Ladies and gentlemen, thank you for standing by. Welcome to the Longeveron 2022 Second Quarter Earnings Call. My name is Irene and I will be coordinating this event. [Operator Instructions] I would now like to turn the conference over to our host, Elsie Yau from Stern Investor Relations. Elsie, please go ahead.

Thank you, operator. Good morning, everyone and welcome to Longeveron's second quarter 2022 call. Today we will provide a business update and discuss financial results for the second quarter of 2022. Earlier this morning, we issued a press release with these results, which can be found under the Investor section of our website at www.longeveron.com. I'm joining the call today by the following members of Longeveron's Management team; Dr. Chris Min, Interim Chief Executive Officer and Chief Medical Officer; Dr. Joshua M. Hare, Co-Founder, Chief Science Officer and Chairman; and James Clavijo, Chief Financial Officer. Dr. Min will begin with a brief corporate overview, followed by a review of update from Aging Frailty Program, including Longeveron's updated strategy in Japan, and the data from the Phase 1/2 HERA trial. Then Mr. Clavijo will review our 2022 second quarter financial results. Last, we will then open the call for Q&A. As a reminder, during this call, we will be making forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with cautionary statements in our press releases and risk factors discussion in our filings with the SEC, including our Annual Report on Form 10-K, and cautionary statements made during this call. We assume no obligation to update any of these forward-looking statements or information. Now, I'd like to turn the call over to Dr. Chris Min, Interim Chief Executive Officer and Chief Medical Officer of Longeveron. Chris?

Thank you, Elsie. Good morning everyone. Welcome to Longeveron's second quarter 2020 business update and financial results call. Longeveron is a leading clinical-stage biotechnology company developing living cell therapies for chronic aging-related diseases and other specific life-threatening conditions. At Longeveron, our mission is to develop safe and effective cell-based therapies for some of the most challenging disorders associated with the aging process and other medical disorders. As a reminder, our lead investigational product is called Lomecel-B, and it's a living cell product made from specialized cells isolated from the bone marrow of young healthy donors, ages 18 to 45. These specialized cells are known in the literature as medicinal signaling cells or MSCs and are essential to our endogenous or built-in repair mechanism. MSCs are known to perform a number of complex functions, including the ability to form nutrition. They also home to sites of injury or disease and secrete bioactive factors that are immunomodulatory and regenerative. We believe that Lomecel-B has multiple mechanisms of action that may lead to an anti-inflammatory pro-vascular and regenerative responses and therefore, may have broad applications for a range of aging-related and rare diseases. In the second quarter of 2022, we continue to make progress advancing Lomecel-B for our suite of aging and rare disease indications. We have ongoing trials in Alzheimer's disease, Hypoplastic Left Heart Syndrome or HLHS, and acute respiratory distress syndrome, or ARDS. We are also advancing Lomecel-B for aging frailty. First, I'll start with a brief update on our program for Alzheimer's disease. Neuronal cell death caused by early and substantial neuro inflammation is a significant contributor to the pathogenesis of Alzheimer's disease. In preclinical models of Alzheimer's disease, MSCs like Lomecel-B have been shown to cross the blood brain barrier potentially with an anti-inflammatory effect, improving endothelial function and…

Thanks, Chris. Good morning, everyone. Most of what I'll be covering this morning will be presented in more detail in our condensed financial statements and in our management's discussion and analysis of operations for the quarter ended June 30, 2022, and in our quarterly report on Form 10-Q, which will be filed today. For the second quarter ended June 30, 2022, revenues for each of the second quarters of 2022 and 2021 were approximately $0.5 million. The difference was due to an increase in clinical trial revenue and grant revenue as follows; clinical trial revenue, which derives from our Bahamas registry trial was $0.3 million in the second quarter of 2022 compared to $0.2 million in the same period in 2021, an increase of $0.1 million or 59%. While COVID-19-related travel concerns continue to negatively impact registry trial revenue, we believe this impact was lessened in the first quarter. Second quarter 2022 grant revenue was approximately $0.2 million, compared to $0.3 million in the same period in 2021, a decrease of $0.1 million or 54%. The decrease in grant revenue is primarily due to a reduction in grant funds available due to the completion of the grant funded clinical trials. Research and development expenses in the second quarter of 2022 were $1.7 million, compared to $2 million for the same period in 2021. The decrease of $0.3 million or 12% was primarily due to a decrease in equity based compensation allocated to research and development expenses, which decreased from $0.8 million for the three months ended June 30, 2021 to $0.1 million for the same period in 2022. However, this was offset by an increase of $0.5 million in research and development expenses that were not reimbursable by grants. General and administrative expenses in the second quarter of 2022 were $2.4 million compared to $3.2 million for the same period in 2021. The decrease of approximately $0.8 million or 26% was primarily related to a decrease of $0.7 million of equity based compensation expenses allocated to G&A. However, expenses related to legal and consulting services increased by $0.2 million in the three months ended June 30, 2022, compared to 2021. The company did take a non-operating lawsuit expense for the three months ended June 30, 2022, of approximately $1.4 million. Our net loss was $5.6 million in the second quarter of 2022 compared to $5 million for the same period in 2021. Cash and short-term investments was $27 million compared to $35 million as of June 30, 2022 and 2021, respectively. The decrease in cash period-over-period was a result of operating expenses and prepayments for insurance.

Sorry, James, did we lose you? James, are you there? So I think we're having some kind of technical difficulty, Elsie.

I think we're trying to dial James in.

Okay.

Ladies and gentlemen, James is back on the line with us. We apologize for the inconvenience.

I believe I left off on -- based on the company's current operating plan and financial resources, we believe that our existing cash and short-term investments will be sufficient to cover expenses and capital requirements into the first half of 2024. With that, thank you. And I will turn the call back to Chris.

Thank you, James. As you've heard today, we've made strong progress in the second quarter across our pipeline. I look forward to additional key updates later this year. I would now like to open the call for questions. Irene?

Thank you. [Operator Instructions] Our first question comes from Michael Okunewitch from Maxim Group. Michael, your line is open.

Hey, guys. Thank you for taking my questions. So, I guess, I'd like to see, if you could help contextualize the data from the HERA study. Mechanistically, how would Lomecel increase the titles to a non-vaccinated strain? Does this suggest that you're having a broader impact on immunosenescence?

I'm going to ask Dr. Joshua Hare, whether he prefer I answer or whether he'd like to answer that question.

Chris, why don't we both make comments that I can lead out. This is –

Sure. Great.

Joshua here. Yeah, we believe that a key component of immunosenescence is what can be referred to as exhaustion of the B-cells. The B-cells are the cells that are – of the immune system that make new antibodies to new viruses or vaccines. And we can see clearly that they're depressed in older people, because we could – we all saw that from the COVID pandemic that the people most adversely affected with illness were older people, and that's because of this concept of immunosenescence and depressed B-cells. In this study, we elected to look at vaccination to influenza, which is something that people typically get every year and the screens change every year. So we were encouraged to see that the Phuket strain responded, which was a strain not included in the vaccine for those two years. And that's what's called the heterotypic response, meaning that the immune system is responding more broadly. What we will do to follow-up on that is to specifically measure the B-cells, along with T-cells. And those results, which we should have in the future, will be included in our publication on topic. Chris, if you have anything to supplement that. Please go ahead.

Yeah. Just to echo Dr. Hare, you do see in vaccine trials when that's been looked at that even – it seems to be that in some cases, you can see increases insider to strength that are not in a vaccine and that is not just in the case of Lomecel-B, although in this trial what we saw was this increase to in tires to this petechial [ph] specifically in the Lomecel-B patients. And it's thought to be an indication of, in some cases let's say, in a true vaccine study it might indicate that there's just a generalized immune response to the simulation of vaccination. In our case because this seems to be specific to Lomecel-B, it would be thought to be some kind of indication that Lomecel-B is supplementing the generalized endothelial function and stimulating the immune function and perhaps awakening cells at cross react with Petechiae [ph] strain of the influenza virus. I hope that answers your question, Michael.

Yes. Thank you. I appreciate the additional color. Do you have any idea on when we could expect to see some more detailed analysis from the HARRIS study? Is that a 2020 event or should we expect that after the end of the year?

Well, it turns out that the detailed analysis that we're conducting in collaboration with Dr. Sean Lang is quite involved. And there are many, many samples to look at. So this was quite a complicated. So even though it was relatively small in terms of number of patients having been conducted across two flu seasons and with the number of samples and different timepoints, we're anticipating internally that it will take a few months to analyze those results. And then it's hard to predict when a manuscript will be accepted for publication. I would like to think that we will submit in this calendar year, but as to when they will appear in a published pure review journal is hard for me to predict.

All right. Thank you. And then I'd like to switch here and just talk about your plans for Japan and whether it's potentially easier to go for something like Japan first strategy in Aging Frailty and kind of work with the PMDA to define some of those regulatory endpoints and pathways and then take that additional insight over to the FDA, just given their PMDA is typically more progressive step in cell therapy and the real significant unmet need in Aging Frailty in Japan?

So I have to say, you're getting into a very detailed corporate strategy and it is something that we are actively thinking about. Our work, as you know, in Aging Frailty has largely been in the US, and we are going to try to work with the FDA in terms of their understanding of Aging Frailty. We also note that not only is Japan more open in terms of cell therapies and in general, the concept of Aging Frailty, but in fact, in Europe, the already -- the EMA even has a guidance for the development of treatments for Aging Frailty, which is quite different from the US situation. So what we are hoping to do is, at the moment is to work with the FDA and see where we are with their understanding of Aging Frailty and whether there's a path forward, but we're always actively thinking about other potential tactical approaches. But current -- our current approach is to focus on US with Japan supplement. But we recognize that one could consider other strategies, and we will evaluate our options as we go forward.

Chris, could I add to that?

I appreciate you taking the question.

I'm sorry, Josh, Dr. Hare -- sorry Dr. Hare wants to answer that, sorry.

Yes. Thanks, Chris. I also just want to respond to Michael to say that, having said what you've said, Chris, about our ongoing focus in the US. It should be noted that we are poised to start our trial in Japan this year. We've recently -- an important amendment accepted by the PMDA to the trial, that will allow us to proceed at this time. And so, the -- we certainly have Japan on our radar screen in the next cohort of patients to be randomize Lomecel-B will be subject in Japan.

Thanks, Dr. Hare.

Thank you very much. I appreciate you providing the additional color.

Thank you. Ladies and gentlemen, currently, we have no further questions. Therefore, I would like to hand back to Dr. Chris Min, Interim Chief Executive Officer and Chief Medical Officer for any closing remarks. Dr. Min, please go ahead.

Thank you, Irene. On behalf of the company, we'd like to thank everyone for their continued interest and support. We think we've had a successful second quarter and thank you for your attention and listening to our results. And we wish everyone a great day.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for being with us today. Have a lovely day ahead. You may disconnect your lines.