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Serina Therapeutics, Inc.(SER) - 2024 Q2 - Quarterly Report
SERSerina Therapeutics, Inc.(SER)2024-08-09 20:20

Financial Performance - Revenues for the three and six months ended June 30, 2024, were not material[204]. - The net loss attributable to Serina for the six months ended June 30, 2024, was 9.8million,withnon−cashitemscontributingtothedifferencebetweennetlossandcashusedinoperatingactivities[225].−Otherincomeincreasedto9.8 million, with non-cash items contributing to the difference between net loss and cash used in operating activities[225]. - Other income increased to 9.04 million for Q2 2024, compared to 1.75millioninQ22023,primarilyduetoa1.75 million in Q2 2023, primarily due to a 9.3 million gain from the fair value of liability classified Merger Warrants[210]. - For the six months ended June 30, 2024, other expense netted 3.7million,achangeof3.7 million, a change of 8 million from 4.4millionincomeinthesameperiodin2023,largelyduetoa4.4 million income in the same period in 2023, largely due to a 7 million loss in fair value of Legacy Serina Convertible Notes[211]. Research and Development Expenses - Research and development expenses for Q2 2024 were 1.6million,a232.81.6 million, a 232.8% increase from 0.5 million in Q2 2023[203]. - For the first half of 2024, research and development expenses totaled 2.7million,up207.52.7 million, up 207.5% from 0.9 million in the same period of 2023[204]. - The increase in research and development expenses was primarily due to a non-recurring 0.3millionseveranceexpenseandincreasesinsalariesandconsultingservices[205].−Thecompanyexpectsresearchanddevelopmentexpensestoincreasesubstantiallyasitcontinuestoinvestinproductcandidatedevelopmentandclinicaltrials[194].−Thecompanyanticipatesthatresearchanddevelopmentexpenseswillcontinuetoincreaseasitseekstoadvanceitsproductcandidates[220].GeneralandAdministrativeExpenses−GeneralandadministrativeexpensesforQ22024reached0.3 million severance expense and increases in salaries and consulting services[205]. - The company expects research and development expenses to increase substantially as it continues to invest in product candidate development and clinical trials[194]. - The company anticipates that research and development expenses will continue to increase as it seeks to advance its product candidates[220]. General and Administrative Expenses - General and administrative expenses for Q2 2024 reached 2.3 million, a 391.1% increase compared to 0.5millioninQ22023[203].−Inthefirsthalfof2024,generalandadministrativeexpenseswere0.5 million in Q2 2023[203]. - In the first half of 2024, general and administrative expenses were 3.5 million, reflecting a 232.4% increase from 1.1millioninthesameperiodof2023[204].−Generalandadministrativeexpensesincreasedmainlydueto1.1 million in the same period of 2023[204]. - General and administrative expenses increased mainly due to 0.6 million in professional legal and accounting services related to a merger completed on March 26, 2024[208]. - The company anticipates that general and administrative expenses will rise over the next several years to support ongoing research and development and compliance as a public company[200]. Cash Flow and Financing - As of June 30, 2024, the company had 6.1millionincashandcashequivalents,with6.1 million in cash and cash equivalents, with 2.9 million drawn from the 2022 Secured Note and 4.99millionreceivedfromJuvenescencethroughPost−MergerWarrants[215].−ThenetcashusedinoperatingactivitiesforthesixmonthsendedJune30,2024,was4.99 million received from Juvenescence through Post-Merger Warrants[215]. - The net cash used in operating activities for the six months ended June 30, 2024, was 9.6 million, a significant increase of 509.4% from 1.57millioninthesameperiodin2023[224].−NetcashprovidedbyfinancingactivitiesforthesixmonthsendedJune30,2024,was1.57 million in the same period in 2023[224]. - Net cash provided by financing activities for the six months ended June 30, 2024, was 8.1 million, primarily from the exercise of Post-Merger Warrants and credit facilities[227]. - The company expects to incur substantial expenditures for product development and will require additional financing to continue operations beyond 2025[221]. Internal Controls and Compliance - The company identified material weaknesses in internal controls over financial reporting, including insufficient qualified accounting staff and reliance on manual reporting processes[232]. - A remediation plan has been initiated to address these weaknesses, involving the engagement of financial operations consultants and the appointment of a new Controller for Legacy Serina[235]. - The company believes that its quarterly report fairly presents its financial condition and results of operations, despite the identified weaknesses[230]. - There were no changes in internal control over financial reporting that materially affected its effectiveness during the reporting period[237]. - The company is committed to ongoing monitoring and enhancement of internal controls as necessary, but acknowledges inherent limitations in their effectiveness[237]. - The material weaknesses will not be remediated until the remediation plan is fully developed and tested for effectiveness[236]. - The company has implemented direct management oversight and the use of legal and accounting professionals to mitigate identified weaknesses[233]. - The company is focused on ensuring the reliability of its financial reporting processes moving forward[230]. Legal Matters - A putative shareholder class action lawsuit was filed against the company related to the Merger Agreement, but was dismissed on March 5, 2024[240]. - The company continues to face potential litigation matters that could materially affect future results of operations and financial position[239].