Filing summary
Issuer discrepancy: The request identifies Serina Therapeutics, Inc., but the supplied Form 10-Q is for AgeX Therapeutics, Inc. This summary reflects the filing provided, not a Serina filing.
Business context and reporting period
The filing covers the quarter and nine months ended September 30, 2022; it was filed November 10, 2022. AgeX is a biotechnology company developing regenerative and cell-based technologies, including PureStem, UniverCyte, AGEX-BAT1, AGEX-VASC1, and induced tissue regeneration. Operations were substantially reduced, with research and development increasingly outsourced. LifeMap Sciences was sold and deconsolidated in March 2021; its results are presented as discontinued operations.
Financial performance and position
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $9,000 | $24,000 | $26,000 | $117,000 |
| Operating expenses | $1.554 million | $1.696 million | $5.207 million | $6.271 million |
| Loss from operations | $1.550 million | $1.674 million | $5.193 million | $6.066 million |
| Net loss attributable to AgeX | $2.435 million | $1.955 million | $7.759 million | $6.517 million |
| Basic and diluted loss per share | $0.06 | $0.05 | $0.20 | $0.17 |
Amounts above are in U.S. dollars; financial statement amounts originally presented in thousands have been converted where applicable. Revenue was immaterial, and gross profit was $4,000 for Q3 and $14,000 for the nine-month period. Gross margins are not meaningful at this revenue level.
- Cash flow: Nine-month operating cash use was $4.618 million, versus $6.208 million including discontinued operations in 2021. Financing provided $4.5 million; investing cash flow was nil. Cash, cash equivalents, and restricted cash fell $118,000 to $516,000, including $50,000 of restricted cash.
- Liquidity: At September 30, current assets were $1.187 million and current liabilities were $8.809 million; the derived current ratio was approximately 0.13x. Total assets were $2.008 million and total liabilities were $17.157 million. Stockholders’ deficit was $15.149 million.
- Debt: The balance sheet reported $15.646 million of loans payable to Juvenescence, net of debt issuance costs. The filing separately reports $8.0 million principal drawn under the 2020 loan and $11.16 million under the 2022 secured note as of September 30. The secured note is collateralized by substantially all AgeX assets; the 2020 loan matures March 30, 2023, and the secured note February 14, 2024.
- Other items: Interest expense was $923,000 in Q3 and $2.357 million for nine months. A $220,000 nine-month unrealized loss on warrant fair value was recorded, while Q3 included a $35,000 gain. The warrant liability was $657,000 at quarter-end and is measured using Level 3 inputs.
Changes versus the prior comparable period
- Q3 revenue fell $15,000 year over year; nine-month revenue fell $91,000. The 2021 periods included NIH grant revenue, which ended after the grant was fully expended in 2021.
- Nine-month operating expenses declined $1.064 million, mainly from lower research and development, legal, consulting, stock compensation, and license-related costs. Q3 operating expenses declined $142,000.
- Despite lower operating expenses, nine-month net loss attributable to AgeX increased $1.242 million, primarily reflecting higher interest expense and warrant remeasurement, compared with 2021 that included a PPP loan forgiveness gain. Q3 net loss increased $480,000.
- Operating cash use improved by $1.590 million compared with the 2021 nine-month total, although 2021 included discontinued operations. The company relied on Juvenescence borrowings for financing in 2022 and raised no ATM proceeds during the nine-month period.
Outlook, risks, and unusual items
- Going concern: Management states that available cash, remaining Juvenescence credit, and potential ATM proceeds would not cover anticipated requirements for the twelve months following issuance of the financial statements. The filing says this raises substantial doubt about the company’s ability to continue as a going concern and that substantial additional funding is needed.
- Subsequent financing: On October 21, 2022, AgeX borrowed another $500,000 under the secured note, leaving $1.5 million available, subject to Juvenescence approval of each draw. AgeX issued Juvenescence warrants to purchase 362,318 shares at $0.69 per share in connection with that draw.
- Financing and dilution risk: Juvenescence debt agreements restrict additional borrowing and certain transactions, impose use-of-proceeds limits, and provide security over substantially all assets. Conversion rights and warrants could materially dilute existing stockholders. AgeX stated that it had no other committed financing sources.
- Delisting risk: AgeX had received an NYSE American deficiency notice relating to stockholders’ equity and losses. At the filing date, it was awaiting a response to its request for an extension; the Exchange could extend the deadline or initiate delisting proceedings. The company said it intended to arrange OTC quotation if delisted.
- Development and operating risks: Cost reductions, staffing cuts, and closure of laboratory facilities have deferred some development work and may make progress and fundraising more difficult. The filing also discusses potential operational and financing impacts from COVID-19, without quantifying them.
- No formal financial guidance was provided. Management expects continuing operating losses and negative cash flows. The filing reports no material litigation and no off-balance-sheet arrangements.
Key facts for investors to verify
- Confirm that AgeX Therapeutics—not Serina Therapeutics—is the intended issuer and filing.
- Verify the latest cash runway, expected operating requirements, and whether additional Juvenescence funding or ATM proceeds became available after the filing.
- Check the current status, terms, and maturity obligations of the Juvenescence loans, including collateral, conversion rights, and outstanding warrants.
- Confirm the outcome of the NYSE American extension request and the company’s subsequent listing status.
- Assess subsequent financing, share issuance, and any material changes to the company’s development programs or going-concern disclosures.