AgeX Therapeutics, Inc. (“AgeX”; NYSE American: AGE), a
biotechnology company developing therapeutics for human aging and
regeneration, reported its financial and operating results for
fourth quarter and the full year ended December 31, 2023 and recent
highlights.
Recent Highlights
|
● |
Stockholders approved
transactions for merger with Serina Therapeutics, Inc. |
|
● |
Obtained $4.4 million addition to
line of credit from Juvenescence Limited |
|
● |
Preferred Stock converted into
Common Stock |
|
● |
Completed reverse stock split at
a ratio of 1 for 35.17 |
|
|
|
Liquidity and Capital Resources
Issuance of Preferred Stock to Eliminate $36
Million of Indebtedness and Conversion to Common Stock
During July 2023, AgeX and Juvenescence Limited
entered into an Exchange Agreement pursuant to which AgeX issued
shares of Series A Preferred Stock and Series B Preferred Stock to
Juvenescence in exchange for the extinguishment of a total of $36
million of indebtedness under a loan agreement and certain
promissory notes. The Series A Preferred Stock and Series B
Preferred Stock automatically converted into shares of AgeX common
stock on February 1, 2024.
Increase in Line of Credit
On November 8, 2023, AgeX’s secured, convertible
line of credit from Juvenescence Limited was increased by
$4,400,000, subject to Juvenescence’s discretion to approve and
fund each of AgeX’s future loan draws.
On February 9, 2024, the repayment date of
AgeX’s borrowings under Juvenescence line of credit was extended
from February 14, 2024 to May 9, 2024.
Balance Sheet Information
Cash, cash equivalents, and restricted cash
totaled $0.3 million as of December 31, 2023. As of December 31,
2023, AgeX owed Juvenescence Limited $4.5 million in principal and
origination fees on account of loans extended to AgeX.
Fourth Quarter and Annual 2023 Operating
Results
Operating expenses: Operating expenses for the
three months ended December 31, 2023 were $3.6 million as compared
with $1.8 million for the same period of 2022. Operating expenses
for the full year 2023 were $10.1 million as compared with $7.0
million in the same period of 2022.
Research and development expenses for the year
ended December 31, 2022 decreased by more than $0.3 million to $0.7
million from approximately $1.0 million in 2022. The net decrease
was primarily attributable to reductions of $0.2 million in outside
research and services allocable to research and development
expenses and $0.1 million in salaries and payroll related expenses
allocated to research and development expenses.
General and administrative expenses for the year
ended December 31, 2023 increased by $3.3 million to $9.3 million
from approximately $6.0 million in 2022. The net increase is
attributable to increases of $2.5 million in professional fees for
legal services, professional fees for tax and accounting services,
and consulting expenses incurred in connection with due diligence
and other expenses related to the planned merger with Serina
Therapeutics, Inc (“Serina”), $0.4 million for the write off of
prepaid expenses incurred in prior periods related to a shelf
registration statement for an at-the-market offering of AgeX common
stock that expired in January 2024, $0.4 million estimated
litigation fees, $0.2 million in salaries, consulting fees, and
payroll related expenses, including severance related expenses
arising under a Transition Services and Separation Agreement with
our former Chief Executive Officer, $0.1 million in investor
relations related expenses, and $0.1 million in insurance expense,
allocated to general and administrative expenses. These increases
were offset to some extent by a $0.2 million decrease in minimum
royalty fees resulting from the termination of certain license and
sub-license agreements, $0.1 million net decrease in non-cash
stock-based compensation to employees, consultants and directors,
and a $0.1 million decrease in patent and license maintenance
related fees.
Other expense, net: Net other expense for the
year ended December 31, 2023 consists primarily of $5.4 million of
amortization of deferred debt costs on loans from Juvenescence,
write off of deferred debt cost upon $36 million debt exchanged for
preferred stock in July 2023, and other debt related expenses
included in interest expense, offset by $0.5 million net interest
income primarily earned from a promissory note from Serina. Other
expense, net in 2022 consists primarily of $3.3 million of
amortization of deferred debt issuance costs on loans from
Juvenescence to interest expense, and $0.2 million change in fair
value of warrants issued to Juvenescence in connection with
borrowings under the 2022 Secured Note.
Net loss attributable to AgeX: The net loss
attributable to AgeX for the year ended December 31, 2023 was $14.8
million, or ($13.73) per share (basic and diluted), compared to
$10.5 million, or ($9.70) per share (basic and diluted), for
2022.
Going Concern Considerations
As required under Accounting Standards Update
2014-15, Presentation of Financial Statements-Going Concern (ASC
205-40), AgeX evaluates whether conditions and/or events raise
substantial doubt about its ability to meet its future financial
obligations as they become due within one year after the date its
financial statements are issued. Based on AgeX’s most recent
projected cash flows, AgeX believes that its cash and cash
equivalents and available sources of debt and equity capital would
not be sufficient to satisfy AgeX’s anticipated operating and other
funding requirements for the twelve months following the filing of
AgeX’s Annual Report on Form 10-K for the year ended December 31,
2023. These factors raise substantial doubt regarding the ability
of AgeX to continue as a going concern.
About AgeX Therapeutics
AgeX Therapeutics, Inc. (NYSE American: AGE) is
focused on developing and commercializing innovative therapeutics
to treat human diseases to increase healthspan and combat the
effects of aging. For more information, please visit
www.agexinc.com or connect with the company on Twitter, LinkedIn,
Facebook, and YouTube.
Cautionary Statement Regarding
Forward-Looking Statements
Certain statements contained in this
communication regarding matters that are not historical facts are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the “Securities Act”), and
Section 21E of the Securities Exchange Act of 1934, as amended, and
the Private Securities Litigation Reform Act of 1995, known as the
PSLRA. These include statements regarding the anticipated
completion and effects of the planned merger with Serina (the
“Merger”) and other statements regarding management’s intentions,
plans, beliefs, expectations or forecasts for the future. All
forward-looking statements are based on assumptions or judgments
about future events and economic conditions that may or may not be
correct or necessarily take place and that are by their nature
subject to significant risks, uncertainties and contingencies. You
are cautioned not to place undue reliance on these forward-looking
statements. No forward-looking statement can be guaranteed, and
actual results may differ materially from those projected.
Statements that contain words such as “anticipates,” “believes,”
“plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,”
“should,” “could,” “estimates,” “predicts,” “potential,”
“continue,” “guidance,” and similar expressions to identify these
forward-looking statements that are intended to be covered by the
safe-harbor provisions of the PSLRA.
There are a number of risks and uncertainties
that could cause actual results to differ materially from the
forward-looking statements included in this communication. With
respect to the Merger, these risks and uncertainties include: one
or more conditions to consummating the Merger may not be satisfied;
one or more material agreements that may be entered into in
connection with the Merger may be terminated by a party to the
agreement; AgeX or the combined company after the Merger may be
unable to obtain approval to list on the NYSE American the shares
of AgeX common stock expected to be issued pursuant to the Merger;
and the closing of the Merger might be delayed or not occur at all.
In addition, the Merger could cause AgeX to face additional risks,
including risks associated with conducting and financing Serina’s
current or future research and product development programs,
including risks that those research and development programs will
not result in the development of products or technologies with the
desired clinical utility, benefits, or market acceptance; risks
associated with conducting clinical trials of Serina product
candidates and obtaining Food and Drug Administration or other
regulatory approvals to market product candidates, including risks
with respect to the timing of initiation of Serina’s planned
clinical trials, the timing of the availability of data or other
results from clinical trials, and the timing of any planned
investigational new drug application or new drug application; risks
associated with the combined company’s ability to identify
additional products or product candidates with significant
commercial potential; risks associated with AgeX’s, Serina’s or the
combined company’s ability to protect its intellectual property
position; product liability risks; the risk that the cash balance
of the combined company following the closing of the Merger will be
lower than expected or reduced; the risk that the combined
company’s anticipated sources and related timing of financing
following the closing of the Merger will not provide proceeds
necessary to fund the operations of the combined company for as
long as anticipated; the risk that the transactions contemplated by
the Side Letter entered into by AgeX, Serina and Juvenescence
Limited on August 29, 2023 are not completed in a timely manner or
at all; risks associated with AgeX’s or Serina’s estimates
regarding future revenue, expenses, capital requirements, and need
for additional financing following the Merger; risks associated
with the ability of AgeX and the combined company to remain listed
on the NYSE American; the risk that products may not be
successfully commercialized or that the combined company might not
otherwise be able to generate sufficient revenues to operate at a
profit; potential adverse changes to business or employee
relationships, including those resulting from the announcement or
completion of the Merger; the risk that changes in AgeX’s capital
structure, management, business, and governance following the
Merger could have adverse effects on the market value of its common
stock; the ability of AgeX and Serina to retain customers and
retain and hire key personnel and maintain relationships with their
suppliers and customers; risks associated with Serina’s or the
combined company’s ability to successfully collaborate with
Serina’s existing collaborators or enter into new collaborations,
or to fulfill its obligations under any such collaboration
agreements; risks associated with the combined company’s
commercialization, marketing and manufacturing capabilities and
strategy; the risk that pursuing and completing the Merger and
related transactions could distract AgeX and Serina management from
their respective ongoing business operations or cause AgeX and
Serina to incur substantial costs; risks associated with
competition and developments in the industry in which the combined
company will operate; the impact of world health events and any
related economic downturn; the risk of changes in governmental
regulations or enforcement practices; AgeX’s and Serina’s ability
to meet guidance, market expectations, and internal projections;
the impact of AgeX stockholders having their percentage ownership
interests in AgeX reduced by the issuance of AgeX common stock to
Serina stockholders in the Merger and by the issuance of shares of
AgeX common stock upon the exercise of pre-merger warrants by
Juvenescence, and other important factors that could cause actual
results to differ materially from those projected or expected by
AgeX management or stockholders. The effects of many of such
factors are difficult to predict and may be beyond AgeX’s or
Serina’s control.
New factors emerge from time to time, and it is
not possible for us to predict all such factors, nor can we assess
the impact of each such factor on the business or the extent to
which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any
forward-looking statements. Additional factors that could cause
actual results to differ materially from the results anticipated in
these forward-looking statements are contained in the AgeX’s Annual
Report on Form 10-K for the twelve months ended December 31, 2023,
in AgeX’s other periodic reports filed with the SEC, and in AgeX’s
most recent Proxy Statement/Prospectus/Information Statement, under
the heading “Risk Factors,” and in other filings that AgeX may make
with the SEC. Forward-looking statements included in this
communication are based on information available to AgeX and Serina
as of the date of this communication. Undue reliance should not be
placed on these forward-looking statements that speak only as of
the date they are made, and except as required by law, AgeX and
Serina each disclaims any intent or obligation to update these
forward-looking statements.
Contact for AgeX:
Andrea E. Parkapark@agexinc.com(510) 671-8620
AGEX THERAPEUTICS, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(In thousands, except par value amounts)
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
345 |
|
|
$ |
645 |
|
Accounts and grants receivable, net |
|
|
57 |
|
|
|
4 |
|
Prepaid expenses and other current assets |
|
|
352 |
|
|
|
1,804 |
|
Total current assets |
|
|
754 |
|
|
|
2,453 |
|
|
|
|
|
|
|
|
|
|
Restricted cash |
|
|
50 |
|
|
|
50 |
|
Intangible assets, net |
|
|
607 |
|
|
|
738 |
|
Convertible note
receivable |
|
|
10,554 |
|
|
|
- |
|
TOTAL ASSETS |
|
$ |
11,965 |
|
|
$ |
3,241 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’
EQUITY/(DEFICIT) |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
2,176 |
|
|
$ |
1,034 |
|
Loans due to Juvenescence, net of debt issuance costs, current
portion |
|
|
3,672 |
|
|
|
7,646 |
|
Related party payables, net |
|
|
66 |
|
|
|
141 |
|
Warrant liability |
|
|
- |
|
|
|
180 |
|
Insurance premium liability and other current liabilities |
|
|
- |
|
|
|
1,077 |
|
Total current liabilities |
|
|
5,914 |
|
|
|
10,078 |
|
|
|
|
|
|
|
|
|
|
Loans due to Juvenescence, net
of debt issuance costs, net of current portion |
|
|
693 |
|
|
|
10,478 |
|
TOTAL LIABILITIES |
|
|
6,607 |
|
|
|
20,556 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity/(deficit): |
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 5,000 shares authorized: |
|
|
|
|
|
|
|
|
Series A preferred stock; no par value; stated value $100 per
share; 212 and nil shares issued and outstanding, respectively |
|
|
- |
|
|
|
- |
|
Series B preferred stock; no par value; stated value $100 per
share; 148 and nil shares issued and outstanding, respectively |
|
|
- |
|
|
|
- |
|
Common stock, $0.0001 par value, 200,000 shares authorized, 1,079
shares issued and outstanding |
|
|
- |
|
|
|
- |
|
Additional paid-in capital |
|
|
136,482 |
|
|
|
98,998 |
|
Accumulated deficit |
|
|
(131,013 |
) |
|
|
(116,210 |
) |
Total AgeX Therapeutics, Inc. stockholders’ equity/(deficit) |
|
|
5,469 |
|
|
|
(17,212 |
) |
Noncontrolling interest |
|
|
(111 |
) |
|
|
(103 |
) |
Total stockholders’
equity/(deficit) |
|
|
5,358 |
|
|
|
(17,315 |
) |
TOTAL LIABILITIES, CONVERTIBLE
PREFERRED STOCK AND STOCKHOLDERS’ EQUITY/(DEFICIT) |
|
$ |
11,965 |
|
|
$ |
3,241 |
|
AGEX THERAPEUTICS, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share data)
|
|
Year Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
REVENUES |
|
|
|
|
|
|
|
|
Grant revenues |
|
$ |
77 |
|
|
$ |
- |
|
Other revenues |
|
|
65 |
|
|
|
34 |
|
Total revenues |
|
|
142 |
|
|
|
34 |
|
Cost of sales |
|
|
(40 |
) |
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
102 |
|
|
|
21 |
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
Research and development |
|
|
734 |
|
|
|
1,025 |
|
General and administrative |
|
|
9,328 |
|
|
|
5,971 |
|
Total operating expenses |
|
|
10,062 |
|
|
|
6,996 |
|
|
|
|
|
|
|
|
|
|
Gain on disposition of fixed
assets |
|
|
73 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(9,887 |
) |
|
|
(6,975 |
) |
|
|
|
|
|
|
|
|
|
OTHER EXPENSE,
NET |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(4,900 |
) |
|
|
(3,335 |
) |
Change in fair value of warrants |
|
|
(35 |
) |
|
|
(225 |
) |
Other income, net |
|
|
11 |
|
|
|
13 |
|
Total other expense, net |
|
|
(4,924 |
) |
|
|
(3,547 |
) |
|
|
|
|
|
|
|
|
|
NET LOSS |
|
|
(14,811 |
) |
|
|
(10,522 |
) |
Net loss attributable to noncontrolling interest |
|
|
8 |
|
|
|
60 |
|
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE
TO AGEX |
|
$ |
(14,803 |
) |
|
$ |
(10,462 |
) |
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON
SHARE: |
|
|
|
|
|
|
|
|
BASIC AND DILUTED |
|
$ |
(13.72 |
) |
|
$ |
(9.70 |
) |
|
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
BASIC AND DILUTED |
|
|
1,079 |
|
|
|
1,079 |
|
AGEX THERAPEUTICS, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands)
|
|
Year Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
OPERATING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Net loss attributable to
AgeX |
|
$ |
(14,803 |
) |
|
$ |
(10,462 |
) |
Net loss attributable to
noncontrolling interest |
|
|
(8 |
) |
|
|
(60 |
) |
Adjustments to reconcile net
loss attributable to AgeX to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Change in fair value of warrants |
|
|
35 |
|
|
|
225 |
|
Amortization of intangible assets |
|
|
131 |
|
|
|
132 |
|
Amortization of debt issuance costs |
|
|
5,285 |
|
|
|
3,137 |
|
Stock-based compensation |
|
|
648 |
|
|
|
760 |
|
Gain on disposition of fixed assets |
|
|
(73 |
) |
|
|
- |
|
Write off of prepaid shelf registration statement related
expenses |
|
|
360 |
|
|
|
- |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts and grants receivable |
|
|
(53 |
) |
|
|
21 |
|
Prepaid expenses and other current assets |
|
|
1,092 |
|
|
|
896 |
|
Interest on convertible note receivable |
|
|
(554 |
) |
|
|
- |
|
Accounts payable and accrued liabilities |
|
|
1,150 |
|
|
|
144 |
|
Related party payables |
|
|
69 |
|
|
|
255 |
|
Insurance premium liability |
|
|
(1,075 |
) |
|
|
(983 |
) |
Other current liabilities |
|
|
(4 |
) |
|
|
(4 |
) |
Net cash used in operating
activities |
|
|
(7,800 |
) |
|
|
(5,939 |
) |
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Cash advanced on convertible note receivable |
|
|
(10,000 |
) |
|
|
- |
|
Net cash used in investing
activities |
|
|
(10,000 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Draw down on loan facilities from Juvenescence |
|
|
17,500 |
|
|
|
6,000 |
|
Net cash provided by financing
activities |
|
|
17,500 |
|
|
|
6,000 |
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH,
CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
(300 |
) |
|
|
61 |
|
|
|
|
|
|
|
|
|
|
CASH, CASH EQUIVALENTS
AND RESTRICTED CASH: |
|
|
|
|
|
|
|
|
At beginning of the year |
|
|
695 |
|
|
|
634 |
|
At end of the year |
|
$ |
395 |
|
|
$ |
695 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid during the year for interest |
|
$ |
27 |
|
|
$ |
14 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL SCHEDULE OF
NONCASH FINANCING AND INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Issuance of preferred stock in exchange for debt |
|
$ |
36,000 |
|
|
$ |
- |
|
Issuance of common stock upon vesting of restricted stock
units |
|
$ |
2 |
|
|
$ |
8 |
|
Issuance of warrants for debt issuance under the 2020 Loan
Agreement |
|
$ |
- |
|
|
$ |
178 |
|
Fair value of liability classified warrants at debt inception
date |
|
$ |
663 |
|
|
$ |
4,148 |
|
Debt refinanced with new debt |
|
$ |
- |
|
|
$ |
7,160 |
|
AgeX Therapeutics (AMEX:AGE)
Historical Stock Chart
From Jul 2024 to Aug 2024
AgeX Therapeutics (AMEX:AGE)
Historical Stock Chart
From Aug 2023 to Aug 2024