AGE AgeX Therapeutics Inc

AgeX Therapeutics, Inc. (“AgeX”; NYSE American: AGE), a biotechnology company developing therapeutics for human aging and regeneration, reported its financial and operating results for the quarter ended September 30, 2022.

Liquidity and Capital Resources

During the first quarter of 2022, AgeX borrowed the final $0.5 million of its available credit under its 2020 Secured Convertible Facility Agreement with Juvenescence Limited (“Juvenescence”), and entered into a new Secured Convertible Promissory Note (the “Secured Note”) pursuant to which Juvenescence has agreed to provide to AgeX a $13,160,000 line of credit for a period of 12 months. AgeX drew an initial $8,160,000 of the line of credit and used $7,160,000 to refinance the principal and the loan origination fees under its 2019 Loan Agreement with Juvenescence. The $8.0 million principal balance outstanding under the 2020 Loan Agreement will become due and payable upon maturity on March 30, 2023.

During the three months ended September 30, 2022, AgeX borrowed an additional $1.0 million under the Secured Note, and as of November 10, 2022, AgeX had borrowed at total of $11,660,000 with $1.5 million of funds remaining for future borrowings under the Secured Note. The remaining line of credit available may be drawn down from time to time until February 14, 2023 subject to Juvenescence’s discretion to approve each loan draw. The outstanding principal balance of the Secured Note will become due and payable on February 14, 2024.

In addition, AgeX may sell shares of its common stock in “at-the-market” transactions through a Sales Agreement with Chardan Capital, LLC as a sales agent. The market value of common shares that AgeX may sell in any 12 month period during the term of the Sales Agreement will be limited to one-third of aggregate market value of AgeX common stock held by stockholders who would not be considered “affiliates” of AgeX, determined in accordance with applicable SEC rules.

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 Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2022. These factors raise substantial doubt regarding the ability of AgeX to continue as a going concern.

Balance Sheet Information

Cash, and cash equivalents, and restricted cash totaled $0.5 million as of September 30, 2022.

Third Quarter 2022 Operating Results

The following comparisons exclude the impact of the operations of AgeX’s former subsidiary LifeMap Sciences, Inc. (“LifeMap Sciences”) which have been presented in AgeX’s consolidated financial results as discontinued operations for all periods presented due to the disposition of AgeX’s shares of LifeMap Sciences in a cash-out merger during March 2021.

Revenues: Total revenues for the third quarter of 2022 were $9,000 as compared with $24,000 for the third quarter of 2021, primarily due to the expiration of an NIH research grant, the full amount of which was funded as of December 31, 2021. This decrease was offset to some extent by increased sales of research products by $7,000.

Operating expenses: Operating expenses for the three months ended September 30, 2022 were $1.6 million as compared to $1.7 million for the same period in 2021.

Research and development expenses decreased to $0.2 million during the three months ended September 30, 2022 from $0.3 million during the same period of 2021 primarily reflecting a reduction of $0.1 million in scientific consulting and outside research and services expenses under a sponsored research agreement with a university.

General and administrative expenses remained consistent at $1.4 million during the three months ended September 30, 2022 and 2021. An increase of $0.1 million in professional fees for legal services was offset by $0.1 million decrease in consulting expense.

Other expense, net: Total other expense, net for the three months ended September 30, 2022 consists primarily of $0.9 million of amortization of deferred debt issuance costs to interest expense and other debt related expenses included in interest expense offset by $35,000 of unrealized gain on the change in fair value of warrants issued to Juvenescence in connection with borrowings under the Secured Note. Total other expense, net for the three months ended September 30, 2021 consists primarily of $0.3 million of amortization of deferred debt issuance costs to interest expense.

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. AgeX’s PureStem® and UniverCyte™ manufacturing and immunotolerance technologies are designed to work together to generate highly defined, universal, allogeneic, off-the-shelf pluripotent stem cell-derived young cells of any type for application in a variety of diseases with a high unmet medical need. AgeX has two preclinical cell therapy programs: AGEX-VASC1 (vascular progenitor cells) for tissue ischemia and AGEX-BAT1 (brown fat cells) for Type II diabetes. AgeX’s revolutionary longevity platform induced Tissue Regeneration (iTR™) aims to unlock cellular immortality and regenerative capacity to reverse age-related changes within tissues. HyStem® is AgeX’s delivery technology to stably engraft PureStem or other cell therapies in the body. AgeX is seeking opportunities to establish licensing and collaboration arrangements around its broad IP estate and proprietary technology platforms and therapy product candidates.

For more information, please visit www.agexinc.com or connect with the company on Twitter, LinkedIn, Facebook, and YouTube.

Forward-Looking Statements

Certain statements contained in this release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not historical fact including, but not limited to statements that contain words such as “will,” “believes,” “plans,” “anticipates,” “expects,” “estimates” should also be considered forward-looking statements. Forward-looking statements involve risks and uncertainties. Actual results may differ materially from the results anticipated in these forward-looking statements and as such should be evaluated together with the many uncertainties that affect the business of AgeX Therapeutics, Inc. and its subsidiaries, particularly those mentioned in the cautionary statements found in more detail in the “Risk Factors” section of AgeX’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commissions (copies of which may be obtained at www.sec.gov). Subsequent events and developments may cause these forward-looking statements to change. AgeX specifically disclaims any obligation or intention to update or revise these forward-looking statements as a result of changed events or circumstances that occur after the date of this release, except as required by applicable law.

 

AGEX THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except par value amounts)

 

 

September 30,

2022

 

 

December 31,

2021

 

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

466

 

 

$

584

 

Accounts and grants receivable, net

 

 

1

 

 

 

25

 

Prepaid expenses and other current assets

 

 

720

 

 

 

1,625

 

Total current assets

 

 

1,187

 

 

 

2,234

 

 

 

 

 

 

 

 

 

 

Restricted cash

 

 

50

 

 

 

50

 

Intangible assets, net

 

 

771

 

 

 

870

 

TOTAL ASSETS

 

$

2,008

 

 

$

3,154

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

792

 

 

$

771

 

Loan due to Juvenescence, net of debt issuance costs, current portion

 

 

7,298

 

 

 

7,140

 

Related party payables, net

 

 

59

 

 

 

70

 

Warrant liability

 

 

657

 

 

 

-

 

Insurance premium liability and other current liabilities

 

 

3

 

 

 

986

 

Total current liabilities

 

 

8,809

 

 

 

8,967

 

 

 

 

 

 

 

 

 

 

Loan due to Juvenescence, net of debt issuance costs, net of current portion

 

 

8,348

 

 

 

6,062

 

TOTAL LIABILITIES

 

 

17,157

 

 

 

15,029

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value, authorized 5,000 shares; none issued and outstanding as of September 30, 2022 and December 31, 2021

 

 

-

 

 

 

-

 

Common stock, $0.0001 par value, 100,000 shares authorized; and 37,947 and 37,941 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

98,399

 

 

 

93,912

 

Accumulated deficit

 

 

(113,507

)

 

 

(105,748

)

AgeX Therapeutics, Inc. stockholders’ deficit

 

 

(15,104

)

 

 

(11,832

)

Noncontrolling interest

 

 

(45

)

 

 

(43

)

Total stockholders’ deficit

 

 

(15,149

)

 

 

(11,875

)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

$

2,008

 

 

$

3,154

 

AGEX THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(unaudited)

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Grant revenues

 

$

-

 

 

$

22

 

 

$

-

 

 

$

79

 

Other revenues

 

 

9

 

 

 

2

 

 

 

26

 

 

 

38

 

Total revenues

 

 

9

 

 

 

24

 

 

 

26

 

 

 

117

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

(5

)

 

 

(2

)

 

 

(12

)

 

 

(18

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

4

 

 

 

22

 

 

 

14

 

 

 

99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

162

 

 

 

275

 

 

 

817

 

 

 

1,080

 

General and administrative

 

 

1,392

 

 

 

1,421

 

 

 

4,390

 

 

 

5,191

 

Total operating expenses

 

 

1,554

 

 

 

1,696

 

 

 

5,207

 

 

 

6,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on deconsolidation of LifeMap Sciences

 

 

-

 

 

 

-

 

 

 

-

 

 

 

106

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(1,550

)

 

 

(1,674

)

 

 

(5,193

)

 

 

(6,066

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSE, NET:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(923

)

 

 

(285

)

 

 

(2,357

)

 

 

(802

)

Unrealized gain (loss) on change in fair value of warrants

 

 

35

 

 

 

-

 

 

 

(220

)

 

 

-

 

Other income, net

 

 

2

 

 

 

4

 

 

 

9

 

 

 

445

 

Total other expense, net

 

 

(886

)

 

 

(281

)

 

 

(2,568

)

 

 

(357

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS FROM CONTINUING OPERATIONS

 

 

(2,436

)

 

 

(1,955

)

 

 

(7,761

)

 

 

(6,423

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS FROM DISCONTINUED OPERATIONS

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(103

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

(2,436

)

 

 

(1,955

)

 

 

(7,761

)

 

 

(6,526

)

Net loss attributable to noncontrolling interest from continuing operations

 

 

1

 

 

 

-

 

 

 

2

 

 

 

2

 

Net loss attributable to noncontrolling interest from discontinued operations

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS ATTRIBUTABLE TO AGEX

 

$

(2,435

)

 

$

(1,955

)

 

$

(7,759

)

 

$

(6,517

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.06

)

 

$

(0.05

)

 

$

(0.20

)

 

$

(0.17

)

Discontinued operations

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

$

(0.06

)

 

$

(0.05

)

 

$

(0.20

)

 

$

(0.17

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED

 

 

37,946

 

 

 

37,938

 

 

 

37,944

 

 

 

37,868

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AMOUNTS ATTRIBUTABLE TO AGEX:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations

 

$

(2,435

)

 

$

(1,955

)

 

$

(7,759

)

 

$

(6,421

)

Loss from discontinued operations

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(96

)

NET LOSS ATTRIBUTABLE TO AGEX

 

$

(2,435

)

 

$

(1,955

)

 

$

(7,759

)

 

$

(6,517

)

AGEX THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

 

(unaudited)

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss attributable to AgeX from continuing operations

 

$

(7,759

)

 

$

(6,421

)

Net loss attributable to noncontrolling interest

 

 

(2

)

 

 

(2

)

Adjustments to reconcile net loss attributable to AgeX to net cash used in operating activities:

 

 

 

 

 

 

 

 

Gain on deconsolidation of LifeMap Sciences

 

 

-

 

 

 

(106

)

Gain on extinguishment of debt (Paycheck Protection Program Loan)

 

 

-

 

 

 

(437

)

Unrealized loss on change in fair value of warrants

 

 

220

 

 

 

-

 

Amortization of intangible assets

 

 

99

 

 

 

98

 

Amortization of debt issuance costs

 

 

2,221

 

 

 

820

 

Stock-based compensation

 

 

646

 

 

 

736

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts and grants receivable

 

 

24

 

 

 

129

 

Prepaid expenses and other current assets

 

 

906

 

 

 

682

 

Accounts payable and accrued liabilities

 

 

(98

)

 

 

(619

)

Related party payables

 

 

110

 

 

 

-

 

Insurance premium liability

 

 

(983

)

 

 

(921

)

Other current liabilities

 

 

(2

)

 

 

(77

)

Net cash used in operating activities from continuing operations

 

 

(4,618

)

 

 

(6,118

)

Net cash used in operating activities from discontinued operations

 

 

-

 

 

 

(90

)

Net cash used in operating activities

 

 

(4,618

)

 

 

(6,208

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from the sale of LifeMap Sciences

 

 

-

 

 

 

466

 

Partial collection on loan due from LifeMap Sciences

 

 

-

 

 

 

250

 

Net cash provided by investing activities from continuing operations

 

 

-

 

 

 

716

 

Deconsolidation of cash and cash equivalents from discontinued operations

 

 

-

 

 

 

(50

)

Net cash provided by investing activities

 

 

-

 

 

 

666

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Draw down on loan facilities from Juvenescence

 

 

4,500

 

 

 

5,500

 

Proceeds from the issuance of common stock

 

 

-

 

 

 

496

 

Net cash provided by financing activities from continuing operations

 

 

4,500

 

 

 

5,996

 

Partial payment on loan due to AgeX from discontinued operations

 

 

-

 

 

 

(250

)

Net cash provided by financing activities

 

 

4,500

 

 

 

5,746

 

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(118

)

 

 

204

 

 

 

 

 

 

 

 

 

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

 

 

 

 

 

 

 

 

At beginning of the period

 

 

634

 

 

 

577

 

At end of the period

 

$

516

 

 

$

781

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221110005519/en/

Contact for AgeX: Andrea Park apark@agexinc.com (510) 671-8620