Clene Improves Cash Position and Runway by Securing New Debt Facility to Pay Off Existing Senior Loan

Rhea-AI Summary

Clene Inc. (CLNN) has secured a new $10 million debt facility to replace its existing $7.85 million Avenue Capital debt. The new facility carries a 12% annual interest rate and is secured by all company assets. Notable features include:

- Interest-only payments for the first 12 months
- 18-month maturity period
- 65% of the debt is convertible to common stock at $5.67 per share (130% premium to closing price)

The financing aims to improve Clene's cash position to support additional data generation for CNM-Au8®'s new drug application for ALS through an accelerated regulatory pathway. The debt facility is provided by three Clene-affiliated entities and is expected to close by December 20, 2024.

Positive

• Secured $10M new debt facility with improved terms including 12-month interest-only period
• Debt conversion price set at 130% premium to current stock price, indicating investor confidence
• Extended cash runway to support CNM-Au8® ALS drug application process
• Refinancing of existing debt with affiliated entities suggests strong internal support

Negative

• Higher interest rate at 12% compared to market rates
• Potential dilution risk from 65% convertible portion of debt
• All company assets pledged as collateral

Insights

Financial Analyst

The $10 million debt restructuring represents a strategic financial move that improves Clene's immediate liquidity position. The new facility's terms are notably favorable despite the company's small market cap of $33.2 million. Key advantages include:

• Extended interest-only period of 12 months, reducing near-term cash burn
• Conversion feature at $5.67 per share (130% premium) on 65% of the debt, indicating lender confidence
• Net cash injection of approximately $2.15 million after paying off existing Avenue Capital debt

While the 12% interest rate is relatively high, reflecting the company's risk profile, the transaction effectively extends runway for critical ALS drug development. The involvement of affiliated entities as lenders suggests strong insider support but also highlights potential challenges in securing external funding.

Biotech Research Analyst

This financing deal is strategically timed to support Clene's accelerated regulatory pathway for CNM-Au8 in ALS treatment. The extended runway is important as the company needs to generate supplementary data from expanded access programs to strengthen its FDA application. The willingness of affiliated investors to provide new funding on favorable terms suggests confidence in the clinical data collected so far.

For retail investors, this deal is particularly significant because it provides Clene with essential capital to potentially complete its regulatory journey without immediate dilution through equity raises. The conversion premium of 130% also sets a positive benchmark for future valuation discussions, though the small market cap remains a concern for institutional investment.

• Secures new $10.0 million debt facility to replace remaining $7.85 million of Avenue Capital debt
• Improves cash position enabling Clene to generate the additional data to support the new drug application of CNM-Au8^® for ALS via an accelerated regulatory pathway
• Carries a 12% interest rate per annum and is secured by all assets of Clene
• Includes conversion feature on 65% of the new debt facility at a fixed conversion price of $5.67, a 130% premium to Clene’s closing stock price on the day of signing

SALT LAKE CITY, Dec. 19, 2024 (GLOBE NEWSWIRE) -- Clene Inc. (Nasdaq: CLNN) (along with its subsidiaries, “Clene”) and its wholly owned subsidiary Clene Nanomedicine Inc., a late clinical-stage biopharmaceutical company focused on revolutionizing the treatment of neurodegenerative diseases, including amyotrophic lateral sclerosis (“ALS”) and multiple sclerosis (“MS”), today announced that it signed a new debt facility (“Note”) with three entities, all of which are affiliated with Clene, that is targeted to close by December 20, 2024.

The three lenders have provided the aggregate principal amount of $10 million for the secured, partially convertible Note with a maturity eighteen months after closing bearing a fixed interest rate of 12%. The first twelve months of the Note are interest-only. Sixty-five percent of the Note is convertible into shares of Clene’s common stock at a fixed conversion price of $5.67, a 130% premium to Clene’s closing stock price on the day of signing.

Previously in May 2021, Clene entered into a Loan and Security Agreement (“Loan Agreement”) with Avenue Venture Opportunities Fund, L.P. (“Avenue”), a fund of the Avenue Capital Group. Over the course of the Loan Agreement, Clene borrowed $20 million. Repayment under the Loan Agreement began in July 2024 with $7 million of principal outstanding as of December 2024 plus a final payment fee of $0.85 million, for a total payoff of approximately $7.9 million, including a prepayment penalty.

“We are continually grateful for the trust of our many long-standing investors in Clene, who remain supportive of our mission to provide potentially lifesaving CNM-Au8 for people struggling with ALS and other debilitating neurodegenerative diseases,” said Rob Etherington, President and CEO of Clene. “We believe that the proceeds from this new debt facility, including an extended interest-only period, will allow Clene the cash runway to generate the additional data the U.S. Food and Drug Administration has requested from our expanded access programs. The data are being gathered to support the existing clinical study data for inclusion in an application seeking approval of CNM-Au8 for ALS through the accelerated regulatory pathway.”

About Clene
Clene Inc., (Nasdaq: CLNN) (along with its subsidiaries, “Clene”) and its wholly owned subsidiary Clene Nanomedicine Inc., is a late clinical-stage biopharmaceutical company focused on improving mitochondrial health and protecting neuronal function to treat neurodegenerative diseases, including amyotrophic lateral sclerosis, Parkinson’s disease, and multiple sclerosis. CNM-Au8^® is an investigational first-in-class therapy that improves central nervous system cells’ survival and function via a mechanism that targets mitochondrial function and the NAD pathway while reducing oxidative stress. CNM-Au8^® is a federally registered trademark of Clene Nanomedicine, Inc. The company is based in Salt Lake City, Utah, with R&D and manufacturing operations in Maryland. For more information, please visit www.clene.com or follow us on X (formerly Twitter) and LinkedIn.

About CNM-Au8^®
CNM-Au8 is an oral suspension of gold nanocrystals developed to restore neuronal health and function by increasing energy production and utilization. The catalytically active nanocrystals of CNM-Au8 drive critical cellular energy producing reactions that enable neuroprotection and remyelination by increasing neuronal and glial resilience to disease-relevant stressors. CNM-Au8 is a federally registered trademark of Clene Nanomedicine Inc.

Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which are intended to be covered by the “safe harbor” provisions created by those laws. Clene’s forward-looking statements include, but are not limited to, statements regarding a new financing facility and the Company’s expectation that the funding from debt facility will provide a sufficient runway for the Company to generate additional data to support the new drug application of CNM-Au8® for ALS via an accelerated regulatory pathway. In addition, any statements that refer to characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “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. These forward-looking statements represent our views as of the date of this press release and involve a number of judgments, risks and uncertainties. We anticipate that subsequent events and developments will cause our views to change. 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. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. Some factors that could cause actual results to differ include the Company's ability to close the new financing facility and provide all requisite deliverables, demonstrate the efficacy and safety of its drug candidates; the clinical results for its drug candidates, which may not support further development or marketing approval; actions of regulatory agencies; the Company’s limited operating history and its ability to obtain additional funding for operations and to complete the development and commercialization of its drug candidates, and other risks and uncertainties set forth in “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. 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 press release, 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 rely unduly upon these statements. All information in this press release is as of the date of this press release. The information contained in any website referenced herein is not, and shall not be deemed to be, part of or incorporated into this press release.

Media Contact Ignacio Guerrero-Ros, Ph.D., or David Schull Russo Partners, LLC Ignacio.guerrero-ros@russopartnersllc.com David.schull@russopartnersllc.com (858) 717-2310

Investor Contact Kevin Gardner LifeSci Advisors kgardner@lifesciadvisors.com (617) 283-2856

FAQ

What are the key terms of CLNN's new $10M debt facility announced in December 2024?

The debt facility includes a 12% annual interest rate, 18-month maturity, 12-month interest-only period, and 65% convertibility at $5.67 per share. It's secured by all company assets.

How will CLNN use the proceeds from the December 2024 debt facility?

The proceeds will be used to generate additional data requested by the FDA from expanded access programs to support CNM-Au8's ALS drug application through the accelerated regulatory pathway.

What is the conversion price for CLNN's new convertible debt announced in December 2024?

The conversion price is set at $5.67 per share, representing a 130% premium to Clene's closing stock price on the signing date.

How much existing debt is CLNN paying off with the new December 2024 financing?

CLNN is paying off approximately $7.85 million in existing debt from Avenue Capital, which includes $7 million in principal and $0.85 million in final payment fees.