Filing summary
Entity and period: The supplied filing is AgeX Therapeutics, Inc.’s Form 10-K for the fiscal year ended December 31, 2020, filed March 31, 2021. It is not identified in the filing as a Serina Therapeutics filing. The financial comparisons below are for full-year 2020 versus full-year 2019, not for Q4 alone.
Business context and results
AgeX is a discovery-stage biotechnology company developing cell and tissue-regeneration technologies for age-related and degenerative diseases. Its candidates—including AGEX-BAT1, AGEX-VASC1, AGEX-iTR1547 and AGEX-iTR1550—were in discovery; none had entered clinical trials. It had no approved therapeutic products and reported only insignificant product-sale revenue.
| Metric | 2020 | 2019 | Change |
|---|---|---|---|
| Total revenue | $1.868 million | $1.728 million | Up 8.1% |
| Gross profit | $1.710 million | $1.484 million | Up 15.2%; gross margin about 91.5% versus 85.9% |
| Research and development expense | $4.978 million | $5.904 million | Down 15.7% |
| General and administrative expense | $7.403 million | $8.139 million | Down 9.0% |
| Loss from operations | $10.671 million | $12.559 million | Loss narrowed |
| Net loss attributable to AgeX | $10.865 million | $12.154 million | Loss narrowed |
| Net loss per share, basic and diluted | $0.29 | $0.33 | Loss per share narrowed |
| Cash used in operating activities | $7.817 million | $10.160 million | Use declined |
Subscription and advertising revenue was $1.265 million in 2020, principally from LifeMap Sciences’ databases; grant revenue was $307,000 and other revenue was $296,000. LifeMap was sold in March 2021, so AgeX stated it would not recognize its post-sale revenue. Expense reductions included staff cuts and the end of shared services from former parent Lineage. 2020 results also included approximately $195,000 of restructuring charges and accelerated depreciation of laboratory equipment.
Financial position and funding
At December 31, 2020, cash and cash equivalents were $527,000, total current assets $2.283 million, and total current liabilities $5.357 million. Total assets were $3.925 million, total liabilities $9.321 million, and stockholders’ deficit $5.396 million. Balance-sheet loans due to Juvenescence were $5.860 million, net of debt issuance costs, and a $436,000 PPP loan was classified as current. The cash-flow statement reports $577,000 of cash, cash equivalents and restricted cash at year-end; the filing does not explain the difference from balance-sheet cash in the excerpt provided.
AgeX reported a $97.1 million accumulated deficit and recurring operating losses and negative operating cash flows. Management and the auditor stated that substantial doubt existed about AgeX’s ability to continue as a going concern, and the auditor’s opinion was unmodified but included a going-concern uncertainty section. The company said available cash, potential Juvenescence borrowing and the ATM program would not cover anticipated requirements for the twelve months after filing. It had no other committed financing source identified.
Material developments, outlook and risks
- In April 2020, AgeX reduced staffing, including 11 research and development personnel; it did not renew its approximately 23,911-square-foot office and laboratory lease after December 31, 2020. It moved to a 135-square-foot office and had no in-house laboratory or research staff, relying instead on university-sponsored work and outside providers.
- Juvenescence, AgeX’s largest shareholder and a major creditor, provided convertible loan facilities. Additional advances were subject to its discretion; loan terms also included warrants, potential conversion into shares, and restrictions on other borrowing. The 2020 facility could permit a security interest over substantially all of AgeX’s and certain subsidiaries’ assets at Juvenescence’s request.
- After year-end, AgeX borrowed an additional $2.0 million under the 2020 facility. In February 2021, the 2019 facility was amended to increase its credit line from $2.0 million to $6.0 million, with incremental advances subject to Juvenescence’s discretion. The PPP loan was forgiven in full on February 19, 2021.
- AgeX entered an ATM sales agreement for up to $12.6 million of common stock; it reported approximately $496,000 of gross proceeds through March 26, 2021. Further equity or debt financing could dilute shareholders or impose additional restrictions.
- AgeX received an NYSE American deficiency notice in June 2020 for failing continued-listing standards, including stockholders’ equity below $2.0 million and losses in its two latest fiscal years. The exchange accepted a compliance plan requiring compliance by December 1, 2021; failure to show progress or meet the standards could lead to delisting.
- In March 2021, AgeX announced negotiations toward a possible merger with LyGenesis. Terms under discussion included issuing LyGenesis shareholders shares representing two-thirds of post-merger AgeX on a fully diluted basis before a contemplated capital raise. No definitive agreement or closing was assured; Juvenescence had substantial interests in both companies, creating potential conflicts.
- AgeX’s LifeMap Sciences subsidiary was sold in a cash-out merger on March 15, 2021. AgeX reported approximately $466,400 in merger proceeds and a $250,000 repayment of intercompany indebtedness.
- Management cited major risks from limited capital, halted internal research, dependence on third parties, unproven preclinical candidates, regulatory and manufacturing hurdles, intellectual-property protection, competition, COVID-19 uncertainty, and Juvenescence’s control and creditor position. No quantitative operating guidance was provided.
Investor verification priorities
- Confirm the issuer identity: the filing supplied is AgeX Therapeutics, Inc., not Serina Therapeutics, Inc.
- Check the going-concern disclosure, cash and liquidity, and the timing and availability of Juvenescence advances and ATM proceeds.
- Review loan conversion, warrant, collateral, maturity and dilution terms, including any changes after March 31, 2021.
- Verify NYSE American compliance progress and current listing status.
- Check whether LyGenesis merger negotiations produced a definitive agreement, and review governance, conflict-management, consideration and dilution terms.
- Assess the operational effect of LifeMap’s sale and the reduction of AgeX’s laboratory, staff and research capacity.