Business Context and Reporting Period
This Form 8-K is a current report filed by AgeX Therapeutics, Inc. (trading symbol: AGE) on July 12, 2021. The registrant is a Delaware corporation headquartered in Alameda, California, and is classified as an emerging growth company. The filing discloses two material events: the incurrence of a direct financial obligation and a change in the registrant's certifying accountant.
Key Financial Metrics and Obligations
The filing does not provide comprehensive financial statements, revenue, profit, or cash flow data. The specific financial metric disclosed is a new debt obligation:
- New Borrowing: $1.0 million borrowed on July 12, 2021.
- Lender: Juvenescence Limited.
- Facility: Loan Facility Agreement dated August 13, 2019, as amended February 10, 2021.
- Maturity Date: February 14, 2022.
- Previous Auditor Status: OUM & Co. LLP's audit reports for fiscal years 2019 and 2020 included a "going concern" qualification.
Material Changes Versus Prior Period
The primary material change is the increase in outstanding debt under the existing Loan Agreement. Additionally, the company has changed its independent registered public accounting firm. OUM & Co. LLP resigned on July 15, 2021, following a practice combination with WithumSmith + Brown PC ("Withum"). Withum was engaged as the new independent auditor on July 20, 2021. The filing states there were no disagreements with the former auditor regarding accounting principles or financial statement disclosures during the two most recent fiscal years.
Guidance, Risks, and Contingencies
Forward-Looking Statements: The filing includes standard disclaimers that actual results may differ materially from anticipated results due to various risk factors.
Loan Agreement Risks: The new borrowing is subject to immediate acceleration if an Event of Default occurs. Defined events include:
- Failure to pay amounts due within 10 business days of notice.
- Failure to perform obligations under the agreement.
- Incurrence of other indebtedness exceeding $100,000 becoming due early, or indebtedness over $25,000 not paid when due.
- General cessation of payments, insolvency, or liquidation.
- Material adverse changes in financial condition affecting the ability to perform obligations.
- Legal judgments or injunctions materially affecting business operations.
Accounting Change: The transition to Withum was necessitated by a practice merger, not by a dispute. No consultations with Withum regarding accounting principles or audit opinions occurred prior to engagement.
Investor Verification Checklist
- Verify the total outstanding principal balance under the Juvenescence Loan Agreement following the $1.0 million drawdown.
- Confirm the company's current liquidity position and ability to meet the February 14, 2022 repayment date.
- Review the "going concern" qualification noted in the 2019 and 2020 audit reports to understand the historical financial stability context.
- Monitor for any subsequent filings regarding the transition of audit responsibilities to WithumSmith + Brown PC.
- Check for any other indebtedness exceeding the $100,000 threshold mentioned in the loan default clauses.