Filing identity and reporting period
The supplied filing is AgeX Therapeutics, Inc.’s unaudited Form 10-Q for the quarter and six months ended June 30, 2023—not a Serina Therapeutics, Inc. 10-Q, as indicated in the request metadata. AgeX is a biotechnology company developing cell-based therapies and other technologies for age-related and degenerative diseases. Unless otherwise noted, financial amounts below are in thousands of dollars.
Financial performance and position
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | $9 | $12 | $19 | $17 |
| Gross profit | $4 | $6 | $13 | $10 |
| Operating expenses | $1,890 | $1,597 | $4,057 | $3,653 |
| Operating loss | $(1,886) | $(1,591) | $(4,044) | $(3,643) |
| Net loss attributable to AgeX | $(2,669) | $(2,618) | $(5,946) | $(5,324) |
| Basic and diluted loss per share | $(0.07) | $(0.07) | $(0.16) | $(0.14) |
| Net cash used in operating activities | — | — | $(3,884) | $(3,382) |
Gross margins were approximately 44% in Q2 and 68% for the first half, based on the reported rounded figures. At June 30, cash and cash equivalents were $261, with an additional $50 of restricted cash. Current assets were $1,350 against current liabilities of $24,505; total liabilities were $34,573 and stockholders’ deficit was $22,296. Net debt carrying value was $33,011, primarily obligations to largest stockholder Juvenescence. The company had an accumulated deficit of $122.2 million.
Six-month investing cash outflow of $10 million was the advance to Serina under a 7% convertible note. Financing provided $13.5 million, entirely from Juvenescence loan facilities. Cash, cash equivalents and restricted cash declined by $384 to $311.
Material changes versus prior period
- First-half revenue rose slightly to $19 from $17, while first-half net loss widened to $5,946 from $5,325. Operating cash use increased to $3,884 from $3,382.
- R&D expense declined 49% for the first half to $334, reflecting lower external research costs, payroll and laboratory expenses. G&A rose 24% to $3,723, mainly due to legal, consulting and due-diligence costs related to the proposed Serina merger.
- Debt-related interest expense and amortization remained significant. The company reported $1,892 of net interest expense for the first half, partly offset by interest income on the Serina note.
- After quarter-end, on July 24, AgeX exchanged $36 million of Juvenescence indebtedness and certain accrued fees for Series A and Series B preferred shares. AgeX said this restored compliance with NYSE American equity listing requirements and the exchange withdrew its delisting determination. This subsequent transaction is not reflected in the June 30 balance sheet.
Outlook, risks and notable events
AgeX stated that its cash, remaining Juvenescence credit and potential ATM proceeds would not cover anticipated needs for the next 12 months from the financial statements’ issuance. Management concluded that substantial doubt existed about the company’s ability to continue as a going concern and said additional funding was needed. The filing provides no revenue or earnings guidance.
- AgeX and Serina had not entered into a definitive merger agreement, and the merger remained subject to board and stockholder approvals. AgeX had lent Serina $10 million; the note carried 7% interest and was due March 15, 2026, with conversion provisions tied to future financing events.
- A proposed Reverse Bio financing and spin-off also remained uncertain, without definitive agreements or board approval. AgeX said reduced internal R&D and reliance on outsourcing had limited development progress and could make fundraising more difficult.
- AgeX’s loans from Juvenescence included restrictions on borrowing and other transactions, and Juvenescence held security interests in substantially all AgeX assets. Additional equity or convertible securities could dilute existing holders or carry preferences affecting common stockholders.
- On August 9, Michael D. West stepped down as AgeX CEO and Joanne Hackett was appointed interim CEO. On August 11, AgeX received notice of an NIH grant of approximately $341,000 for one year of research on progenitor-cell exosomes for peripheral artery disease.
- The filing reported no material litigation and no material changes to previously disclosed risk factors other than the additional financing and going-concern risk. Management reported disclosure controls were effective and no material change in internal control over financial reporting.
Most important facts for investors to verify
- Confirm the intended issuer: this filing is for AgeX Therapeutics, not Serina Therapeutics.
- Review the post-quarter $36 million debt-for-preferred-stock exchange, including preferred conversion terms, share issuance caps and resulting dilution.
- Track available cash and financing, Juvenescence loan terms and collateral, and whether AgeX can address the stated going-concern uncertainty.
- Check whether the proposed AgeX–Serina merger and Reverse Bio financing/spin-off receive definitive agreements and required approvals.
- Assess progress in AgeX’s development programs and the implications of reduced internal R&D resources, as well as the company’s continued NYSE American listing status.