Filing summary
Entity note: The supplied filing is AgeX Therapeutics, Inc.’s Form 10-Q for the quarter ended March 31, 2021, not a filing identified as Serina Therapeutics, Inc. The summary below reflects the filing text provided.
Business context and reporting period
AgeX is an early-stage biotechnology company developing regenerative and cell-based therapies for age-associated and degenerative diseases. Its programs include PureStem, UniverCyte, AGEX-BAT1, AGEX-VASC1 and induced tissue regeneration technology. The filing reports the three months ended March 31, 2021, compared with the same 2020 period.
On March 15, 2021, AgeX completed the sale of its majority-owned subsidiary LifeMap Sciences and deconsolidated it. LifeMap’s results are presented as discontinued operations; AgeX states it will have no continuing involvement. Comparative results and balance-sheet amounts are therefore affected by the disposal.
Key financial metrics
Amounts below are in thousands of dollars, except per-share data and percentages.
| Metric | Q1 2021 | Q1 2020 / prior balance |
|---|---|---|
| Continuing-operations revenue | $56 | $89 |
| Gross profit | $53 | $88 |
| Research and development expense | $324 | $1,221 |
| General and administrative expense | $2,022 | $1,875 |
| Net loss attributable to AgeX | $(2,088) | $(3,187) |
| Basic and diluted loss per share | $(0.06) | $(0.08) |
| Net cash used in operating activities | $(2,630) | $(2,064) |
| Cash and cash equivalents at period end | $809 | $527 at Dec. 31, 2020 |
| Total assets | $3,160 | $3,925 at Dec. 31, 2020 |
| Total liabilities | $9,263 | $9,321 at Dec. 31, 2020 |
| Total stockholders’ deficit | $(6,103) | $(5,396) at Dec. 31, 2020 |
AgeX reported a $106 gain on deconsolidation and $437 of other income, primarily from forgiveness of its PPP loan and accrued interest. LifeMap’s discontinued operations recorded a $103 loss in Q1 2021, compared with $189 in Q1 2020. Cash provided by financing activities was $2,496, including a $2,000 Juvenescence loan draw, approximately $496 of ATM stock proceeds, and a $250 collection of LifeMap debt. The cash-flow statement reports $859 of cash, cash equivalents and restricted cash at quarter-end; the balance sheet reports $809 of cash and cash equivalents.
Juvenescence loan balances were reported at $7,354 net of debt issuance costs ($2,020 current and $5,334 long-term). AgeX said it had borrowed $9.5 million in total under the 2019 and 2020 loan agreements by March 31, with a further $4.5 million potentially available at Juvenescence’s discretion. The 2019 facility’s maturity was extended to February 14, 2022; the 2020 facility’s stated repayment date is March 30, 2023.
Material changes versus the prior comparable period
- Revenue from continuing operations fell 37.1%, to $56, mainly reflecting lower grant revenue. LifeMap’s separate discontinued-operation revenue was $277 through March 15, versus $426 for Q1 2020.
- R&D expense declined 73.5% to $324, primarily following 2020 layoffs affecting 11 R&D employees and the closure of the laboratory facility at lease expiration at year-end.
- G&A expense rose 7.8% to $2,022, with higher legal, consulting and insurance costs partly offset by lower rent and other overhead.
- AgeX’s attributable net loss narrowed to $2,088 from $3,187. The comparison includes the PPP forgiveness income and deconsolidation gain in 2021.
- AgeX received approximately $466 from the LifeMap merger consideration; $1,761 of LifeMap debt owed to AgeX was converted into LifeMap shares and a further $250 was repaid in cash.
Outlook, risks and unusual items
- Going concern: Management concluded that cash and potential Juvenescence borrowing would not meet anticipated operating and other funding needs for the 12 months following issuance of the financial statements. The filing says this raises substantial doubt about AgeX’s ability to continue as a going concern and that additional capital is needed in the near term.
- Funding and dilution: Additional Juvenescence advances are discretionary, the company reported no other committed financing source, and ATM sales could dilute shareholders. The loan arrangements may constrain borrowing and other transactions; Juvenescence may require security over substantially all assets. Potential loan conversion and warrant exercise also present dilution risk.
- Subsequent financing: On April 23, 2021, AgeX borrowed an additional $500 under the amended 2019 facility, due under the facility’s February 14, 2022 maturity.
- Operations and COVID-19: Reduced staffing and laboratory closure defer some development work. The UCI-sponsored PureStem neural-stem-cell research was slowed by pandemic safety procedures; AgeX expected initial work to conclude during 2021. The company said the pandemic’s full effects on operations and financing were uncertain.
- Listing: AgeX had received a NYSE American continued-listing deficiency notice in 2020. It reported regaining compliance on April 15, 2021, while remaining subject to normal monitoring.
- Other: The PPP loan was forgiven in full on February 19, 2021. AgeX reported no material litigation and no off-balance-sheet arrangements. It gave no quantitative revenue, earnings or cash-flow guidance.
Important facts for investors to verify
- Confirm the issuer identity: the supplied filing names AgeX Therapeutics, Inc., despite the request metadata naming Serina Therapeutics, Inc.
- Review the full filing and subsequent reports for cash runway, additional financing, Juvenescence advances and repayment obligations, and any changes to the going-concern assessment.
- Assess the effects of the LifeMap disposal on recurring revenue, cash flows, assets, liabilities and comparability with prior periods.
- Track development-program status and the operational impact of reduced staffing and the laboratory closure.
- Verify continued NYSE American listing compliance and the potential dilution from ATM offerings, convertible loans and warrants.