other			79				30				163	%			104				59				76	%
Personnel			2,100				2,545				(17	)%			4,260				5,209				(18	)%
Stock-based compensation			600				903				(34	)%			1,546				1,780				(13	)%
Grant revenue as a reduction of research and development expense			(2,058	)			(1,723	)			19	%			(6,225	)			(2,002	)			211	%
Total research and development		$	3,514			$	4,150				(15	)%		$	4,995			$	10,019				(50	)%

*	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 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) an increase in expenses related to our MS clinical programs primarily due to an increase in expenses for our MS EAP which began enrollment in September 2024, partially offset by a decrease in expenses related to our REPAIR-MS clinical trial due to the conclusion of enrollment of the ongoing second dosing cohort, (C) an increase in expenses for regulatory activities during the three months ended June 30, 2025 related to our ongoing FDA discussions and NDA submission-related activities, with a decrease in expenses for regulatory activities during the six months ended June 30, 2025 primarily driven by lower expenses related to NDA submission-related activities in the first quarter of 2025 compared to the same period in 2024, 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 manufacturing expenses due to the conclusion of various clinical programs and (B) a decrease in expenses related to general research activities; partially offset by (D) an increase in information technology-related expenses and (F) an increase in other miscellaneous expenses;

(iii)

a decrease in personnel expenses, primarily due to cost-saving initiatives and a decrease in expenses for manufacturing personnel due to the conclusion of various clinical programs;

(iv)

a decrease 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 an increase in enrollment and study operations in the ACT-EAP which resulted in higher reimbursable expenses during the six months ended June 30, 2025, partially offset by a decrease in grant revenue related to our REPAIR-MS clinical trial due to the conclusion of enrollment of the ongoing second dosing cohort.

General and Administrative Expense

General and administrative expense during the three and six months ended June 30, 2025 and 2024 was as follows:

		Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)		2025				2024				Change				2025				2024				Change
Insurance		$	181			$	187				(3	)%		$	362			$	373				(3	)%
Legal			175				284				(38	)%			323				359				(10	)%
Finance and accounting			220				124				77	%			530				373				42	%
Public and investor relations			119				199				(40	)%			230				433				(47	)%
Facilities			31				31				0	%			61				63				(3	)%
Depreciation			29				67				(57	)%			95				133				(29	)%
Information technology			47				87				(46	)%			96				166				(42	)%
Personnel			788				1,044				(25	)%			1,620				2,140				(24	)%
Stock-based compensation			767				1,048				(27	)%			1,768				2,184				(19	)%
Grant revenue as a reduction of general and administrative expense			(65	)			(106	)			(39	)%			(228	)			(106	)			115	%
Other			85				349				(76	)%			176				616				(71	)%
Total general and administrative		$	2,377			$	3,314				(28	)%		$	5,033			$	6,734				(25	)%

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

(i)

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

(ii)

an increase in finance and accounting fees, primarily due to an increase in audit and tax fees and 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 information technology-related expenses;

(v)

a decrease in personnel expenses, primarily due to cost-saving initiatives;

(vi)

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

(vii)

a decrease in grant revenue related to the ACT-EAP during the three months ended June 30, 2025, recorded as a reduction to general and administrative expense, due to higher grant revenue during the three months ended June 30, 2024, as reimbursements for expenses incurred from September 2023 to March 2024 were not recognized until we entered into an agreement covering the first year of the ACT-EAP in April 2024 and grant recognition criteria were met; and an increase in grant revenue during the six months ended June 30, 2025 due to an increase in enrollment and study operations in the ACT-EAP which resulted in higher reimbursable expenses; and

(viii)

a decrease in other expenses during the three months ended June 30, 2025 due to a decrease in expenses related to lobbying activities, travel, meals, office, and other miscellaneous expenses.

Total Other Income (Expense), Net

Total other income (expense), net, during the three and six months ended June 30, 2025 and 2024 was as follows:

		Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)		2025				2024				Change				2025				2024				Change
Interest income		$	62			$	269				(77	)%		$	143			$	628				(77	)%
Interest expense			(679	)			(1,282	)			(47	)%			(1,287	)			(2,526	)			(49	)%
Change in fair value of common stock warrant liabilities			(515	)			1,568				*				1,995				259				670	%
Change in fair value of derivative liabilities			(439	)			-				*				708				-				*
Change in fair value of Clene Nanomedicine contingent earn-out liability			-				22				*				-				75				*
Change in fair value of Initial Stockholders contingent earn-out liability			-				3				*				-				10				*
Research and development tax credits and unrestricted grants			16				26				(38	)%			211				312				(32	)%
Total other income (expense), net		$	(1,555	)		$	606				*			$	1,770			$	(1,242	)			*

*	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 loss from the changes in fair value of the 2023 Avenue Warrant, Tranche A Warrants, and 2024 Common Warrants during the three months ended June 30, 2025, and a gain during the six months ended June 30, 2025. The changes in fair value were due to changes in price of our Common Stock on Nasdaq and updates in valuation model assumptions (see "Critical Accounting Estimates");

(iv)

a loss 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 June 30, 2025, and a gain during the six months ended June 30, 2025. The changes in fair value were due to changes in price of our Common Stock on Nasdaq and updates in 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 and six months ended June 30, 2024. The changes were due to changes in price of our Common Stock on Nasdaq and updates in valuation model assumptions; 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.

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 six months ended June 30, 2025 and 2024, respectively. As of June 30, 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 six months ended June 30, 2025 and 2024. We recorded other income of $40,000 and $40,000 for the six months ended June 30, 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 six months ended June 30, 2025 and 2024. Clene Netherlands had no taxable income or provision for income taxes for the six months ended June 30, 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 $192.1 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 $11.6 million from grants from various organizations; and

●

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

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 $5.9 million and $7.4 million for the three months ended June 30, 2025 and 2024, respectively; and $9.9 million and $16.6 million for the six months ended June 30, 2025 and 2024, respectively. Our accumulated deficit was $290.3 million and $282.1 million as of June 30, 2025 and December 31, 2024, respectively. Our cash and cash equivalents totaled $7.3 million and $12.2 million as of June 30, 2025 and December 31, 2024, respectively, and net cash used in operating activities was $9.8 million and $13.4 million for the six months ended June 30, 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 and six months ended June 30, 2025, we generated $2.3 million and $5.1 million, respectively, of gross proceeds from our equity distribution agreement and subsequent to June 30, 2025, we generated $1.9 million of gross proceeds from our equity distribution agreement and we raised $1.5 million from the issuance of senior secured convertible promissory notes. We have implemented cost-saving initiatives, including delaying and reducing certain research and development programs and commercialization efforts, reducing employee compensation, 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 $0.7 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.

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 $4.5 million of payments under operating lease obligations, and interest and principal repayment of notes payable and convertible notes payable of $18.3 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 six months ended June 30, 2025 and 2024 were as follows:

		Six Months Ended June 30,
(in thousands)		2025				2024
Net cash used in operating activities		$	(9,755	)		$	(13,438	)
Net cash provided by investing activities			-				6,319
Net cash provided by financing activities			4,806				9
Effect of foreign exchange rate changes on cash			79				(29	)
Net decrease in cash, cash equivalents and restricted cash		$	(4,870	)		$	(7,139	)

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 $9.8 million for the six months ended June 30, 2025, which resulted from a net loss of $8.2 million, adjusted for non-cash items totaling $2.2 million and a net change in operating assets and liabilities of $3.8 million. Significant non-cash items included: (i) depreciation expense of $0.8 million related to laboratory and office equipment and leasehold improvements, (ii) non-cash lease expense of $0.3 million, (iii) stock-based compensation expense of $3.3 million, (iv) accretion of debt discount of $0.5 million, (v) non-cash interest expense on notes payable of $24,000, (vi) a change in fair value of our common stock warrant liabilities of $2.0 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 $0.7 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 a decrease in accounts payable of $0.4 million due to the timing of vendor invoicing and payments, (B) an increase in prepaid expenses and other current assets of $0.8 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, partially offset by a decrease in prepaid clinical and CRO expenses related to the ACT-EAP, (C) a decrease in accrued liabilities of $2.3 million primarily due to a decrease in deferred grants and a decrease in other miscellaneous accrued liabilities, partially offset by an increase in accrued compensation and benefits, and (D) a decrease in operating lease obligations of $0.3 million.

Net cash used in operating activities was $13.4 million for the six months ended June 30, 2024, which resulted from a net loss of $17.9 million, adjusted for non-cash items totaling $5.4 million and a net change in operating assets and liabilities of $0.9 million. Significant non-cash items included: (i) depreciation expense of $0.8 million related to laboratory and office equipment and leasehold improvements, (ii) non-cash lease expense of $0.3 million, (iii) stock-based compensation expense of $4.0 million, (iv) accretion of debt discount of $0.8 million, (v) non-cash interest expense of $28,000, (vi) non-cash interest income on marketable securities of $0.2 million, (vii) a change in fair value of our common stock warrant liabilities of $0.3 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, and (viii) a change in fair value of the Clene Nanomedicine and Initial Stockholders Contingent Earn-outs of $0.1 million and $10,000, respectively, due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs. The net change in operating assets and liabilities was primarily attributable to: (A) a decrease in accounts receivable of $0.1 million and a decrease in accounts payable of $0.4 million due to the timing of vendor invoicing and payments, (B) an increase in prepaid expenses and other current assets of $2.5 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, (C) an increase in accrued liabilities of $2.2 million primarily due to increased accrued compensation and benefits and increased deferred grants, partially offset by a decrease in accrued CRO and clinical fees, and (D) a decrease in operating lease obligations of $0.3 million.

Investing Activities

We had no net cash provided by or used in investing activities for the six months ended June 30, 2025. Net cash provided by investing activities was $6.3 million for the six months ended June 30, 2024, which consisted of proceeds from maturities of marketable securities of $12.5 million, partially offset by purchases of marketable securities of $6.2 million and purchases of property and equipment of $13,000.

Financing Activities

Net cash provided by financing activities was $4.8 million for the six months ended June 30, 2025, which consisted of proceeds from the issuance of common stock of $5.0 million, partially offset by payments of notes payable of $0.2 million. Net cash used in financing activities was $9,000 for the six months ended June 30, 2024, which consisted of proceeds from the exercise of stock options of $36,000, partially offset by payments of finance lease obligations of $27,000.

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 and six months ended June 30, 2025, we sold 758,990 and 1,337,195 shares of Common Stock, respectively, under our April 2022 equity distribution agreement (the "2022 ATM Agreement") and April 2025 equity distribution agreement (the "2025 ATM Agreement," and collectively with the 2022 ATM Agreement, the "ATM Agreements") with Canaccord, generated gross proceeds of $2.3 million and $5.1 million, respectively, and paid commissions of $35,000 and $0.1 million, respectively. We did not effect any sales during any of the other periods presented herein. 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. 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.

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.

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 June 30, 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 June 30, 2025 and December 31, 2024, with a carrying value of $9.0 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 and six months ended June 30, 2025, the change in fair value of the SSCPN Derivative Liabilities resulted in a loss of $0.4 million and a gain of $0.7 million, respectively. 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:

		June 30,				December 31,
		2025				2024
Expected stock price volatility			104.20	%			101.50	%
Risk-free interest rate			4.00% - 4.30	%			4.20	%
Expected dividend yield			0.00	%			0.00	%
Expected term (in years)			0.33 - 0.97				0.50 - 1.47
Probability of change of control			20.00	%			10.00	%
Probability of dissolution			45.00	%			45.00	%
Probability of other outcome			35.00	%			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 loss of $25,000 and a gain of $0.1 million during the three months ended June 30, 2025 and 2024, respectively; and a gain of $0.1 million and a loss of $0.1 million during the six months ended June 30, 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:

		June 30,				December 31,
		2025				2024
Expected stock price volatility			96.50% - 99.20	%			100.20% - 101.40	%
Risk-free interest rate			3.70% - 4.20	%			4.20% - 4.30	%
Expected dividend yield			0.00	%			0.00	%
Expected term (in years)			0.67 - 3.00				0.75 - 3.50
Probability of change of control			20.00	%			10.00	%
Probability of dissolution			45.00	%			45.00	%
Probability of other outcome			35.00	%			45.00	%

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 loss of $30,000 and a gain of $1.5 million during the three months ended June 30, 2025 and 2024, respectively; and a gain of $0.6 million and a gain of $0.3 million during the six months ended June 30, 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:

		June 30,				December 31,
		2025				2024
Expected stock price volatility			96.30% - 104.30	%			97.80% - 101.90	%
Risk-free interest rate			4.00% - 4.40	%			4.20	%
Expected dividend yield			0.00	%			0.00	%
Expected term (in years)			0.29 - 0.96				0.71 - 1.46
Probability of NDA acceptance			20.00	%			20.00	%
Probability of fundamental transaction			20.00	%			10.00	%
Probability of dissolution			45.00	%			45.00	%
Probability of other outcome			15.00	%			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 loss of $0.5 million and a gain of $1.3 million during the three and six months ended June 30, 2025, respectively. 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:

		June 30,				December 31,
		2025				2024
Expected stock price volatility			99.60	%			107.50	%
Risk-free interest rate			3.70	%			4.40	%
Expected dividend yield			0.00	%			0.00	%
Expected term (in years)			4.25				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.

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:

		Six Months Ended June 30,
		2025				2024
Expected stock price volatility			103.78% - 110.25	%			97.78% - 110.82	%
Risk-free interest rate			4.05% - 4.24	%			4.04% - 4.58	%
Expected dividend yield			0.00	%			0.00	%
Expected term of options (in years)			5.00 - 6.25				5.00 - 10.00

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 six months ended June 30, 2025 and 2024.