Serina Therapeutics, Inc.(SER) - 2025 Q2 - Quarterly Report

Part I – FINANCIAL INFORMATION Financial Statements The company's net loss increased to $11.3 million in H1 2025, with a going concern qualification issued due to insufficient funding Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $6,041 | $3,672 | | Total current assets | $7,991 | $5,676 | | TOTAL ASSETS | $8,941 | $6,724 | | Liabilities & Equity | | | | Total current liabilities | $3,561 | $2,366 | | TOTAL LIABILITIES | $7,295 | $6,216 | | Total stockholders' equity | $1,646 | $508 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $8,941 | $6,724 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Total revenues | $130 | $56 | | Research and development | $6,103 | $2,700 | | General and administrative | $5,450 | $3,543 | | Loss from operations | $(11,423) | $(6,187) | | NET LOSS | $(11,284) | $(9,838) | | NET LOSS PER COMMON SHARE (BASIC & DILUTED) | $(1.15) | $(1.74) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,072) | $(9,586) | | Net cash used in investing activities | $(46) | $(14) | | Net cash provided by financing activities | $10,487 | $8,095 | | NET CHANGE IN CASH AND CASH EQUIVALENTS | $2,369 | $(1,505) | - Management has concluded there is substantial doubt about the Company's ability to continue as a going concern, as cash and cash equivalents of $6.0 million are not expected to be sufficient to fund operations for the next twelve months[35][37] Note 1. Organization, Business Overview and Liquidity Serina is a clinical-stage biotechnology company that faces substantial doubt about its ability to continue as a going concern due to significant operating losses - The company's POZ drug delivery technology is designed to improve the efficacy and safety of existing drugs by enabling greater control in drug loading and precision in the rate of release[29] - On March 26, 2024, the company completed a reverse merger with AgeX Therapeutics, Inc, with Legacy Serina surviving as the primary business[27][28] - The company's financial condition, including a net loss of $11.3 million for the six months ended June 30, 2025, and cash usage of $8.1 million in operating activities, has led to a going concern warning[34][35] Note 7. Stockholders' Equity The company raised capital through a $4.9 million private placement of preferred stock and initiated a $13.3 million At-the-Market (ATM) offering - On April 8, 2025, the company raised net proceeds of $4.9 million from a private placement of 965,250 shares of Series A Convertible Preferred Stock at $5.18 per share[79] - On April 25, 2025, the company initiated an At-the-Market (ATM) offering to sell up to $13.3 million of its common stock; as of June 30, 2025, it had sold 124,454 shares for net proceeds of $0.6 million[91] - The company has several classes of warrants outstanding, including Post-Merger Warrants and Incentive Warrants, which are classified as liabilities and subject to fair value adjustments[83][86][88] Note 11. Commitments and Contingencies The company's commitments include operating leases totaling $0.4 million and a $2.0 million partnership with Enable Injections, Inc - In May 2024, the company partnered with Enable Injections, Inc to develop and commercialize SER-252 (POZ-apomorphine) for Parkinson's disease, paying $2.0 million for the arrangement[113] - The company leases its lab and office facilities under non-cancelable operating lease agreements expiring between October 2025 and January 2028[103] Management's Discussion and Analysis of Financial Condition and Results of Operations Operating expenses increased significantly, and the company's cash position of $6.0 million is insufficient to fund operations for the next year Comparison of Operating Results (in thousands) | Period | Research & Development | General & Administrative | Loss from Operations | | :--- | :--- | :--- | :--- | | Three months ended June 30, 2025 | $3,152 | $2,543 | $(5,565) | | Three months ended June 30, 2024 | $1,594 | $2,323 | $(3,866) | | Six months ended June 30, 2025 | $6,103 | $5,450 | $(11,423) | | Six months ended June 30, 2024 | $2,700 | $3,543 | $(6,187) | - The increase in R&D expenses for H1 2025 was primarily due to a $1.8 million increase in outside research services and a $1.3 million increase in salaries and related costs from higher headcount[150][151] - The increase in G&A expenses for H1 2025 was driven by a $1.2 million increase in salaries and stock-based compensation and a $0.8 million increase in consulting fees for finance functions[153] - The company's cash on hand of $6.0 million is not sufficient to fund operations for the next twelve months, necessitating additional capital raising to avoid curtailing planned operations[162][165] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Serina Therapeutics, Inc is not required to provide the information for this item - The company is not required to provide quantitative and qualitative disclosures about market risk because it qualifies as a smaller reporting company[174] Controls and Procedures Management concluded that disclosure controls were not effective as of June 30, 2025, due to several material weaknesses - Management determined that disclosure controls and procedures were not effective as of June 30, 2025[175] - Identified material weaknesses include insufficient qualified accounting personnel, lack of segregation of duties, reliance on manual reporting processes, and lack of experience in monitoring internal controls[178] - The company has begun a remediation plan, which includes hiring professionals with public company accounting experience and implementing enhanced processes and system automation[180][184] Part II – OTHER INFORMATION Legal Proceedings As of the reporting date, the company is not a party to any material legal proceedings - The company is not currently involved in any material legal proceedings[186] Risk Factors Key risks include potential stock price decline from the ATM offering and unpredictable FDA regulatory approval timelines - Sales of a substantial number of shares under the $13.3 million ATM offering could cause the company's stock price to decline[187] - The company faces risks from the inherently unpredictable and lengthy FDA regulatory approval process, which could be impacted by external factors like government agency disruptions[188][189] Unregistered Sales of Equity Securities and Use of Proceeds Information regarding unregistered sales of equity securities has been previously reported - This item was previously reported[190] Other Information During the second quarter of 2025, none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the three months ended June 30, 2025[193] Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications and agreements related to recent securities purchases - A list of exhibits filed with the report is provided, including the Certificate of Designations for the Series A Preferred Stock and the associated Securities Purchase Agreement[194]