Healios K.K. is in the process of preparing for a clinical trial in Japan to further test HLCM051, a somatic stem cell regenerative medicine product, for Acute Respiratory Distress Syndrome (ARDS)2. Healios is executing on its strategy to advance its therapeutic programs while leveraging efficient external funding sources involving investments from third parties including project finance, grants and partnerships. Consistent with this strategy, on December 14, 2022, Healios announced a Letter of Intent with Mitsubishi UFJ Capital in relation to project finance for ARDS development in Japan. Today, Healios announced that it has decided to establish a subsidiary to promote the development of this pipeline and has concluded an additional letter of intent with Saisei Ventures LLC (hereinafter referred to as "Saisei"), whereby Saisei will seek to commit invested capital of JPY 1 billion or more to the subsidiary in the future from Saisei managed funds.

With the aim of accelerating the development of HLCM051 for ARDS, Healios and Saisei have agreed that, upon entering into a definitive agreement, Saisei would make commitments to invest in the subsidiary described further in 2. below from Saisei managed funds and would provide support to the subsidiary with respect to activities to obtain non-dilutive grant funding. It is anticipated that a total of over JPY 1 billion would be committed to the subsidiary as investments from Saisei funds. The name of the subsidiary is ProcellCure Inc. and its location is Chuo-ku, Kobe, Hyogo Prefecture.

The representative director is Hikaru Saito, PhD, a senior member of Saisei's investment team. There is no confirmed impact of this matter on the business results for the fiscal year ending December 31, 2023 at this time. The company will promptly announce any matters that should be disclosed in the future.

HLCM051 is a somatic stem cell Regenerative medicine product. Healios added it to its pipeline by signing an exclusive licensing agreement.