Filing identity and reporting period
The supplied filing is AgeX Therapeutics, Inc.’s Form 10-K for the fiscal year ended December 31, 2022, filed March 31, 2023. It is not a Serina Therapeutics, Inc. filing, and it reports annual results rather than standalone 2022 Q4 results. The summary below therefore reflects AgeX’s filing; quarterly figures are not separately provided in the supplied text.
Business context and financial performance
AgeX is a discovery-stage biotechnology company developing cell and tissue-regeneration technologies for age-related and degenerative diseases. Its principal candidates were in discovery; none had entered clinical trials. The company had no approved therapeutic products, and its research-product sales generated minimal revenue.
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | $34,000 | $144,000 |
| Gross profit | $21,000 | $125,000 |
| Research and development expense | $1.025 million | $1.456 million |
| General and administrative expense | $5.971 million | $6.708 million |
| Net loss attributable to AgeX | $10.462 million | $8.675 million |
| Net cash used in continuing operating activities | $5.939 million | $7.765 million |
Revenue fell 76% year over year, chiefly because the NIH grant was fully expended by the end of 2021; research-product revenue was $34,000 versus $40,000. Gross margin was approximately 62% in 2022, but on very small revenue. Operating expenses declined, while the loss widened largely as net interest expense rose to $3.335 million from $1.097 million and the company recorded a $225,000 warrant fair-value loss. The 2021 comparison included a $437,000 gain from forgiveness of a Paycheck Protection Program loan.
Liquidity, debt and balance sheet
At December 31, 2022, cash and cash equivalents were $645,000, restricted cash was $50,000, and current assets totaled $2.453 million. Current liabilities were $10.078 million, implying a working-capital deficit of approximately $7.625 million. Total liabilities were $20.556 million; stockholders’ deficit was $17.315 million. Cash, cash equivalents and restricted cash increased by only $61,000 during 2022, as $6.0 million of financing cash inflow largely funded $5.939 million of continuing operating cash use.
At year-end, the balance sheet reported Juvenescence loans net of debt issuance costs of $18.124 million. Subsequent borrowing raised total Juvenescence borrowings to $32.160 million as of March 20, 2023. The loans are convertible and, for specified notes, secured by substantially all AgeX assets, including certain subsidiary shares. Reported maturities included February 2024 and March 2024; a further $10 million note matures in March 2026.
Material changes, outlook and significant risks
- AgeX reduced staffing, closed its research laboratory and curtailed in-house R&D, relying instead on limited university-sponsored work, contractors and potential licensing or collaboration arrangements.
- The auditor’s report includes a going-concern paragraph. Management and the auditor state that available cash and financing sources were insufficient for the following 12 months and that substantial doubt exists about AgeX’s ability to continue as a going concern. The financial statements contain no adjustments for the outcome of that uncertainty.
- In March 2023, after the reporting date, AgeX borrowed $10 million from Juvenescence and on-lent it to Serina under a note bearing 7% interest. AgeX described a potential merger with Serina, but no definitive merger agreement had been negotiated or executed in the filing. If a merger is completed, the $10 million borrowing remains an AgeX obligation; specified conditions allow AgeX to tender the Serina note to Juvenescence if the merger does not proceed.
- AgeX also contemplated a Reverse Bio financing and spinoff, but definitive agreements and board approval had not been obtained. The potential transactions’ terms, dilution and outcome were uncertain.
- Juvenescence is a major shareholder and creditor; the filing reported beneficial ownership of approximately 78.7% as of March 20, 2023, including shares potentially obtainable through warrants and loan conversions. Conversion and warrant exercise could further dilute other shareholders.
- NYSE American had granted AgeX an extension to regain listing compliance by May 17, 2023, including increasing stockholders’ equity to at least $4 million. Failure to meet requirements or plan milestones could lead to delisting proceedings.
- Management reported effective disclosure controls and effective internal control over financial reporting at year-end. The auditor was not engaged to audit internal control effectiveness.
Important facts for investors to verify
- Confirm the issuer and period: this is AgeX’s 2022 annual filing, not Serina’s, and it does not give standalone Q4 results.
- Review AgeX’s subsequent filings for financing, cash runway, debt balances, and the status and terms of any Serina merger or Reverse Bio transaction.
- Check current Juvenescence loan and security terms, maturity or conversion provisions, warrant counts, and potential dilution.
- Verify current NYSE American listing status and any subsequent compliance or delisting developments.
- Assess whether AgeX’s development programs, licensing prospects and financing plans have progressed sufficiently to address the going-concern uncertainty.