On September 27, 2022, Good Works II Acquisition Corp. (the “Company”) and Direct Biologics, Inc., a late-stage biotechnology company (“Direct Biologics”), announced the signing of a non-binding letter of intent for a potential business combination. The letter of intent is non-binding except with respect to certain specified provisions relating to, among other things, exclusivity, expenses and other customary provisions.

The letter of intent provides that, until November 21, 2022, the Company and Direct Biologics will negotiate exclusively with each other to achieve a definitive agreement whereby the Company would combine with Direct Biologics, resulting in a combined publicly traded company. Completion of the proposed transaction is subject to the negotiation of a definitive agreement and the satisfaction of conditions contained therein. Accordingly, there can be no assurance that a definitive agreement will be entered into or that the proposed transaction will be consummated or, if a transaction is consummated, as to its terms, structure or timing.

Direct Biologics is using its proprietary extracellular vesicle platform technology to harness the power of bone marrow-derived mesenchymal stem cells to develop cell-free therapeutic candidates. Its product candidate, ExoFlo, is in a Phase 3 clinical trial for treating moderate-to-severe acute respiratory distress syndrome (“ARDS”) in hospitalized adults with severe-to-critical COVID-19 (the “EXTINGuish COVID-19 trial”). ExoFlo received regenerative medicine advanced therapy designation for this indication from the U.S. Food and Drug Administration (“FDA”), which is designed to expedite the approval of promising regenerative medical products in the U.S. that demonstrate clinical evidence indicating the ability to address an unmet medical need for a serious life-threatening disease or condition.

Commencing in the fourth quarter of 2022 and the first quarter of 2023, Direct Biologics intends to commence clinical trials with ExoFlo in all-cause ARDS, ulcerative colitis, Crohn’s disease and abdominal solid organ transplant. In addition, there are numerous investigator-initiated trials underway with ExoFlo at leading research institutions addressing other applications as Direct Biologics believes ExoFlo holds potential in a wide range of other medical indications involving inflammation and tissue repair, including mild-to-moderate and long COVID.

The EXTINGuish COVID-19 trial is a multicenter, randomized, double-blinded, placebo-controlled clinical trial investigating the infusion of ExoFlo in up to 610 adults. The primary efficacy endpoints are all-cause mortality at day 60 and median days to recovery. The trial includes an interim efficacy analysis based on 50% enrollment, with potential to submit a Biologics License Application (“BLA”) should statistical significance be reached.

Good Works II Acquisition Corp. And Direct Biologics Sign Letter Of Intent For Potential Business Combination