AgeX Therapeutics, Inc. — 2021 Form 10-K
Entity and period: The supplied filing is AgeX Therapeutics, Inc.’s annual report for the fiscal year ended December 31, 2021—not a filing by Serina Therapeutics, Inc. The figures below therefore relate to AgeX. Comparative figures are for 2020.
Business context and reporting period
AgeX is a discovery-stage biotechnology company developing regenerative and cell-based therapies for aging-related and degenerative diseases. Its candidates—including AGEX-BAT1, AGEX-VASC1 and iTR programs—were in discovery; none had entered clinical trials, and the company had no approved therapeutic products. AgeX reported 10 employees at year-end and had no research laboratory, with development activity limited and substantially dependent on university research and outside providers.
On March 15, 2021, AgeX disposed of and deconsolidated LifeMap Sciences. Its results are presented as discontinued operations, making year-over-year comparisons less directly comparable. AgeX received approximately $466,400 of sale proceeds and $250,000 in repayment of LifeMap debt; $1.76 million of additional LifeMap debt was converted into subsidiary shares before the sale.
Financial performance and position
| Metric | 2021 | 2020 |
|---|---|---|
| Continuing-operations revenue | $144,000 | $361,000 |
| Gross profit | $125,000 | $335,000 |
| Research and development expense | $1.456 million | $3.714 million |
| General and administrative expense | $6.708 million | $6.721 million |
| Loss from continuing operations | $8.582 million | $10.399 million |
| Net loss attributable to AgeX | $8.675 million | $10.865 million |
| Basic and diluted loss per share | $0.23 | $0.29 |
| Net cash used in operating activities | $7.855 million | $7.817 million |
Continuing revenue comprised $104,000 of NIH grant revenue and $40,000 of other revenue. LifeMap, reported separately as discontinued operations, generated $277,000 of revenue through its disposition in 2021, compared with $1.507 million in 2020. Research and development expense fell 61%, primarily following staff reductions and closure of the laboratory; administrative expense was essentially flat. A $437,000 gain from forgiveness of the Paycheck Protection Program loan contributed to other income in 2021.
At December 31, 2021, cash and cash equivalents were $584,000 (plus $50,000 of restricted cash), total current assets were $2.234 million, and total current liabilities were $8.967 million. Total liabilities were $15.029 million, including approximately $13.202 million of Juvenescence loans net of debt issuance costs. Stockholders’ deficit was $11.875 million and accumulated deficit was $105.748 million. Intangible assets, net, were $870,000.
Cash used in continuing operating activities was $7.765 million. Financing activities provided $7.246 million net, primarily from Juvenescence borrowings and approximately $496,000 of ATM share sales; investing activities provided $666,000, mainly from the LifeMap transaction. Management and the auditor stated that substantial doubt exists about AgeX’s ability to continue as a going concern. The auditor issued an unqualified opinion on the financial statements with a going-concern emphasis.
Material changes versus 2020
- LifeMap Sciences was sold in March 2021, ending its consolidation and removing its future revenue and assets from AgeX’s results.
- R&D expense declined from $3.714 million to $1.456 million as the company curtailed internal development, reduced staff and closed its laboratory.
- Continuing-operations losses narrowed, but operating cash use remained elevated and slightly increased overall.
- Juvenescence borrowing and warrants remained central to financing; year-end debt and the stockholders’ deficit increased.
Outlook, financing, risks and unusual items
The filing provides no quantified revenue or earnings guidance. Management expected continued losses and negative cash flow, and stated that available cash, potential Juvenescence borrowing and possible ATM proceeds would not fund the next 12 months. The company said it would need additional capital and might pursue licensing, collaborations or outsourced development; none was assured.
After year-end, in February 2022, AgeX entered into a $13.16 million secured convertible credit line with Juvenescence. It drew $8.16 million, using $7.16 million to repay the 2019 facility and related fees; up to $5 million remained available subject to Juvenescence’s discretion. The note is secured by substantially all AgeX assets, carries origination fees, permits conversion into stock under specified terms, and includes restrictive covenants and warrants. Juvenescence was reported to beneficially own approximately 69.45% of AgeX as of March 14, 2022, including securities and potential conversion shares as described in the filing.
Other significant risks include the early stage and untested status of all therapeutic candidates; reliance on third parties for research, manufacturing and potential trials; dependence on additional financing; potential dilution and creditor control; intellectual-property and licensing risks; regulatory and reimbursement uncertainty; and COVID-19-related disruption. NYSE American notified AgeX of continued-listing deficiencies in November 2021 and accepted a compliance plan, with quarterly monitoring and potential delisting if requirements are not met. No material litigation was reported. Management assessed disclosure controls and internal control over financial reporting as effective; the company was exempt from auditor attestation of internal controls.
Most important facts for investors to verify
- Confirm the issuer: this source is AgeX Therapeutics, Inc., although the request names Serina Therapeutics, Inc.
- Review the going-concern disclosure, cash runway assumptions, and actual availability and terms of Juvenescence funding.
- Assess the secured note, collateral, conversion provisions, warrants, covenants and potential dilution, including Juvenescence’s control position.
- Verify the current NYSE American listing status and progress under the accepted compliance plan.
- Track whether AgeX can fund outsourced research, advance any candidate toward preclinical testing, and secure licensing or collaboration partners.
- Interpret revenue and loss trends in light of the LifeMap disposition and the sharp reduction in internal R&D activity.