Business Context and Reporting Period
This Form 8-K, dated August 29, 2023, reports that AgeX Therapeutics, Inc. (AgeX) entered into a definitive Merger Agreement with Serina Therapeutics, Inc. (Serina). Under the agreement, a wholly-owned subsidiary of AgeX will merge with Serina, with Serina surviving as a wholly-owned subsidiary of AgeX. The transaction is intended to be a tax-free reorganization. Serina focuses on small molecule candidates for central nervous system (CNS) indications using its proprietary POZ Platform delivery technology.
Key Financial Metrics and Transaction Terms
The filing does not provide historical revenue, profit, or cash flow metrics for either company. Key financial terms of the transaction include:
- Ownership Structure: Post-merger, existing AgeX stockholders are expected to own approximately 25% of the combined company, while Serina stockholders are expected to own approximately 75% on a fully-diluted basis.
- Warrant Issuance: AgeX will issue Post-Merger Warrants to existing stockholders (3 warrants for every 5 shares held). Each warrant is exercisable for one unit at $13.20, expiring July 31, 2025. Each unit consists of one share of AgeX common stock and one Incentive Warrant exercisable at $18.00, expiring four years post-closing.
- Cash Condition: A closing condition requires AgeX to have at least $500,000 of immediately spendable non-restricted cash net of liabilities immediately prior to closing.
- Capital Injection: Juvenescence Limited, a major AgeX stockholder, agreed to exercise Post-Merger Warrants to provide an additional $15 million in capital to the combined company in three tranches between May 2024 and June 2025.
- Termination Fees: A termination fee of $1 million may be payable by either party depending on the circumstances of termination, plus reimbursement of up to $1 million in expenses.
Material Changes and Pipeline Assets
The primary material change is the strategic shift in AgeX's business focus through the acquisition of Serina's pipeline. Serina's key assets include:
- SER-252 (POZ-apomorphine): Lead candidate for advanced Parkinson's Disease, targeting an IND submission in Q4 2024.
- SER-227 (POZ-buprenorphine): Positioned for IND-enabling studies for post-operative pain.
- SER-228 (POZ-cannabidiol): Positioned for IND-enabling studies for treatment-refractory epilepsy.
- Collaborations: Serina is advancing pre-clinical studies with pharma partners on next-generation LNP delivered RNA vaccines and expanding antibody-drug conjugate (ADC) partnerships.
Guidance, Outlook, and Risks
Management and Governance:
- Serina's CFO, Steve Ledger, is expected to serve as interim CEO of the combined company.
- AgeX's CFO, Andrea Park, will serve as interim CFO and Chief Accounting Officer.
- Serina's CEO, Randall Moreadith, will become Chief Scientific Officer.
- The post-closing board will consist of seven directors, with two designated by Serina, two by AgeX, and two by mutual agreement.
Conditions to Closing:
- Stockholder approval from both AgeX and Serina.
- Effectiveness of the Form S-4 registration statement.
- Completion of a reverse stock split of AgeX common stock to result in approximately 2,500,000 shares outstanding.
- AgeX stock price must not be less than $12.00 per share immediately prior to the Merger (post-split).
- Juvenescence must hold at least 1,133,308 Post-Merger Warrants.
Risks and Contingencies:
- Failure to obtain stockholder approval or satisfy closing conditions.
- Risks associated with clinical trial outcomes and regulatory approvals for Serina's pipeline.
- Potential dilution of existing AgeX shareholders.
- Uncertainty regarding the ability to raise additional financing beyond the committed $15 million from Juvenescence.
- Integration risks and potential distraction of management from ongoing operations.
Investor Verification Checklist
- Verify the approval status of the Form S-4 proxy statement/prospectus.
- Confirm the completion of the AgeX reverse stock split and the resulting share count.
- Monitor the AgeX stock price to ensure it remains above the $12.00 closing condition threshold.
- Review the specific terms of the Side Letter regarding Juvenescence's $15 million capital commitment and warrant exercise schedule.
- Assess the timeline for Serina's IND submission for SER-252 (targeted Q4 2024).
- Check for any updates on the conversion of Juvenescence's preferred stock and the release of security interests on AgeX assets.