Serina Therapeutics, Inc.(US:SER)2024-03-22 21:27Financial Performance - Net loss from operations for the year ended December 31, 2023, was $9.9 million, compared to $7.0 million for 2022, indicating a 41.4% increase in losses year-over-year[447]. - For the year ended December 31, 2023, the net loss attributable to AgeX was $14.8 million, compared to a net loss of $10.5 million for the previous year, representing a 40% increase in losses[498][515]. - AgeX reported a net loss of $14.803 million for the year ended December 31, 2023, compared to a net loss of $10.462 million for the previous year, representing a 42.5% increase in losses[521]. - The company expects to continue incurring operating losses and negative cash flows for the foreseeable future[447]. - The company expects to continue incurring operating losses and negative cash flows, raising concerns about its ability to continue as a going concern[492]. - Net cash used in operating activities was $7.8 million for 2023, an increase from $5.9 million in 2022, indicating a worsening cash flow situation[497][498]. - The company incurred total operating expenses of $10.1 million in 2023, up from $7.0 million in 2022, reflecting a 44% increase[515]. - Cash and cash equivalents decreased to $345,000 as of December 31, 2023, down from $645,000 in 2022, indicating a decline in liquidity[511]. - AgeX's cash used in operating activities was $7.8 million for 2023, an increase from $5.939 million in 2022, reflecting higher operational expenditures[521]. - The accumulated deficit reached $131.0 million, reflecting the ongoing financial challenges faced by the company[447]. Revenue and Grants - For the year ended December 31, 2023, total revenues increased to $142,000 from $34,000 in 2022, representing a growth of 417.6%[476]. - Grant revenues recognized in 2023 amounted to $77,000, a significant increase from $0 in 2022[478]. - Total revenues for 2023 were $142,000, significantly up from $34,000 in 2022, marking a 317% increase[515]. - AgeX incurred approximately $77,000 of allowable expenses under the NIH grant and recognized a corresponding amount of grant revenues for the year ended December 31, 2023[584]. - The company was awarded a grant of up to approximately $341,000 from the NIH for the development of technologies to treat cardiovascular disease over a one-year period starting September 1, 2023[584]. Expenses and Liabilities - Research and development expenses decreased by 28.4% to $734,000 in 2023 from $1,025,000 in 2022[481]. - General and administrative expenses rose by 56.2% to $9,328,000 in 2023 compared to $5,971,000 in 2022, primarily due to increased professional fees[483]. - Accounts payable and accrued liabilities increased significantly from $1,034,000 in 2022 to $2,176,000 in 2023, representing a growth of about 110%[605]. - The company has established a full valuation allowance for deferred tax assets due to uncertainty in realizing future tax benefits[490]. - The company has drawn down the entire $4.4 million line of credit from Juvenescence, with no other commitments for additional financing[491]. Mergers and Acquisitions - The planned merger with Serina Therapeutics, Inc. is expected to substantially change the company's future business focus and operations[443]. - The company plans to merge with Serina Therapeutics, with Serina stockholders expected to own approximately 75% of the combined entity post-merger[530]. - The Combined Company will primarily focus on developing Serina's product candidates post-Merger, potentially discontinuing AgeX's product development[534]. - AgeX's merger agreement with Serina was approved by stockholders, indicating a significant strategic move for future growth[528]. - The Merger with Serina is critical for AgeX's future, as failure to complete it may lead to delisting from NYSE America and potential dissolution[534]. Capital Structure and Financing - In July 2023, the company exchanged $36 million of debt for preferred stock, significantly altering its capital structure[494]. - AgeX issued preferred stock worth $36 million in exchange for debt, enhancing its financial position[521]. - AgeX raised $17.5 million through financing activities in 2023, primarily from credit facilities with Juvenescence, compared to $6.0 million in 2022[497][500]. - AgeX borrowed a total of $20,160,000 under the 2022 Secured Note, with $7,500,000 borrowed during the year ended December 31, 2023[624]. - AgeX has a provision in the 2023 Secured Note allowing conversion of the loan balance into common stock if at least $10,000,000 is raised from a sale of common stock or units[636]. Assets and Intangible Assets - AgeX's intangible assets, primarily consisting of acquired IPR&D and patents, were recorded with an estimated useful life of 10 years, amortized over that period[600]. - Total intangible assets, net decreased from $738,000 in 2022 to $607,000 in 2023, reflecting a decline of approximately 17.7%[603]. - The acquisition of UniverCyte™ technology involved a total cost of $1.3 million, including cash and stock, and is intended for the development of AGEX-BAT1 and AGEX-VASC1 products[599]. - AgeX will pay a royalty of less than 1% on net sales of products under the acquired patents if commercialized, along with potential additional shares valued at up to $4.3 million upon achieving development milestones[601]. Accounting and Compliance - The company has elected to comply with newly adopted or revised accounting standards as they become applicable, foregoing the extended transition period allowed for emerging growth companies[444]. - AgeX recognizes stock-based compensation expense related to employee option grants and restricted stock grants in accordance with ASC 718[564]. - The total amount of unrecognized tax benefits is not expected to materially change over the next twelve months[575]. - The company adopted several accounting standards effective January 1, 2023, which did not have a material impact on the consolidated financial statements[593][594][595].