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What changed in Serina Therapeutics, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Serina Therapeutics, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+487 added−524 removedSource: 10-K (2023-12-31) vs 10-K (2022-12-31)

Top changes in Serina Therapeutics, Inc.'s 2023 10-K

487 paragraphs added · 524 removed · 311 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

104 edited+28 added−85 removed144 unchanged
Biggest changeThe timing and method of the full or partial repeal or amendment of the ACA or the adoption of new healthcare legislation remains uncertain, but impending changes will likely impact the number of patient lives covered, the quality of the insurance, Medicaid eligibility and the level of patient protections provided. 29 Other legislative and regulatory actions that would have a significant impact include: changes to how the Medicare program covers and reimburses current and future drugs, changes in the Federal payment rate or new rebate requirements for covered drugs and policies for payment in Medicare or Medicaid; and changes to coverage and payment for biosimilars, including the current Medicare biosimilar coverage and payment policies intended to encourage biosimilar adoption, or other policies that provide easier substitution or reimbursement advantages.
Biggest changeOther legislative and regulatory actions that would have a significant impact include: changes to coverage and payment for biosimilars, including the current Medicare biosimilar coverage and payment policies intended to encourage biosimilar adoption, or other policies that provide easier substitution or reimbursement advantages.
During pre- and post-natal development, skin cells become increasingly incapable of scarless regeneration as reflected in increasing COX7A1 expression. iPS cell reprograming reverts cells back to pluripotency, while AgeX-iTR1547 reverts cells back only to a point prior to the Weismann Barrier (regenerative state). 18 Status and Development Plan The product candidates we have chosen are in the discovery stage of development.
During pre- and post-natal development, skin cells become increasingly incapable of scarless regeneration as reflected in increasing COX7A1 expression. iPS cell reprograming reverts cells back to pluripotency, while AgeX-iTR1547 reverts cells back only to a point prior to the Weismann Barrier (regenerative state). Status and Development Plan The product candidates we have chosen are in the discovery stage of development.
UniverCyte™: AgeX’s pioneering technology to genetically modify allogeneic donor cells to potentially become hypoimmunogenic/universal, so they can potentially be transplanted into all patients in an off-the- shelf manner, without the normal need for human leukocyte antigen (HLA) matching between donor and receipt or immunosuppression. UniverCyte utilizes a potent molecule called HLA-G.
UniverCyte™ : AgeX’s pioneering technology designed to genetically modify allogeneic donor cells to potentially become hypoimmunogenic/universal, so they can potentially be transplanted into all patients in an off-the- shelf manner, without the normal need for human leukocyte antigen (HLA) matching between donor and receipt or immunosuppression. UniverCyte utilizes a potent molecule called HLA-G.
MSCs neither engraft nor become specialized cells. On the other hand, cells derived from PureStem progenitors will be young, not prone to the disadvantages associated with older cells, and are expected to become permanently engrafted in the body to deliver a true regenerative outcome. To date, AgeX has isolated more than 200 cell types from PureStem. 2.
MSCs neither engraft nor become specialized cells. On the other hand, cells derived from PureStem progenitors will be engineered to be young, not prone to the disadvantages associated with older cells, and are expected to become permanently engrafted in the body to deliver a true regenerative outcome. To date, AgeX has isolated more than 200 cell types from PureStem. 2.
We have assigned to Reverse Bio our patent portfolio for iTR development, but the future operations of Reverse Bio will depend in large measure on its ability to raise its own capital. 10 Each of these models may provide particular benefits to AgeX in terms of financing and efficiency of operations. However, each alternative has potential disadvantages as well.
We have assigned to Reverse Bio our patent portfolio for iTR development, but the future operations of Reverse Bio will depend in large measure on its ability to raise its own capital. Each of these models may provide particular benefits to AgeX in terms of financing and efficiency of operations. However, each alternative has potential disadvantages as well.
We have filed patent applications on the use of iTR in a wide array of degenerative conditions including cancer. 5. ESI Cell Lines: AgeX has six clinical-grade human embryonic stem cell lines, they are distinguished as the first clinical-grade human pluripotent stem cell lines created under current Good Manufacturing Practice as described in Cell Stem Cell (2007;1:490-4).
We have filed patent applications on the use of iTR in a wide array of degenerative conditions including cancer. 4. ESI Cell Lines : AgeX has six clinical-grade human embryonic stem cell lines, they are distinguished as the first clinical-grade human pluripotent stem cell lines created under current Good Manufacturing Practice as described in Cell Stem Cell (2007;1:490-4).
With this loss, humans can no longer generate new cells or repair damaged cells scarlessly and in sufficient numbers to maintain health. We discovered that cells begin expressing the gene COX7A1 at the EFT when regeneration is commonly lost. Therefore, the gene may be a key inhibitor of cellular regeneration.
With this loss, humans can no longer generate new cells or repair damaged cells scarlessly and in sufficient numbers to maintain health. We discovered that cells begin expressing the gene COX7A1 at the EFT when regeneration is commonly lost. Therefore, we believe the gene may be a key inhibitor of cellular regeneration.
Our product candidates in the discovery stage include two cell-based therapies derived from telomerase-positive PSCs and two product candidates derived from our proprietary induced tissue regeneration (iTR TM ) technology. We have also sponsored a research program to derive neural stem cells from PSCs to treat degenerative diseases such as Huntington’s Disease.
Our product candidates in the discovery stage include two cell-based therapies derived from telomerase-positive PSCs and two product candidates derived from our proprietary tissue regeneration (iTR TM ) technology. We have also sponsored a research program to derive neural stem cells from PSCs to treat degenerative diseases such as Huntington’s Disease.
ESI License Lineage’s subsidiary ES Cell International Pte (“ESI”) has granted to us non-exclusive rights to certain ESI patents and human pluripotent stem cell lines, or ESI Cell Lines, for use outside of the ESI Exclusive Field of orthopedic, ophthalmic, medical aesthetic, and spinal cord injury uses, and outside certain other fields for which ESI has previously granted licenses.
ESI License Lineage’s subsidiary ES Cell International Pte (ESI) has granted to us non-exclusive rights to certain ESI patents and human pluripotent stem cell lines, or ESI Cell Lines, for use outside of the ESI Exclusive Field of orthopedic, ophthalmic, medical aesthetic, and spinal cord injury uses, and outside certain other fields for which ESI has previously granted licenses.
There is no assurance that the FDA will grant breakthrough therapy, accelerated approval or RMAT status to any of our product candidates. 26 In addition to regulations in the United States, we are subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products.
There is no assurance that the FDA will grant breakthrough therapy, accelerated approval or RMAT status to any of our product candidates. In addition to regulations in the United States, we are subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products.
AGEX-BAT1 Brown Adipose Tissue (“BAT”) Progenitor Cells : The pending patent applications related to BAT progenitor cells, which are owned by AgeX, include U.S. and international patent applications. The applications are directed to the differentiation of pluripotent stem cells (including hES cells) into progenitor cell types capable of making the cellular components of brown fat.
AGEX-BAT1 Brown Adipose Tissue (BAT) Progenitor Cells : The pending patent applications related to BAT progenitor cells, which are owned by AgeX, include U.S. and international patent applications. The applications are directed to the differentiation of pluripotent stem cells (including hES cells) into progenitor cell types capable of making the cellular components of brown fat.
(“Altos”) has reportedly received funding commitments in excess of $3 billion for research and development of products relating to age-reprogramming. The initial technology focus disclosed by Altos may compete with the iTR program within AgeX and its subsidiary Reverse Bio.
(Altos) has reportedly received funding commitments in excess of $3 billion for research and development of products relating to age-reprogramming. The initial technology focus disclosed by Altos may compete with the iTR program within AgeX and its subsidiary Reverse Bio.
The approximate expiration dates of the iTR patents, if issued, will range from 2034 to 2041. 21 Other AGEX Licensed and Sublicensed Patents PureStem ® Progenitor Cells: The patents and pending applications related to our PureStem ® technology include patents and applications in the United States, Canada, Europe and Australia.
The approximate expiration dates of the iTR patents, if issued, will range from 2034 to 2041. Other AGEX Licensed and Sublicensed Patents PureStem ® Progenitor Cells : The patents and pending applications related to our PureStem ® technology include patents and applications in the United States, Canada, Europe and Australia.
Products and Product Candidates Our Therapeutic Product Candidates AGEX-BAT1 - Brown Adipose Tissue (BAT) Progenitors Brown adipose tissue (BAT) is abundant early in life but lost precipitously with age. This tissue is believed to generate heat through expression of a gene called UCP1.
AgeX Products and Product Candidates AgeX Therapeutic Product Candidates AGEX-BAT1 - Brown Adipose Tissue (BAT) Progenitors Brown adipose tissue (BAT) is abundant early in life but lost precipitously with age. This tissue is believed to generate heat through expression of a gene called UCP1 .
There have been and continue to be a number of initiatives at the United States federal and state levels that seek to reduce healthcare costs. In particular, the ACA has had, and is expected to continue to have, a significant impact on the healthcare industry.
There have been and continue to be a number of initiatives at the United States federal and state levels that seek to reduce healthcare costs. 24 In particular, the ACA has had, and is expected to continue to have, a significant impact on the healthcare industry.
The approximate expiration date of the PureStem ® issued patents is 2031 and the approximate date of expiration of the pending patents, if issued, will range from 2029 to 2032. The PureStem ® patent portfolio includes patents and pending applications licensed from Advanced Cell Technology, Inc., which later became Ocata Therapeutics, Inc. (“Ocata”).
The approximate expiration date of the PureStem ® issued patents is 2031 and the approximate date of expiration of the pending patents, if issued, will range from 2029 to 2032. The PureStem ® patent portfolio includes patents and pending applications licensed from Advanced Cell Technology, Inc., which later became Ocata Therapeutics, Inc. (Ocata).
Our therapeutic product candidates in development are likely to face competition from a large number of companies and technological strategies including therapeutics intended to address our lead indications, including: ● Type II diabetes: current standard of care treatments (though not necessarily focused on the root cause of the disease) include dieting and exercise programs to reduce weight, or pharmacological interventions with a wide array of medications, including: Metformin (Glucophage, Glumetza, or others); (DiaBeta, Glynase), glipizide (Glucotrol) and glimepiride (Amaryl); Meglitinides (repaglinide (Prandin) and nateglinide (Starlix)); Thiazolidinediones (rosiglitazone (Avandia) and pioglitazone (Actos)); DPP-4 (sitagliptin (Januvia), saxagliptin (Onglyza) and linagliptin (Tradjenta)); GLP-1 receptor agonists (exenatide (Byetta) and liraglutide (Victoza)); SGLT2 inhibitors (canagliflozin (Invokana) and dapagliflozin (Farxiga)); and insulin therapy (Insulin glulisine (Apidra), Insulin lispro (Humalog), Insulin asgpart (Novolog), Insulin glargine (Lantus), Insulin detemir (Levemir), Insulin isophane (Humulin N, Novolin N)). ● Vascular ischemia, including myocardial ischemia: current standard of care treatments including dieting, lowered intake of cholesterol, daily aspirin as a blood thinner; pharmacological agents including but not limited to nitrates as vasodilators (nitroglycerin sublingual tablet (Nitrostat), nitroglycerin transdermal ointment (Nitro-Bid), and isosorbide mononitrate and dinitrate (Isordil, Isordil Titradose, Dilatrate-SR)); beta blockers (atenolol (Tenormin), metoprolol (Lopressor, Toprol XL), and nadolol (Corgard)); calcium channel blockers (amlodipine (Norvasc), amlodipine and atorvastatin (Caduet), amlodipine and benazepril (Lotrel), diltiazem (Cardizem), felodipine (Cardene, Cardene SR), and verapamil (Calan); cholesterol-lowering medications such as statins atorvastatin (Lipitor), rosuvastatin (Crestor), and simvastatin (Zocor); Angiotensin-converting enzyme (ACE) inhibitors (Ranolazine (Ranexa), benazepril (Lotensin), and lisinopril (Prinivil, Zestril, Qbrelis); and surgical procedures to increase circulation including but not limited to angioplasty and stenting, coronary artery bypass surgery, and enhanced external counterpulsation.
Our therapeutic product candidates in development are likely to face competition from a large number of companies and technological strategies including therapeutics intended to address our lead indications, including: ● Type II diabetes: current standard of care treatments (though not necessarily focused on the root cause of the disease) include dieting and exercise programs to reduce weight, or pharmacological interventions with a wide array of medications, including: Metformin (Glucophage, Glumetza, or others); (DiaBeta, Glynase), glipizide (Glucotrol) and glimepiride (Amaryl); Meglitinides (repaglinide (Prandin) and nateglinide (Starlix)); Thiazolidinediones (rosiglitazone (Avandia) and pioglitazone (Actos)); DPP-4 (sitagliptin (Januvia), saxagliptin (Onglyza) and linagliptin (Tradjenta)); GLP-1 receptor agonists (exenatide (Byetta), liraglutide (Victoza), semaglutide (Ozempic and Rybelsus), dulaglutide (Trulicity), and tirzepatide (Mounjaro); SGLT2 inhibitors (canagliflozin (Invokana) and dapagliflozin (Farxiga)); and insulin therapy (Insulin glulisine (Apidra), Insulin lispro (Humalog), Insulin asgpart (Novolog), Insulin glargine (Lantus), Insulin detemir (Levemir), Insulin isophane (Humulin N, Novolin N)). ● Vascular ischemia, including myocardial ischemia: current standard of care treatments including dieting, lowered intake of cholesterol, daily aspirin as a blood thinner; pharmacological agents including but not limited to nitrates as vasodilators (nitroglycerin sublingual tablet (Nitrostat), nitroglycerin transdermal ointment (Nitro-Bid), and isosorbide mononitrate and dinitrate (Isordil, Isordil Titradose, Dilatrate-SR)); beta blockers (atenolol (Tenormin), metoprolol (Lopressor, Toprol XL), and nadolol (Corgard)); calcium channel blockers (amlodipine (Norvasc), amlodipine and atorvastatin (Caduet), amlodipine and benazepril (Lotrel), diltiazem (Cardizem), felodipine (Cardene, Cardene SR), and verapamil (Calan); cholesterol-lowering medications such as statins atorvastatin (Lipitor), rosuvastatin (Crestor), and simvastatin (Zocor); Angiotensin-converting enzyme (ACE) inhibitors (Ranolazine (Ranexa), benazepril (Lotensin), and lisinopril (Prinivil, Zestril, Qbrelis); and surgical procedures to increase circulation including but not limited to angioplasty and stenting, coronary artery bypass surgery, and enhanced external counterpulsation.
Our core technology platforms provide us with a strong foundation for successfully addressing many of the diseases of ageing by focusing on broad therapeutic applicability and commercially scalable technologies: 1. PureStem ® : AgeX’s allogeneic cell derivation and manufacturing platform, based on human embryonic progenitors, which are cells in state of development between embryonic stem cells and adult cells.
We believe our core technology platforms provide us with a strong foundation for successfully addressing many of the diseases of ageing by focusing on broad therapeutic applicability and commercially scalable technologies: 1. PureStem® : AgeX’s allogeneic cell derivation and manufacturing platform, based on human embryonic progenitors, which are cells in state of development between embryonic stem cells and adult cells.
We make available, free of charge through our website, our most recent annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after the reports are electronically filed with or furnished to the SEC. iTR TM , UniverCyte TM , Renelon™, and EPRO™ are trademarks of AgeX Therapeutics, Inc.
We make available, free of charge through our website, our most recent annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after the reports are electronically filed with or furnished to the SEC. iTR TM , UniverCyte TM , Renelon™, and EPRO™ are trademarks of AgeX.
The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act, collectively the Affordable Care Act (“ACA”), among other things, amended the intent requirement of the federal Anti-Kickback Statute such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate, in order to commit a violation.
The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act, collectively the Affordable Care Act (ACA), among other things, amended the intent requirement of the federal Anti-Kickback Statute such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate, in order to commit a violation.
Our lead small molecule drug-based therapeutic candidate for iTR TM in discovery is AGEX-iTR1547 and our lead biologic candidate for iTR is AGEX-iTR1550 : ● AGEX-iTR1547 is a drug-based formulation and AGEX-iTR1550 (also known as Renelon™) is a gene delivery technology, both of which are in the discovery stage of development. Initial indications for use may include scarless wound repair.
Our lead small molecule drug-based therapeutic candidate for iTRTM in discovery is AGEX-iTR1547 and our lead biologic candidate for iTR is AGEX-iTR1550: ● AGEX-iTR1547 is a drug-based formulation and AGEX-iTR1550 (also known as Renelon™) is a gene delivery technology, both of which are in the discovery stage of development. Initial indications for use may include scarless wound repair.
Extensive clinical testing, which is generally done in three phases, must then be undertaken at a hospital or medical center to demonstrate optimal use, safety, and efficacy of each product in humans. Each clinical study is conducted under the auspices of an independent Institutional Review Board (“IRB”).
Extensive clinical testing, which is generally done in three phases, must then be undertaken at a hospital or medical center to demonstrate optimal use, safety, and efficacy of each product in humans. Each clinical study is conducted under the auspices of an independent institutional review board (IRB).
See “Risk Factors” elsewhere in this Report for information about certain risks associated with reliance on arrangements with third parties for research, product development, clinical trials, manufacturing, and commercializing product candidates. We plan to finance our iTR TM and AGEX-BAT1 research and development through Reverse Bio.
See elsewhere in this Report for information about certain risks associated with reliance on arrangements with third parties for research, product development, clinical trials, manufacturing, and commercializing product candidates. We plan to finance our iTR TM and AGEX-BAT1 research and development through Reverse Bio.
There are numerous biotechnology companies developing therapeutics for human aging, with each company often focusing on a specific molecular pathway within cells. For example, ResTORbio, Inc. is developing modulators of the mechanistic target of rapamycin (“mTOR”) pathway to treat immunological and cardiovascular disorders.
There are numerous biotechnology companies developing therapeutics for human aging, with each company often focusing on a specific molecular pathway within cells. For example, ResTORbio, Inc. is developing modulators of the mechanistic target of rapamycin (mTOR) pathway to treat immunological and cardiovascular disorders.
This technology is sometimes referred to as “partial reprogramming” or “epigenetic reprogramming of aging.” This novel approach may trigger complete regeneration of cells, and potentially even complex tissues, damaged as a result of age-related degenerative processes or trauma.
This technology is sometimes referred to as “partial reprogramming” or “epigenetic reprogramming of aging.” We believe this novel approach may trigger complete regeneration of cells, and potentially even complex tissues, damaged as a result of age-related degenerative processes or trauma.
When implemented in vivo , this partial reprogramming, or iTR, would be expected to induce tissue regeneration, and when combined with telomerase, could modulate both cellular immortality and regenerative biology for therapeutic effect. In addition to the small molecule product candidate designated iTR1547, we have invented biological interventions based, for example, on gene therapy.
When implemented in vivo , this partial reprogramming, or iTR, would be expected to induce tissue regeneration, and when combined with telomerase, may be able to modulate both cellular immortality and regenerative biology for therapeutic effect. In addition to the small molecule product candidate designated iTR1547, we have invented biological interventions based, for example, on gene therapy.
To the extent AgeX develops cellular and tissue-based products or therapies, its products will be subject to review by the FDA staff in its Center for Biologics Evaluation and Research (“CBER”) Office of Cellular, Tissue, and Gene Therapies.
To the extent AgeX develops cellular and tissue-based products or therapies, its products will be subject to review by the FDA staff in its Center for Biologics Evaluation and Research (CBER) Office of Cellular, Tissue, and Gene Therapies.
Prior to filing an Investigational New Drug (IND) application for the initiation of clinical trials of our initial product candidates, AGEX-BAT1, AGEX-VASC1, and AGEX-ITR1547/AGEX-iTR1550 a number of important research and development goals will need to be achieved, including discovery-level research for the qualification of reagents used in the manufacture of the product, completion of the standard operating procedures to be used (SOPs), complete the methods and documentation for characterization of the product; and producing and testing the genetic modifications in the master cell banks of the pluripotent stem cells under current Good Manufacturing Practices (cGMP) in order to produce product that will not illicit immune rejection following transplantation.
Prior to filing an investigational new drug application (IND) for the initiation of clinical trials of our initial product candidates, AGEX-BAT1, AGEX-VASC1, and AGEX-ITR1547/AGEX-iTR1550, a number of important research and development goals will need to be achieved, including discovery-level research for the qualification of reagents used in the manufacture of the product, completion of the standard operating procedures (SOPs) to be used, completion of the methods and documentation for characterization of the product; and producing and testing the genetic modifications in the master cell banks of the pluripotent stem cells under cGMP in order to produce product that will not illicit immune rejection following transplantation.
We believe PureStem has the potential to solve several major challenges faced by the cell therapy industry by generating cellular therapeutics which would: ● be commercialized as “off-the-shelf” products ● be pure and industrially scalable ● have lower cost of goods per unit ● be amenable to traditional pharma supply chain logistics ● have the potential for acceptable reimbursement prices, unlike the very expensive autologous products, and ● have higher clinical adoption from expected cost savings and more simplified processes. 9 In addition, we believe PureStem cells may have advantages over mesenchymal stem cells (MSCs), which may only survive transiently in the body and exert any short-term benefit by releasing paracrine factors, which may limit their potential of MSCx.
We believe PureStem has the potential to solve several major challenges faced by the cell therapy industry by generating cellular therapeutics which would: ● be commercialized as “off-the-shelf” products; ● be pure and industrially scalable; ● have lower cost of goods per unit; ● be amenable to traditional pharmaceutical supply chain logistics; ● have the potential for acceptable reimbursement prices, unlike the relatively expensive autologous products; and ● have higher clinical adoption from expected cost savings and more simplified processes. 10 In addition, we believe PureStem cells may have advantages over mesenchymal stem cells (MSCs), which may only survive transiently in the body and exert any short-term benefit by releasing paracrine factors, which may limit their potential of MSCx.
UniverCyte could potentially avoid immune rejection of transplanted cells, solving a major challenge facing the allogeneic cell therapy industry. In addition to utilizing UniverCyte™ for its own future cell therapy products, AgeX may make UniverCyte™ available to other cell therapy companies through licensing arrangements. 3.
We believe that UniverCyte could potentially avoid immune rejection of transplanted cells, solving a major challenge facing the allogeneic cell therapy industry. In addition to utilizing UniverCyte™ for its own future cell therapy products, AgeX may make UniverCyte™ available to other cell therapy companies through licensing arrangements. 3.
We plan to contract with third parties where the third parties to allow them to utilize cGMP PSC lines in defined fields of application in exchange for certain compensation including the payment of royalties to us if they are successful in developing and commercializing a product. Subsidiaries AgeX has three subsidiaries, Reverse Bio, ReCyte Therapeutics, Inc. (“ReCyte”) and NeuroAirmid.
We plan to contract with third parties where the third parties to allow them to utilize cGMP PSC lines in defined fields of application in exchange for certain compensation including the payment of royalties to us if they are successful in developing and commercializing a product. Subsidiaries AgeX has five subsidiaries, Reverse Bio, ReCyte Therapeutics, Inc.
ESI Human Embryonic Stem Cell (“ hES” ) Cell Lines: AgeX licenses rights to the ES Cell International Pte. Ltd. patent portfolio with patents issued in the United States, Australia, Israel, UK, Singapore, Japan, and applications pending in the US and Europe.
ESI Human Embryonic Stem Cell (hES) Cell Lines : AgeX licenses rights to the ES Cell International Pte. Ltd. patent portfolio with patents issued in the United States, Australia, Israel, UK, Singapore, Japan, and applications pending in the US and Europe.
Liability under the false claims laws may also arise when a violation of certain laws or regulations related to the underlying products (e.g., violations regarding improper promotional activity or unlawful payments) contributes to the submission of a false claim. Additionally, the U.S.
Liability under the false claims laws may also arise when a violation of certain laws or regulations related to the underlying products (e.g., violations regarding improper promotional activity or unlawful payments) contributes to the submission of a false claim.
In the United States, the FDA regulates drugs and biologicals under the Federal Food, Drug and Cosmetic Act (“FDCA”), the Public Health Service Act (“PHSA”), and implementing regulations. In addition, establishments that manufacture human cells, tissues, and cellular and tissue-based products are subject to additional registration and listing requirements, including current good tissue practice regulations.
In the United States, the FDA regulates drugs and biologicals under the Federal Food, Drug and Cosmetic Act (FDCA), the Public Health Service Act (PHSA), and implementing regulations. In addition, establishments that manufacture human cells, tissues, and cellular and tissue-based products are subject to additional registration and listing requirements, including current good tissue practice regulations.
In 2017, FDA established a new regenerative medicine advanced therapy (“RMAT”) designation as part of its implementation of the 21st Century Cures Act.
In 2017, FDA established a new regenerative medicine advanced therapy (RMAT) designation as part of its implementation of the 21st Century Cures Act.
They are listed on the National Institutes of Health (NIH) Stem Cell Registry in the USA and are among the best characterized and documented stem cell lines in the world. ESI-053 is among only a few pluripotent stem cell lines from which a derived cell therapy product candidate has been granted FDA IND clearance for human studies.
They are listed on the NIH Stem Cell Registry in the USA and are among the best characterized and documented stem cell lines in the world. ESI-053 is among only a few pluripotent stem cell lines from which a derived cell therapy product candidate has been granted FDA IND clearance for human studies.
We do not have our own research laboratory facilities. Commercialization Plan With the exception of our research product sales which generate a trivial amount of revenues, we currently have no commercialized or marketed products such as FDA-approved drugs in our portfolio. As a result, we have not yet assembled an infrastructure for sales and marketing.
Commercialization Plan With the exception of our research product sales which generate a trivial amount of revenues, we currently have no commercialized or marketed products such as FDA-approved drugs in our portfolio. As a result, we have not yet assembled an infrastructure for sales and marketing.
PSCs such as ES Cells and PureStem EP Cells display a regenerative capacity like cells that have not cross the Weismann Barrier.
PSCs such as ES Cells and PureStem EP Cells display a regenerative capacity like cells that have not crossed the Weismann Barrier.
Our proprietary technology, based on telomerase-mediated cellular immortality and regenerative biology, allows us to utilize telomerase-expressing regenerative pluripotent stem cell (“PSCs”) for the manufacture of cell-based therapies to regenerate tissues afflicted with age-related chronic degenerative disease.
Our proprietary technology, based on telomerase-mediated cellular immortality and regenerative biology, allows us to utilize telomerase-expressing regenerative pluripotent stem cells (“hES cells” or “PSCs”) for the manufacture of cell-based therapies to regenerate tissues afflicted with age-related chronic degenerative disease.
Foreign Corrupt Practices Act (“FCPA”) prohibits U.S. corporations and their representatives from offering, promising, authorizing or making payments to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business abroad. The scope of the FCPA includes interactions with certain healthcare professionals in many countries.
Additionally, the FCPA prohibits U.S. corporations and their representatives from offering, promising, authorizing or making payments to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business abroad. The scope of the FCPA includes interactions with certain healthcare professionals in many countries.
UniverCyte TM (“HLA-G”) Technology: In August 2018, we acquired from Escape Therapeutics patents and patent applications related to HLA-G-modified cells and methods of generating allogeneic cells with reduced risk of being rejected by patients regardless of the HLA class I haplotype.
UniverCyte TM Human Leukocyte Antigen-G (HLA-G) Technology : In August 2018, we acquired from Escape Therapeutics patents and patent applications related to HLA-G-modified cells and methods of generating allogeneic cells with reduced risk of being rejected by patients regardless of the HLA class I haplotype.
The new subsidiary is still in the organizational stage and commencement of clinical study work will depend on its ability to obtain financing through grants or third-party investment.
The new subsidiary is still in the organizational stage and commencement of clinical study work will depend on its ability to obtain financing through grants or third-party investment. 11 ● Reverse Bioengineering, Inc.
Additional License and Sublicense Agreements Lineage and certain Lineage subsidiaries also entered into agreements pursuant to which they have licensed or sublicense to us, on a non-exclusive, world-wide, royalty bearing basis, certain additional patents and patent rights and know-how relating to Lineage HyStem ® hydrogel technology, human embryonic progenitor cell technology, and human pluripotent stem cell lines and technology for use outside the Lineage Exclusive Fields, or in the case of certain sublicense rights, fields previously licensed to third parties.
Additional License and Sublicense Agreements Lineage and certain Lineage subsidiaries also entered into agreements pursuant to which they have licensed or sublicense to us, on a non-exclusive, world-wide, royalty bearing basis, certain additional patents and patent rights and know-how relating to human embryonic progenitor cell technology and human pluripotent stem cell lines and technology for use outside the Lineage Exclusive Fields, or in the case of certain sublicense rights, fields previously licensed to third parties. 19 Sublicense of Certain Progenitor Patents Lineage has granted to us a sublicense of certain patents licensed to Lineage that pertain to the derivation of human embryonic progenitor cell lines.
We have licensed from our former parent company Lineage Cell Therapeutics, Inc. (“Lineage”) PureStem applications outside of orthopedics, medical aesthetics, and certain ophthalmological applications. We have chosen two PureStem applications for our initial product development based on unmet medical need along with other factors.
We have licensed from our former parent company Lineage PureStem applications outside of orthopedics, medical aesthetics, and certain ophthalmological applications. 12 We have chosen two PureStem applications for our initial product development based on unmet medical need along with other factors.
No action can be taken to market any therapeutic product in the U.S. until an appropriate New Drug Application (“NDA”) or Biologics License Application (“BLA”) has been approved by the FDA. Submission of the application is no guarantee that the FDA will find it complete and accept it for filing.
No action can be taken to market any therapeutic product in the U.S. until an appropriate New Drug Application (NDA) or BLA has been approved by the FDA. Submission of the application is no guarantee that the FDA will find it complete and accept it for filing.
Lastly, we will need to define the clinical trial and regulatory strategy and hold various meetings with the Food and Drug Administration (FDA), as well as successfully submit an investigational new drug application or IND to the FDA and receive clearance to begin trials.
Lastly, we will need to define the clinical trial and regulatory strategy and hold various meetings with the U.S. Food and Drug Administration (FDA), as well as successfully submit an IND to the FDA and receive clearance to begin trials.
After testing in animals to evaluate the potential efficacy and safety of the product candidate, an investigational new drug (“IND”) submission must be made to the FDA to obtain authorization for human testing.
After testing in animals to evaluate the potential efficacy and safety of the product candidate, an IND submission must be made to the FDA to obtain authorization for human testing.
HyStem ® and PureStem ® are registered trademarks of Lineage Cell Therapeutics, Inc. POZ™ is a trademark of Serina Therapeutics Inc. 7 Emerging Growth Company We are an “emerging growth company” under the Jumpstart our Business Startups Act of 2012 or the JOBS Act.
PureStem ® is a registered trademark of Lineage Cell Therapeutics, Inc. Emerging Growth Company We are an “emerging growth company” under the Jumpstart our Business Startups Act of 2012 or the JOBS Act.
Our choice and prioritization of product candidates for development will be influenced by a variety of factors, including but not limited to: ● Results of our laboratory research and any animal and clinical trials that we or any licensees or collaborators may conduct; ● Our ability to enter into licensing or collaborative arrangements with other biotechnology or biopharma companies or universities with their own laboratory facilities and research staffs to conduct research and development of one or more product candidates; ● Our analysis of third-party competitive and alternative technology that may lead us to conclude that our product candidates or technologies may be non-competitive or obsolete; ● Our analysis of market demand and market prices for the products we plan to develop could lead us to conclude that market conditions are not favorable for receiving an adequate return on our investment in product development and commercialization; ● The amount of capital that we will have for our development programs and our projected costs for those programs; ● The issuance of patents to third parties that might block our use of the same or similar technology to develop a product candidate; and ● The views of the FDA and comparable foreign regulatory agencies on the pre-clinical product characterization studies required to file an IND in order to initiate human clinical testing of a therapeutic product candidate or to attain marketing approval for that product candidate, or to obtain an investigational device exemption for clinical trials, or clearance for a 510(k) application to market a medical device. 19 Other Products and Product Candidates Neural Stem Cells During January 2020, we began a research collaboration under a Sponsored Research Agreement with the University of California at Irvine (“UCI”) using our PureStem ® technology to derive neural stem cells, with the goal of developing cellular therapies to treat neurological disorders and diseases.
Our choice and prioritization of product candidates for development will be influenced by a variety of factors, including but not limited to: ● Results of our laboratory research and any animal and clinical trials that we or any licensees or collaborators may conduct; ● Our ability to enter into licensing or collaborative arrangements with other biotechnology or biopharma companies or universities with their own laboratory facilities and research staffs to conduct research and development of one or more product candidates; ● Our analysis of third-party competitive and alternative technology that may lead us to conclude that our product candidates or technologies may be non-competitive or obsolete; ● Our analysis of market demand and market prices for the products we plan to develop could lead us to conclude that market conditions are not favorable for receiving an adequate return on our investment in product development and commercialization; ● The amount of capital that we will have for our development programs and our projected costs for those programs; ● The issuance of patents to third parties that might block our use of the same or similar technology to develop a product candidate; and ● The views of the FDA and comparable foreign regulatory agencies on the pre-clinical product characterization studies required to file an IND in order to initiate human clinical testing of a therapeutic product candidate or to attain marketing approval for that product candidate, or to obtain an investigational device exemption for clinical trials, or clearance for a 510(k) application to market a medical device.
Combination Products If we develop any products that are used with medical devices, they may be considered combination products, which are defined by the FDA to include products comprised of two or more regulated components or parts such as a biologic and a device.
Combination Products If we develop any products that are used with medical devices, they may be considered combination products, which are defined by the FDA to include products comprised of two or more regulated components or parts such as a biologic and a device. When regulated independently, biologics and devices each have their own regulatory requirements.
The approximate expiration date of the UniverCyte™ (“HLA-G”) issued patents is 2033 and the approximate date of expiration of the pending patents, if issued, will also be 2033.
The approximate expiration date of the UniverCyte™ HLA-G issued patents is 2033 and the approximate date of expiration of the pending patents, if issued, will also be 2033.
Once approved, when appropriate, the FDA can permit fulfillment of post-approval requirements under accelerated approval through the submission of clinical evidence, clinical studies, patient registries, or other sources of real world evidence such as electronic health records; through the collection of larger confirmatory datasets; or through post-approval monitoring of all patients treated with the therapy prior to approval.
Once approved, when appropriate, the FDA can permit fulfillment of post-approval requirements under accelerated approval through the submission of clinical evidence, clinical studies, patient registries, or other sources of real world evidence such as electronic health records; through the collection of larger confirmatory datasets; or through post-approval monitoring of all patients treated with the therapy prior to approval. 22 Some of our future products may be eligible for RMAT designation.
We intend to use the UniverCyte™ technology in the development of our two lead product candidates, AGEX-BAT1 and AGEX-VASC1 for the treatment of Type II diabetes and peripheral vascular disease and ischemic heart disease, respectively. In addition, we may seek to license out or form collaborations for the use of our UniverCyte™ technology.
We intend to use the UniverCyte™ technology in the development of our two lead product candidates, AGEX-BAT1 and AGEX-VASC1 for the treatment of Type II diabetes and peripheral vascular disease and ischemic heart disease, respectively.
The patents are directed to cells which are genetically modified to express a Human Leukocyte Antigen-G (“HLA-G”) and have reduced immunogenicity, and nucleic acid compositions useful for generating the genetically modified cells.
The patents are directed to cells which are genetically modified to express a HLA-G and have reduced immunogenicity, and nucleic acid compositions useful for generating the genetically modified cells.
In connection with our sponsored Huntington’s Disease research program at the University of California at Irvine (“UCI”), we and certain researchers who contributed to the Huntington’s Disease research work formed a new subsidiary, of which we are presently the majority shareholder, to pursue clinical studies of the use of derived neural stem cell to treat that disease.
(“NeuroAirmid”). In connection with our sponsored Huntington’s Disease research program at the University of California at Irvine (“UCI”), we and certain researchers who contributed to the Huntington’s Disease research work formed NeuroAirmid to pursue clinical studies of the use of derived neural stem cell to treat that disease.
We face similar issues outside of the United States. In some non-U.S. jurisdictions, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country to country.
In some non-U.S. jurisdictions, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country to country.
See “Risk Factors — Risks Related to Our Business Operations” for discussion of risks relating to product development and clinical trials.
See “ Risk Factors—Risks Related to Our Business Operations ” for discussion of risks relating to product development and clinical trials.
AgeX also will pay ESI 5% of any fees that AgeX may receive for providing third parties with a “drug master file” for submission to the FDA or similar regulatory agencies in other jurisdictions that may be used to provide confidential detailed information about facilities, processes or articles used in the manufacturing, processing, packaging and storing of one or more human drugs, including but not limited to biologics, cell lines and cell products.
AgeX also will pay ESI 5% of any fees that AgeX may receive for providing third parties with a “drug master file” for submission to the FDA or similar regulatory agencies in other jurisdictions that may be used to provide confidential detailed information about facilities, processes or articles used in the manufacturing, processing, packaging and storing of one or more human drugs, including but not limited to biologics, cell lines and cell products. 20 Competition The biotechnology industry is highly competitive and characterized by rapid change (even disruptive advances) that challenge the ability of any one company to maintain leadership.
We will need to conduct or sponsor research and development work, or license our technology to other biotechnology or pharma companies interested in furthering research and development, as part of our plan to develop these cell- and drug-based therapies, each targeting large unmet needs in age-related medicine.
We will need to conduct or sponsor research and development work, or license our technology to other biotechnology or pharma companies interested in furthering research and development in order to develop these cell- and drug-based therapies, each targeting large unmet needs in age-related medicine. 9 Overview of Our Product Candidates Our product pipeline includes two cell-based and two iTR-based product candidates in development.
We will remain an “emerging growth company” until the earliest of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”); (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt securities during the previous three years; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
We will remain an “emerging growth company” until the earliest of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt securities during the previous three years; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended (the Exchange Act). 26 The JOBS Act permits an emerging growth company to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies.
Business Strategy Each of our four proprietary platform technologies, PureStem ® for cell derivation and manufacturing, UniverCyte™ for generation of hypoimmunogenic cells, iTR TM for reversing the age of cells already in the body and HyStem ® for cell or small molecule-based iTR TM delivery, presents AgeX with a multiplicity of attractive opportunities which we may pursue.
Pre-Merger Business Strategy We believe our four proprietary platform technologies, PureStem ® for cell derivation and manufacturing, UniverCyte™ for generation of hypoimmunogenic cells and iTR TM for reversing the age of cells already in the body present AgeX with a multiplicity of attractive opportunities which we may pursue.
As shown in Figure 6, the AGEX-BAT1 progenitors strongly express the BAT marker UCP1 when induced to differentiate and show a relatively high degree of purity compared to human tissue-derived BAT.
There currently is no FDA-approved matrix for cell transplantation. As shown in Figure 6, the AGEX-BAT1 progenitors strongly express the BAT marker UCP1 when induced to differentiate and show a relatively high degree of purity compared to human tissue-derived BAT.
As shown in Figure 8, our proprietary formulation AGEX-iTR1547 has demonstrated initial capability of reducing the expression of the marker gene COX7A1 back to before the Weismann Barrier without reverting the cells to pluripotency.
We have utilized for example the gene COX7A1 as a marker of cells that have lost regenerative potential (crossed the Weismann Barrier). As shown in Figure 8, our proprietary formulation AGEX-iTR1547 has demonstrated initial capability of reducing the expression of the marker gene COX7A1 back to before the Weismann Barrier without reverting the cells to pluripotency.
These subsidiaries are early stage pre-clinical research and development companies. AgeX will develop its revolutionary iTR TM platform and AGEX-BAT1 through Reverse Bio. Reverse Bio will allow for a dedicated focus on iTR TM in terms of equity financing and advancing the iTR TM technology to proof-of-concept in an animal model.
AgeX intends to develop its iTR TM platform and AGEX-BAT1 through Reverse Bio. Reverse Bio will allow for a dedicated focus on iTR TM in terms of equity financing and advancing the iTR TM technology to proof-of-concept in an animal model.
Authorities also heavily regulate many of these activities for human cells, tissues, and cellular and tissue-based products (“HCT/Ps”). 25 FDA and Foreign Regulation of Therapeutic Products The FDA and foreign regulatory authorities will regulate our proposed products as drugs, biologicals, or medical devices, depending upon such factors as: the use to which the product will be put, the chemical composition of the product, and the interaction of the product with the human body.
FDA and Foreign Regulation of Therapeutic Products The FDA and foreign regulatory authorities will regulate our proposed products as drugs, biologicals, or medical devices, depending upon such factors as: the use to which the product will be put, the chemical composition of the product, and the interaction of the product with the human body.
Adoption of price controls and other cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures reforms may prevent or limit our ability to generate revenue, attain profitability or commercialize our product candidates.
Adoption of price controls and other cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures reforms may prevent or limit our ability to generate revenue, attain profitability or commercialize our product candidates. Moreover, the DSCSA imposes obligations on manufacturers of pharmaceutical products, among others, related to product tracking and tracing.
General Risks Related to Obtaining and Enforcing Patent Protection There is a risk that any patent applications that we file and any patents that we hold or later obtain could be challenged by third parties and be declared invalid or infringing on third-party claims.
In addition, we may seek to license out or form collaborations for the use of our UniverCyte™ technology. 18 General Risks Related to Obtaining and Enforcing Patent Protection There is a risk that any patent applications that we file and any patents that we hold or later obtain could be challenged by third parties and be declared invalid or infringing on third-party claims.
Our sponsored Huntington’s Disease research program at UCI has led to the organization of a new AgeX subsidiary, of which we are presently the majority shareholder, to pursue clinical studies of the use of derived neural stem cell to treat that disease.
Our sponsored Huntington’s Disease research program at UCI has led to the organization of an AgeX subsidiary, NeuroAirmid, of which we equally owned with certain UCI researchers, to pursue clinical studies of the use of derived neural stem cell to treat that disease.
Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and there may be additional challenges and amendments to the ACA in the future, including efforts to implement changes to the law that may impact reimbursement for drugs and biologics. 28 Further, there has been heightened government scrutiny over the manner in which manufacturers set prices for their marketed pharmaceutical products.
Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and there may be additional challenges and amendments to the ACA in the future, including efforts to implement changes to the law that may impact reimbursement for drugs and biologics.
The AGEX-VASC1 product may also rely on the HyStem patents, which are described in detail below, under the heading “ HyStem ® Technology. ” AGEX-iTR1547 and AGEX-iTR1550 Induced Tissue Regeneration (“iTR TM” ) : The pending patent applications related to the iTR programs, which are owned by AgeX, include applications pending, for example, in the United States, Australia, Canada, China, Europe, Japan and a pending international patent application.
AGEX-iTR1547 and AGEX-iTR1550 Induced Tissue Regeneration (iTR TM ) : The pending patent applications related to the iTR programs, which are owned by AgeX, include applications pending, for example, in the United States, Australia, Canada, China, Europe, Japan and a pending international patent application.
Government Regulation and Product Approval Government authorities at the federal, state, and local level, and in other countries, extensively regulate among other things, the development, testing, manufacture, quality, approval, safety, efficacy, distribution, labeling, packaging, storage, record keeping, marketing, import/export, and promotion of drugs, biologics, and medical devices.
In addition, our future business could be limited should our competitors commercialize products demonstrated to be more effective, safer, or less expensive than our comparable products. 21 Government Regulation and Product Approval Government authorities at the federal, state, and local level, and in other countries, extensively regulate among other things, the development, testing, manufacture, quality, approval, safety, efficacy, distribution, labeling, packaging, storage, record keeping, marketing, import/export, and promotion of drugs, biologics, and medical devices.
To the extent we license development of one or more product candidates to third parties or enter into collaboration arrangements for product development, our licensees or collaborators would need to undertake and achieve the foregoing goals.
To the extent we license development of one or more product candidates to third parties or enter into collaboration arrangements for product development, our licensees or collaborators would need to undertake and achieve the foregoing goals. 15 Because our product candidates are still in the discovery stage, our choice of product candidates and development plans are subject to change based on a variety of factors.
In addition to government regulation, managed care organizations in the United States, which include medical insurance companies, medical plan administrators, health-maintenance organizations, hospital and physician alliances and pharmacy benefit managers, continue to put pressure on the price and usage of healthcare products.
If a drug product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease. 25 In addition to government regulation, managed care organizations in the United States, which include medical insurance companies, medical plan administrators, health-maintenance organizations, hospital and physician alliances and pharmacy benefit managers, continue to put pressure on the price and usage of healthcare products.
Our competitors, may have greater success in attracting qualified personnel, recruiting clinical trial sites, or in establishing strategic partnerships with larger pharmaceutical companies to fund large late-stage clinical trials or product marketing. In addition, our future business could be limited should our competitors commercialize products demonstrated to be more effective, safer, or less expensive than our comparable products.
Our competitors, may have greater success in attracting qualified personnel, recruiting clinical trial sites, or in establishing strategic partnerships with larger pharmaceutical companies to fund large late-stage clinical trials or product marketing.
We believe that demand for therapeutics addressing such conditions is on the rise, commensurate with the demographic shift of aging in the United States and many other industrialized countries.
Our mission is to apply our comprehensive experience in fundamental biological processes of human aging to a broad range of age-associated medical conditions. We believe that demand for therapeutics addressing such conditions is on the rise, commensurate with the demographic shift of aging in the United States and many other industrialized countries.
Overview of Our Technology Platforms The technology underlying our product development programs is based on telomerase-mediated cellular immortality and regenerative biology. By “telomerase-mediated cellular immortality” we refer to the fact that cells that express sufficient levels of a protein called telomerase are capable of replicating without limit.
By “telomerase-mediated cellular immortality” we refer to the fact that cells that express sufficient levels of a protein called telomerase are capable of replicating without limit.
We incorporated Reverse Bioengineering, Inc. (“Reverse Bio”) as an AgeX subsidiary to develop our revolutionary iTR TM platform. Reverse Bio will allow for a dedicated focus on iTR TM in terms of equity financing and advancing our iTR TM technology to proof-of-concept in an animal model.
Reverse Bio is intended to allow for a dedicated focus on iTR TM in terms of equity financing and advancing our iTR TM technology to proof-of-concept in an animal model.
Moreover, the Drug Supply Chain Security Act (the “DSCSA”) imposes obligations on manufacturers of pharmaceutical products, among others, related to product tracking and tracing. While some requirements of the DSCSA began in November 2014, many key requirements, development of standards, and the system for product tracing will continue to be phased in until 2023.
While some requirements of the DSCSA began in November 2014, many key requirements, development of standards, and the system for product tracing will continue to be phased in until 2023.
Federal Funding of Research The National Institutes of Health (“NIH”) has adopted guidelines on the use of hES cells in federally funded research, consistent with President Obama’s Executive Order which rescinded President Bush’s Executive Orders that permitted federal funding of research on hES cells using only the limited number of hES cell lines.
Issues pertaining to manufacturing equipment, facilities or processes may also delay the approval of new products undergoing FDA review. 23 Federal Funding of Research The NIH has adopted guidelines on the use of hES cells in federally funded research, consistent with President Obama’s Executive Order which rescinded President Bush’s Executive Orders that permitted federal funding of research on hES cells using only the limited number of hES cell lines.
As shown below, select clonal lines express markers such as VE-Cadherin (CDH5) and PECAM1, as well as VWF and other markers of venous, arterial, and lymphatic endothelium. Flow cytometry shows purity indistinguishable from 100%. In addition to vascular endothelial cells, we have characterized vascular smooth muscle cell progenitors.
AGEX-VASC1 - Vascular Progenitors PureStem ® technology can also yield highly purified embryonic vascular components. As shown below, select clonal lines express markers such as VE-Cadherin (CDH5) and PECAM1, as well as VWF and other markers of venous, arterial, and lymphatic endothelium. Flow cytometry shows purity indistinguishable from 100%.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur choice of product candidates and our development plans for our product candidates are subject to change based on a variety of factors, and if we abandon development of a product candidate we may not be able to develop or acquire a replacement product candidate.
Biggest changeFurther, it is likely that the administration of a AGEX-BAT1 cell therapy product would entail a surgical implant procedure which would be expensive and would pose risks to the patient related to the surgical procedure that are not faced by users of the injectable or pill GLP-1 receptor agonist drugs currently on the market. 37 Our choice of product candidates and our development plans for our product candidates are subject to change based on a variety of factors, and if we abandon development of a product candidate we may not be able to develop or acquire a replacement product candidate.
Our choice and prioritization of product candidates for development will be influenced by a variety of factors, including but not limited to: ● the amount of capital that we will have for our development programs and our projected costs for those programs; ● our ability to enter into licensing or collaborative arrangements with other biotechnology or biopharma companies or universities with their own laboratory facilities and research staffs to conduct research and development of one or more product candidates; ● competitors may develop alternatives that render our potential product candidates obsolete or less attractive; ● potential product candidates we develop may nevertheless be covered by third parties’ patents or other exclusive rights; ● potential product candidates may not be effective in treating their targeted diseases; ● potential product candidates may, on further study, be shown to have harmful side effects, toxicities or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance; ● our analysis of market demand and market prices for the products we plan to develop could lead us to conclude that market conditions are not favorable for receiving an adequate return on our investment in product development and commercialization; ● a potential product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; or ● the regulatory pathway for a potential product candidate is too complex and difficult to navigate successfully or economically.
Our choice and prioritization of product candidates for development will be influenced by a variety of factors, including but not limited to: ● the amount of capital that we will have for our development programs and our projected costs for those programs; ● ability to enter into licensing or collaborative arrangements with other biotechnology or biopharma companies or universities with their own laboratory facilities and research staffs to conduct research and development of one or more product candidates; ● competitors may develop alternatives that render our potential product candidates obsolete or less attractive; ● potential product candidates we develop may nevertheless be covered by third parties’ patents or other exclusive rights; ● potential product candidates may not be effective in treating their targeted diseases; ● potential product candidates may, on further study, be shown to have harmful side effects, toxicities or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance; ● our analysis of market demand and market prices for the products we plan to develop could lead us to conclude that market conditions are not favorable for receiving an adequate return on our investment in product development and commercialization; ● a potential product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; or ● the regulatory pathway for a potential product candidate is too complex and difficult to navigate successfully or economically.
We cannot assure you that any stability or other issues relating to the manufacture of any of our product candidates or products will not occur in the future.
We cannot assure you that any stability or other issues relating to the manufacture of any of our product candidates or products will not occur in the future.
Any product candidate for that receives marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, packaging, distribution, adverse event reporting, storage, recordkeeping, export, import, advertising and promotional activities for such product, among other things, will be subject to extensive and ongoing requirements of and review by the FDA and other regulatory authorities.
Any product candidate that receives marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, packaging, distribution, adverse event reporting, storage, recordkeeping, export, import, advertising and promotional activities for such product, among other things, will be subject to extensive and ongoing requirements of and review by the FDA and other regulatory authorities.
Events that may prevent successful or timely completion of clinical development include but are not limited to: ● inability to generate satisfactory preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical studies necessary for product approval; ● delays in reaching agreement on acceptable terms with clinical research organizations or CROs and clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical study sites; 45 ● delays in obtaining required Institutional Review Board, or IRB, approval at each clinical study site; ● failure to permit the conduct of a study by regulatory authorities, after review of an investigational new drug, or IND, or equivalent foreign application or amendment; ● delays in recruiting qualified patients in our clinical studies; ● failure by clinical sites or our CROs or other third parties to adhere to clinical study requirements or report complete findings; ● failure to perform the clinical studies in accordance with the FDA’s good clinical practices requirements, or applicable foreign regulatory guidelines; ● patients dropping out of our clinical studies; ● occurrence of adverse events associated with our product candidates; ● inability to use clinical trial results from foreign jurisdictions in support of U.S. regulatory approval; ● changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; ● the cost of clinical studies of our product candidates; ● negative or inconclusive results from our clinical trials which may result in our deciding, or regulators requiring us, to conduct additional clinical studies or abandon development programs for a product candidate; and ● delays in reaching agreement on acceptable terms with third-party manufacturers, or delays in the manufacture of sufficient quantities of our product candidates for use in clinical studies.
Events that may prevent successful or timely completion of clinical development include but are not limited to: ● inability to generate satisfactory preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical studies necessary for product approval; ● delays in reaching agreement on acceptable terms with clinical research organizations (CROs) and clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical study sites; ● delays in obtaining required Institutional Review Board, or IRB, approval at each clinical study site; ● failure to permit the conduct of a study by regulatory authorities, after review of an investigational new drug, or IND, or equivalent foreign application or amendment; ● delays in recruiting qualified patients in our clinical studies; ● failure by clinical sites or our CROs or other third parties to adhere to clinical study requirements or report complete findings; ● failure to perform the clinical studies in accordance with the FDA’s good clinical practices requirements, or applicable foreign regulatory guidelines; ● patients dropping out of our clinical studies; ● occurrence of adverse events associated with our product candidates; ● inability to use clinical trial results from foreign jurisdictions in support of U.S. regulatory approval; ● changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; ● the cost of clinical studies of our product candidates; ● negative or inconclusive results from our clinical trials which may result in our deciding, or regulators requiring us, to conduct additional clinical studies or abandon development programs for a product candidate; and ● delays in reaching agreement on acceptable terms with third-party manufacturers, or delays in the manufacture of sufficient quantities of our product candidates for use in clinical studies.
The process of establishing and maintaining collaborative relationships is difficult, time-consuming and involves significant uncertainty, such as: ● a collaboration partner may shift its priorities and resources away from our product candidates due to a change in business strategies, or a merger, acquisition, sale or downsizing; ● a collaboration partner may seek to renegotiate or terminate their relationships with us due to unsatisfactory clinical results, manufacturing issues, a change in business strategy, a change of control or other reasons; ● a collaboration partner may cease development in therapeutic areas which are the subject of our strategic collaboration; ● a collaboration partner may not devote sufficient capital or resources towards our product candidates; ● a collaboration partner may change the success criteria for a product candidate thereby delaying or ceasing development of such candidate; ● a significant delay in initiation of certain development activities by a collaboration partner will also delay payment of milestones tied to such activities, thereby impacting our ability to fund our own activities; 54 ● a collaboration partner could develop a product that competes, either directly or indirectly, with our product candidate; ● a collaboration partner with commercialization obligations may not commit sufficient financial or human resources to the marketing, distribution or sale of a product; ● a collaboration partner with manufacturing responsibilities may encounter regulatory, resource or quality issues and be unable to meet demand requirements; ● a collaboration partner may terminate a strategic alliance; ● a dispute may arise between us and a partner concerning the research, development or commercialization of a product candidate resulting in a delay in milestones, royalty payments or termination of an alliance and possibly resulting in costly litigation or arbitration which may divert management attention and resources; and ● a partner may use our products or technology in such a way as to invite litigation from a third party.
The process of establishing and maintaining collaborative relationships is difficult, time-consuming and involves significant uncertainty, such as: ● a collaboration partner may shift its priorities and resources away from our product candidates due to a change in business strategies, or a merger, acquisition, sale or downsizing; ● a collaboration partner may seek to renegotiate or terminate their relationships with us due to unsatisfactory clinical results, manufacturing issues, a change in business strategy, a change of control or other reasons; ● a collaboration partner may cease development in therapeutic areas which are the subject of our strategic collaboration; ● a collaboration partner may not devote sufficient capital or resources towards our product candidates; ● a collaboration partner may change the success criteria for a product candidate thereby delaying or ceasing development of such candidate; ● a significant delay in initiation of certain development activities by a collaboration partner will also delay payment of milestones tied to such activities, thereby impacting our ability to fund our own activities; ● a collaboration partner could develop a product that competes, either directly or indirectly, with our product candidate; ● a collaboration partner with commercialization obligations may not commit sufficient financial or human resources to the marketing, distribution or sale of a product; ● a collaboration partner with manufacturing responsibilities may encounter regulatory, resource or quality issues and be unable to meet demand requirements; ● a collaboration partner may terminate a strategic alliance; ● a dispute may arise between us and a partner concerning the research, development or commercialization of a product candidate resulting in a delay in milestones, royalty payments or termination of an alliance and possibly resulting in costly litigation or arbitration which may divert management attention and resources; and ● a partner may use our products or technology in such a way as to invite litigation from a third party.
The laws that may affect our ability to operate include: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; ● federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent; ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology and Clinical Health Act, or HITECH, and implementing regulations, which impose certain requirements relating to the privacy, security, and transmission of individually identifiable health information; 53 ● the Physician Payments Sunshine Act which requires manufacturers of drugs, devices, biologics, and medical supplies to report annually to the U.S.
The laws that may affect our ability to operate include: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; ● federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent; ● the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology and Clinical Health Act, or HITECH, and implementing regulations, which impose certain requirements relating to the privacy, security, and transmission of individually identifiable health information; ● the Physician Payments Sunshine Act which requires manufacturers of drugs, devices, biologics, and medical supplies to report annually to the U.S.
Approval of our product candidates may be delayed or refused for many reasons, including the following: ● The FDA or comparable foreign regulatory authorities may disagree with the design or implementation of the applicable clinical trial; ● A clinical trial might not demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective for any of their proposed indications; ● The results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; ● A clinical trial fail to demonstrate that our product candidates’ clinical and other benefits outweigh their safety risks; ● The FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical programs or clinical trials; 43 ● The data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere; ● The facilities of the any third-party manufacturers with which we may contract may not be adequate to support approval of our product candidates (for example, regulatory approval of cell- and tissue-based products require high standards of quality control); and ● The approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Approval of our product candidates may be delayed or refused for many reasons, including the following: ● The FDA or comparable foreign regulatory authorities may disagree with the design or implementation of the applicable clinical trial; ● A clinical trial might not demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective for any of their proposed indications; ● The results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; ● A clinical trial fail to demonstrate that our product candidates’ clinical and other benefits outweigh their safety risks; ● The FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical programs or clinical trials; ● The data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere; ● The facilities of the any third-party manufacturers with which we may contract may not be adequate to support approval of our product candidates (for example, regulatory approval of cell- and tissue-based products require high standards of quality control); and ● The approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including: ● restrictions on manufacturing such products; 46 ● restrictions on the labeling or marketing of a product; ● restrictions on product distribution or use; ● requirements to conduct post-marketing studies or clinical trials; ● warning letters or holds on clinical trials; ● withdrawal of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of products; ● fines, restitution or disgorgement of profits or revenues; ● suspension or withdrawal of marketing approvals; ● refusal to permit the import or export of our products; ● product seizure or detention; or ● injunctions or the imposition of civil or criminal penalties.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including: ● restrictions on manufacturing such products; ● restrictions on the labeling or marketing of a product; ● restrictions on product distribution or use; ● requirements to conduct post-marketing studies or clinical trials; ● warning letters or holds on clinical trials; ● withdrawal of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of products; ● fines, restitution or disgorgement of profits or revenues; ● suspension or withdrawal of marketing approvals; ● refusal to permit the import or export of our products; ● product seizure or detention; or ● injunctions or the imposition of civil or criminal penalties.
The enrollment of patients depends on many factors, including: ● the patient eligibility criteria defined in the protocol; 44 ● the size of the patient population required for analysis of the trial’s primary endpoints; ● the proximity of patients to study sites; ● the design of the trial; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating; ● our ability to obtain and maintain patient consents; and ● the risk that patients enrolled in clinical trials will drop out of the trials before completion.
The enrollment of patients depends on many factors, including: ● the patient eligibility criteria defined in the protocol; ● the size of the patient population required for analysis of the trial’s primary endpoints; ● the proximity of patients to study sites; ● the design of the trial; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating; ● our ability to obtain and maintain patient consents; and ● the risk that patients enrolled in clinical trials will drop out of the trials before completion.
Any of these occurrences may harm our business, financial condition and prospects significantly. 47 If any of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by any such product, including during any long-term follow-up observation period recommended or required for patients who receive treatment using our products, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw approvals of such product; ● we may be required to recall a product or change the way such product is administered to patients; ● additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product; ● regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; ● we may be required to implement a Risk Evaluation and Mitigation Strategy, or REMS, or create a medication guide outlining the risks of such side effects for distribution to patients; ● the product could become less competitive; ● we could be sued and held liable for harm caused to patients; and ● our reputation may suffer.
Any of these occurrences may harm our business, financial condition and prospects significantly. 48 If any of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by any such product, including during any long-term follow-up observation period recommended or required for patients who receive treatment using our products, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw approvals of such product; ● we may be required to recall a product or change the way such product is administered to patients; ● additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product; ● regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; ● we may be required to implement a Risk Evaluation and Mitigation Strategy, or REMS, or create a medication guide outlining the risks of such side effects for distribution to patients; ● the product could become less competitive; ● we could be sued and held liable for harm caused to patients; and ● our reputation may suffer.
If we are unable to continue to attract and retain high-quality personnel and consultants, the rate and success at which we can discover and develop product candidates and operate our business will be limited. 35 Future growth would impose significant additional responsibilities on our management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants and contractors.
If we are unable to continue to attract and retain high-quality personnel and consultants, the rate and success at which we can discover and develop product candidates and operate our business will be limited. Future growth would impose significant additional responsibilities on our management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants and contractors.
If one or more of these analysts ceases to cover our shares or fails to publish regular reports on our business, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline. You may experience dilution of your ownership interests if we issue additional shares of common stock or preferred stock.
If one or more of these analysts ceases to cover our shares or fails to publish regular reports on our business, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline. 59 You may experience dilution of your ownership interests if we issue additional shares of common stock or preferred stock.
Our future success is dependent on the establishment of a large global market for cell therapies and our ability to capture a share of this market with our product candidates. Even if we, a collaborator, or a licensee of our technology successfully develop and obtain regulatory approval for our product candidates, the market may not understand or accept them.
Our future success is dependent on the establishment of a large global market for cell therapies and our ability to capture a share of this market with our product candidates. 38 Even if we, a collaborator, or a licensee of our technology successfully develop and obtain regulatory approval for our product candidates, the market may not understand or accept them.
Patent and Trademark Office (the “USPTO”) when more than one person files a patent application covering the same technology, or if someone wishes to challenge the validity of an issued patent. At the completion of the interference proceeding, the USPTO will determine which competing applicant is entitled to the patent, or whether an issued patent is valid.
Patent and Trademark Office (the USPTO) when more than one person files a patent application covering the same technology, or if someone wishes to challenge the validity of an issued patent. At the completion of the interference proceeding, the USPTO will determine which competing applicant is entitled to the patent, or whether an issued patent is valid.
Similarly, prices of our common stock may fall rapidly in response to certain events such as unfavorable results of clinical trials or a delay or failure to obtain FDA approval. Further, the failure of our earnings to meet analysts’ expectations could result in a significant rapid decline in the market price of our common stock.
Similarly, prices of AgeX common stock may fall rapidly in response to certain events such as unfavorable results of clinical trials or a delay or failure to obtain FDA approval. Further, the failure of our earnings to meet analysts’ expectations could result in a significant rapid decline in the market price of AgeX common stock.
Securities analysts may not initiate coverage or continue to cover our common stock, and this may have a negative impact on the market price of our shares. The market price and liquidity of our common stock will depend, in part, on the research and reports that securities analysts publish about our business and our common stock.
Securities analysts may not initiate coverage or continue to cover AgeX common stock, and this may have a negative impact on the market price of our shares. The market price and liquidity of AgeX common stock will depend, in part, on the research and reports that securities analysts publish about our business and AgeX common stock.
The anti-bribery provisions of the FCPA are enforced primarily by the United States Department of Justice. The SEC is involved with enforcement of the books and records provisions of the FCPA. Compliance with these anti-bribery laws is expensive and difficult, particularly in countries in which corruption is a recognized problem.
The anti-bribery provisions of the FCPA are enforced primarily by the United States Department of Justice. The SEC is involved with enforcement of the books and records provisions of the FCPA. 42 Compliance with these anti-bribery laws is expensive and difficult, particularly in countries in which corruption is a recognized problem.
Because we will continue to experience net operating losses, our ability to continue as a going concern is subject to our ability to obtain necessary capital from outside sources, including obtaining additional capital from the sale of our common stock or other equity securities or assets, obtaining additional loans from financial institutions or investors, and entering into collaborative research and development arrangements or licensing some or all of our patents and know-how to third parties while retaining a royalty and other contingent payment rights related to the development and commercialization of products covered by the licenses.
Because we will continue to experience operating losses, our ability to continue as a going concern is subject to our ability to obtain necessary capital from outside sources, including obtaining additional capital from the sale of AgeX common stock or other equity securities or assets, obtaining additional loans from financial institutions or investors, and entering into collaborative research and development arrangements or licensing some or all of our patents and know-how to third parties while retaining a royalty and other contingent payment rights related to the development and commercialization of products covered by the licenses.
This means that if an interference proceeding arises with respect to any of our patent applications, we may experience significant expenses and delay in obtaining a patent, and if the outcome of the proceeding is unfavorable to us, the patent could be issued to a competitor rather than to us. ● A derivation proceeding may be instituted by the USPTO or an inventor alleging that a patent or application was derived from the work of another inventor. ● Post Grant Review under the new America Invents Act will make available opposition-like proceedings in the United States.
This means that if an interference proceeding arises with respect to any of our patent applications, we may experience significant expenses and delay in obtaining a patent, and if the outcome of the proceeding is unfavorable to us, the patent could be issued to a competitor rather than to us. ● A derivation proceeding may be instituted by the USPTO or an inventor alleging that a patent or application was derived from the work of another inventor. ● Post Grant Review under the new Leahy Smith America Invents Act (America Invents Act) will make available opposition-like proceedings in the United States.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
We cannot predict if investors will find AgeX common stock less attractive because we may rely on these exemptions. If some investors find AgeX common stock less attractive as a result, there may be a less active trading market for AgeX common stock and our stock price may be more volatile.
This means that if we are unable maintain the listing of our common stock on a national securities exchange, the ability of stockholders to sell their AgeX common stock in the secondary market could be adversely affected.
This means that if we are unable maintain the listing of AgeX common stock on a national securities exchange, the ability of stockholders to sell their AgeX common stock in the secondary market could be adversely affected.
Among other things, these provisions include those establishing: ● no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; ● the ability of our Board of Directors to authorize the issuance of shares of preferred stock and to determine the terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; and ● the ability of our Board of Directors to alter our bylaws without obtaining stockholder approval.
Among other things, these provisions include those establishing: ● no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; 60 ● the ability of the AgeX Board to authorize the issuance of shares of preferred stock and to determine the terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; and ● the ability of the AgeX Board to alter our bylaws without obtaining stockholder approval.
Juvenescence has controlling stakes and minority investments in several other companies engaged in various aspects of the aging industry, which companies may propose collaborations with AgeX.
Juvenescence also has controlling stakes and minority investments in several other companies engaged in various aspects of the aging industry, which companies may propose collaborations with AgeX.
Misconduct by our employees and independent contractors, including principal investigators, contract research organizations, or CROs, consultants, vendors, and any third parties we may engage in connection with development and commercialization, could include intentional, reckless or negligent conduct or unauthorized activities that violate: (i) the laws and regulations of the FDA, EMA rules and regulations and other similar regulatory requirements, including those laws that require the reporting of true, complete and accurate information to such authorities; (ii) manufacturing standards; (iii) data privacy, security, fraud and abuse and other healthcare laws and regulations; or (iv) laws that require the reporting of true, complete and accurate financial information and data.
Misconduct by our employees and independent contractors, including principal investigators, contract research organizations, or CROs, consultants, vendors, and any third parties we may engage in connection with development and commercialization, could include intentional, reckless or negligent conduct or unauthorized activities that violate: (i) the laws and regulations of the FDA, European Medical Agency (EMA) rules and regulations and other similar regulatory requirements, including those laws that require the reporting of true, complete and accurate information to such authorities; (ii) manufacturing standards; (iii) data privacy, security, fraud and abuse and other healthcare laws and regulations; or (iv) laws that require the reporting of true, complete and accurate financial information and data.
Pluripotent stem cell or progenitor cell based products are likely to be more expensive to manufacture on a commercial scale than most other drugs on the market today. The high cost of manufacturing a product will require that we charge our customers a high price for the product in order to cover our costs and earn a profit.
Pluripotent stem cell or progenitor cell based products are likely to be more expensive to manufacture on a commercial scale than most other drugs on the market today. The higher cost of manufacturing a product will require that we charge our customers a higher price for the product in order to cover our costs and earn a profit.
Regardless of whether we do our own manufacturing or rely on third parties to manufacture products for us, we will face all risks related to the manufacture of therapeutic products for use in medicine including the following risks: ● We or any third-party manufacturers might be unable to timely formulate and manufacture our products or produce the quantity and quality required to meet our clinical and commercial needs, if any. ● We or any third-party manufacturers may not be able to execute our manufacturing procedures appropriately. ● Any third-party manufacturers we engage may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our products on a commercial scale. ● We or any third-party manufacturers will be subject to ongoing periodic unannounced inspection by the FDA, and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards.
Regardless of whether we do our own manufacturing or rely on third parties to manufacture products for us, we will face all risks related to the manufacture of therapeutic products for use in medicine including the following risks: ● We or any third-party manufacturers might be unable to timely formulate and manufacture our products or produce the quantity and quality required to meet our clinical and commercial needs, if any. ● We or any third-party manufacturers may not be able to execute our manufacturing procedures appropriately. 39 ● Any third-party manufacturers we engage may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our products on a commercial scale. ● We or any third-party manufacturers will be subject to ongoing periodic unannounced inspection by the FDA, and corresponding state agencies to ensure strict compliance with current good manufacturing practices (cGMP) and other government regulations and corresponding foreign standards.
Our Board of Directors may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us and such other factors as our Board of Directors may deem relevant.
The AgeX Board may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us and such other factors as the AgeX Board may deem relevant.
If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our ability to generate revenues and become profitable could be impaired. 51 Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for approved products.
If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our ability to generate revenues and become profitable could be impaired. 52 Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for approved products.
Success in selling any pharmaceutical and cell-based products and medical devices that we may develop may depend in part on the extent to which health insurance companies, HMOs, and government health administration authorities such as Medicare and Medicaid will pay for the cost of the products and related treatment.
Success in selling any pharmaceutical and cell-based products and medical devices that we may develop may depend in part on the extent to which health insurance companies, health maintenance organizations (HMOs), and government health administration authorities such as Medicare and Medicaid will pay for the cost of the products and related treatment.
Activities subject to these laws could also involve the improper use or misrepresentation of information obtained in the course of clinical trials, creation of fraudulent data in pre-clinical studies or clinical trials or illegal misappropriation of drug product, which could result in regulatory sanctions and cause serious harm to our reputation.
Activities subject to these laws could also involve the improper use or misrepresentation of information obtained in the course of clinical trials, creation of fraudulent data in preclinical studies or clinical trials or illegal misappropriation of drug product, which could result in regulatory sanctions and cause serious harm to our reputation.
In addition, AgeX, through our subsidiary ReCyte Therapeutics, is a sublicensee under a cross-license between Lineage and Asterias, which creates another potential risk of Asterias and AgeX creating competing products. We may not be able to enforce our intellectual property rights throughout the world.
AgeX, through our subsidiary ReCyte Therapeutics, is a sublicensee under a cross-license between Lineage and Asterias, which creates another potential risk of Asterias and AgeX creating competing products. We may not be able to enforce our intellectual property rights throughout the world.
We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act.
We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended (the Securities Act); (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended (the Exchange Act).
To the extent that we raise additional capital through the sale of shares of our common stock or other equity securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder.
To the extent that we raise additional capital through the sale of shares of AgeX common stock or other equity securities, AgeX your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder.
The price of our common stock may rise rapidly in response to certain events, such as the commencement of clinical trials of an experimental new therapy, even though the outcome of those trials and the likelihood of ultimate FDA approval of a therapeutic product remain uncertain.
The price of AgeX common stock may rise rapidly in response to certain events, such as the commencement of clinical trials of an experimental new therapy, even though the outcome of those trials and the likelihood of ultimate FDA approval of a therapeutic product remain uncertain.
These factors raise substantial doubt regarding our ability to continue as a going concern and the report of our independent registered public accountants accompanying our audited consolidated financial statements in this Report contains a qualification to such effect.
These factors raise substantial doubt regarding our ability to continue as a going concern and the report of our independent registered public accountants accompanying our audited consolidated financial statements included elsewhere in this Report contains a qualification to such effect.
We do not have any control over these analysts. There is no guarantee that securities analysts will cover our common stock. If securities analysts do not cover our common stock, the lack of research coverage may adversely affect the market price of those shares.
We do not have any control over these analysts. There is no guarantee that securities analysts will cover AgeX common stock. If securities analysts do not cover AgeX common stock, the lack of research coverage may adversely affect the market price of those shares.
In addition, because our Board of Directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors.
In addition, because the AgeX Board is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of the AgeX Board.
The market price of our common stock may fluctuate significantly, depending upon many factors, some of which may be beyond our control, including, but not limited to: ● a shift in our investor base; ● our quarterly or annual earnings, or those of comparable companies; ● actual or anticipated fluctuations in our operating results; ● our ability to obtain financing as needed; ● changes in laws and regulations affecting our business; ● changes in accounting standards, policies, guidance, interpretations or principles; ● announcements by us or our competitors of significant investments, acquisitions or dispositions; 58 ● the failure of securities analysts to cover our common stock; ● changes in earnings estimates by securities analysts or our ability to meet those estimates; ● the operating performance and stock price of comparable companies; ● overall market fluctuations; and ● general economic conditions and other external factors.
The market price of AgeX common stock may fluctuate significantly, depending upon many factors, some of which may be beyond our control, including, but not limited to: ● a shift in our investor base; ● the impact of the Reverse Stock Split; ● our quarterly or annual earnings, or those of comparable companies; ● actual or anticipated fluctuations in our operating results; ● our ability to obtain financing as needed; ● changes in laws and regulations affecting our business; ● changes in accounting standards, policies, guidance, interpretations or principles; ● announcements by us or our competitors of significant investments, acquisitions or dispositions; ● the failure of securities analysts to cover AgeX common stock; ● changes in earnings estimates by securities analysts or our ability to meet those estimates; ● the operating performance and stock price of comparable companies; ● overall market fluctuations; and ● general economic conditions and other external factors.
Risks relating to compliance with laws and regulations may be heightened if we operate globally. 52 Regulations governing the health care industry are subject to change, with possibly retroactive effect, including: ● new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to health care availability, pricing or marketing practices, compliance with wage and hour laws and other employment practices, method of delivery, payment for health care products and services, compliance with health information and data privacy and security laws and regulations, tracking and reporting payments and other transfers of value made to physicians and teaching hospitals, extensive anti-bribery and anti-corruption prohibitions, product serialization and labeling requirements and used product take-back requirements; ● changes in the FDA and foreign regulatory approval processes that may delay or prevent the approval of new products and result in lost market opportunity; ● requirements that provide for increased transparency of clinical trial results and quality data, such as the EMA’s clinical transparency policy, which could impact our ability to protect trade secrets and competitively-sensitive information contained in approval applications or could be misinterpreted leading to reputational damage, misperception, or legal action which could harm our business; and ● changes in FDA and foreign regulations that may require additional safety monitoring, labeling changes, restrictions on product distribution or use, or other measures after the introduction of our products to market, which could increase our costs of doing business, adversely affect the future permitted uses of approved products, or otherwise adversely affect the market for our products.
Regulations governing the health care industry are subject to change, with possibly retroactive effect, including: ● new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to health care availability, pricing or marketing practices, compliance with wage and hour laws and other employment practices, method of delivery, payment for health care products and services, compliance with health information and data privacy and security laws and regulations, tracking and reporting payments and other transfers of value made to physicians and teaching hospitals, extensive anti-bribery and anti-corruption prohibitions, product serialization and labeling requirements and used product take-back requirements; 53 ● changes in the FDA and foreign regulatory approval processes that may delay or prevent the approval of new products and result in lost market opportunity; ● requirements that provide for increased transparency of clinical trial results and quality data, such as the EMA’s clinical transparency policy, which could impact our ability to protect trade secrets and competitively-sensitive information contained in approval applications or could be misinterpreted leading to reputational damage, misperception, or legal action which could harm our business; and ● changes in FDA and foreign regulations that may require additional safety monitoring, labeling changes, restrictions on product distribution or use, or other measures after the introduction of our products to market, which could increase our costs of doing business, adversely affect the future permitted uses of approved products, or otherwise adversely affect the market for our products.
Because we do not pay dividends, our stock may not be a suitable investment for anyone who needs to earn dividend income. We do not have current plans to pay any cash dividends on our common stock.
Because we do not pay dividends, AgeX common stock may not be a suitable investment for anyone who needs to earn dividend income. We do not have current plans to pay any cash dividends on AgeX common stock.
Our therapeutic products in development are likely to face competition from a large number of companies and technological strategies including therapeutics intended to address our lead indications. See “Business – Competition.” We may also face competition from large and specialty pharmaceutical and biotechnology companies, academic research institutions, government agencies and public and private research institutions.
Our therapeutic products in development are likely to face competition from a large number of companies and technological strategies including therapeutics intended to address our lead indications. See “ Business—Competition .” 43 We may also face competition from large and specialty pharmaceutical and biotechnology companies, academic research institutions, government agencies and public and private research institutions.
As a result, it may be more difficult for us to attract and retain qualified people to serve on our Board of Directors, our board committees or as executive officers. We do not know, however, if we will be able to maintain existing insurance with adequate levels of coverage.
As a result, it may be more difficult for us to attract and retain qualified people to serve on the AgeX Board, our board committees or as executive officers. We do not know, however, if we will be able to maintain existing insurance with adequate levels of coverage.
We and our third-party contractors will be required to comply with the GLPs and GCPs, which are regulations and guidelines enforced by the FDA and are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Conference on Harmonization guidelines for any of our product candidates that are in preclinical and clinical development.
We and our third-party contractors will be required to comply with the good laboratory practices (GLPs) and GCPs, which are regulations and guidelines enforced by the FDA and are also required by the competent authorities of the member states of the European Economic Area (EEA) and comparable foreign regulatory authorities in the form of International Conference on Harmonization guidelines for any of our product candidates that are in preclinical and clinical development.
These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock.
These provisions could also limit the price that investors might be willing to pay in the future for shares of AgeX common stock, thereby depressing the market price of AgeX common stock.
Gene therapy clinical trials conducted at institutions that receive funding for recombinant DNA research from the NIH, also are potentially subject to review by the NIH Office of Science Policy’s Recombinant DNA Advisory Committee, or the RAC, in limited circumstances.
Gene therapy clinical trials conducted at institutions that receive funding for recombinant DNA research from the National Institute of Health (NIH) also are potentially subject to review by the NIH Office of Science Policy’s Recombinant DNA Advisory Committee, or the RAC, in limited circumstances.
Because we are engaged in the development of pharmaceutical and cell therapy products, the price of shares of our common stock may rise and fall rapidly.
Because we are engaged in the development of pharmaceutical and cell therapy products, the price of shares of AgeX common stock may rise and fall rapidly.
Similarly, if Reverse Bio or NeuroAirmid raise capital through the sale of equity securities or convertible debt securities AgeX’s interest in those subsidiaries will be diluted and the terms of equity securities issued by those subsidiaries may include liquidation or other preferences that adversely affect our rights as a common stockholder of the subsidiary.
Similarly, if any of our subsidiaries raise capital through the sale of equity securities or convertible debt securities AgeX’s interest in those subsidiaries will be diluted and the terms of equity securities issued by those subsidiaries may include liquidation or other preferences that adversely affect our rights as a common stockholder of the subsidiary.
On November 22, 2022, we received a notification from the staff of the Exchange indicating that the Exchange has accepted our revised listing Compliance Plan and has granted us an extension of time to regain compliance with the Exchange’s continued listing standards as set forth in Section 1003(a)(i) and (ii) of the Exchange Company Guide by increasing our stockholders equity to not less than $4,000,000.
On November 22, 2022, we received a notification from the staff of the NYSE American indicating that the NYSE American accepted our revised listing Compliance Plan and granted us an extension of time to regain compliance with the NYSE American continued listing standards as set forth in Section 1003(a)(i) and (ii) of the NYSE American Company Guide by increasing our stockholders equity to not less than $4,000,000.
The degree of market acceptance of any of our products will depend on a number of factors, including without limitation: ● the efficacy of the product as demonstrated in clinical studies and potential advantages over competing treatments; ● the prevalence and severity of the disease and any side effects; ● the clinical indications for which approval is granted, including any limitations or warnings contained in a product’s approved labeling; ● the convenience and ease of administration; ● the cost of treatment, particular as additive to existing treatments; ● the willingness of the patients and physicians to accept and use these therapies and the perception of efficacy and safety of our approved products by such parties; ● the marketing, sales and distribution support for the products; ● the publicity and ethical, social and legal concerns regarding the use of embryonic stem cells for our products or competing products and treatments; ● government regulations restricting or prohibiting our research or manufacturing processes for stem cells due to ethical, social and legal concerns regarding their use in medical research and treatment; and ● the pricing and availability of third-party insurance coverage and reimbursement. 36 Even if a product displays a favorable efficacy and safety profile upon approval, market acceptance of the product will initially remain uncertain.
The degree of market acceptance of any of our products will depend on a number of factors, including without limitation: ● the efficacy of the product as demonstrated in clinical studies and potential advantages over competing treatments; ● the prevalence and severity of the disease and any side effects; ● the clinical indications for which approval is granted, including any limitations or warnings contained in a product’s approved labeling; ● the convenience and ease of administration; ● the cost of treatment, particular as additive to existing treatments; ● the willingness of the patients and physicians to accept and use these therapies and the perception of efficacy and safety of our approved products by such parties; ● the marketing, sales and distribution support for the products; ● the publicity and ethical, social and legal concerns regarding the use of embryonic stem cells for our products or competing products and treatments; ● government regulations restricting or prohibiting our research or manufacturing processes for stem cells due to ethical, social and legal concerns regarding their use in medical research and treatment; and ● the pricing and availability of third-party insurance coverage and reimbursement.
Our interactions in the U.S. or abroad with physicians and other health care providers that prescribe or purchase our products will also be subject to government regulation designed to prevent fraud and abuse in the sale and use of the products and place greater restrictions on the marketing practices of health care companies.
Our interactions in the United States or abroad with physicians and other health care providers that prescribe or purchase our products will also be subject to government regulation designed to prevent fraud and abuse in the sale and use of the products and place greater restrictions on the marketing practices of health care companies.
The future issuance of any additional shares of common stock or other securities may create downward pressure on the trading price of our common stock.
The future issuance of any additional shares of AgeX common stock or other securities may create downward pressure on the trading price of AgeX common stock.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the DGCL, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Neither we nor any future collaborator or licensee is permitted to market any of our product candidates in the United States until we receive regulatory approval of a biologic license application, or BLA, from the FDA.
Neither we nor any future collaborator or licensee is permitted to market any of our product candidates in the United States until we receive regulatory approval of a BLA from the FDA.
Risks Related to Our Relationship with Juvenescence Conflicts of interest may arise from our relationship with Juvenescence, which owns a significant percentage of our common stock and is a significant creditor and will be able to substantially influence us and exert control over matters subject to stockholder approval and the election of directors.
Risks Related to Our Relationship with Juvenescence Conflicts of interest may arise from our relationship with Juvenescence, which owns a significant percentage of AgeX common stock and is a significant creditor and will be able to substantially influence us and exert control over matters subject to stockholder approval.
If we are unable to maintain the listing of our common stock on the Exchange or another national securities exchange, our common stock could become subject to the so-called “penny stock” rules if the shares have a market value of less than $5.00 per share.
If we are unable to maintain the listing of AgeX common stock on the NYSE American or another national securities exchange, AgeX common stock could become subject to the so-called “penny stock” rules if the shares have a market value of less than $5.00 per share.
We may determine to expand our organization and obtain laboratory facilities if we are able to raise sufficient capital to do so, and we may experience difficulties in managing this growth, which could disrupt our operations. As of December 31, 2022, we had 9 employees.
We may determine to expand our organization and obtain laboratory facilities if we are able to raise sufficient capital to do so, and we may experience difficulties in managing this growth, which could disrupt our operations. As of December 31, 2023, we had eight employees.
The terms of our loans from Juvenescence include certain covenants that among other matters such as financial reporting: (i) impose financial restrictions on AgeX while the loans remain unpaid, including restrictions on the incurrence of additional indebtedness by AgeX and its subsidiaries, except that Reverse Bio will be permitted to incur debt convertible into equity not guaranteed or secured by the assets of AgeX or any other AgeX subsidiary, and the restrictions on the incurrence of indebtedness applicable to Reverse Bio will end if it raises more than $15 million in debt or equity financing by May 15, 2023; (ii) require that AgeX use loan proceeds and funds that may be raised through certain equity offerings only for research and development work, professional and administrative expenses, for general working capital, and for repayment of all or a portion of AgeX’s indebtedness to Juvenescence; and (iii) prohibit AgeX from making additional investments in subsidiaries, unless AgeX obtains the written consent of Juvenescence to a transaction that otherwise would be prohibited or restricted.
The terms of our loans from Juvenescence include certain covenants that among other matters such as financial reporting: (i) impose financial restrictions on AgeX while the loans remain unpaid, including restrictions on the incurrence of additional indebtedness by AgeX and its subsidiaries, except that Reverse Bio will be permitted to incur debt convertible into equity not guaranteed or secured by the assets of AgeX or any other AgeX subsidiary; (ii) require that AgeX use loan proceeds and funds that may be raised through certain equity offerings only for research and development work, professional and administrative expenses, for general working capital, and for repayment of all or a portion of AgeX’s indebtedness to Juvenescence; and (iii) prohibit AgeX from making additional investments in subsidiaries, unless AgeX obtains the written consent of Juvenescence to a transaction that otherwise would be prohibited or restricted.
During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own pre-clinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product.
During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full a biologics license application (BLA) for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product.
Provisions in our certificate of incorporation and bylaws and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
Provisions in AgeX’s Certificate of Incorporation (the “AgeX Charter”) and AgeX’s Bylaws and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
As a result, we could lose some or all of our assets, leaving few if any assets available for the operation of our business, or for sale for the benefit of our stockholders through a winding up of our affairs and liquidation of our assets.
As a result, we and those subsidiaries could lose some or all of our respective assets, leaving few if any assets available for the operation of our business or the businesses of our subsidiaries, or for sale for the benefit of our stockholders through a winding up of our affairs and liquidation of our assets.
Our continued net operating losses, the amount of our debt obligations to Juvenescence and the provisions of our indebtedness agreements with them, including restrictions on the use of loan funds and the security interest they hold in our assets, the risks associated with the development of our product candidates and technologies, and our deferral of in-house development of our product candidates and technologies in connection with our reductions in staffing and the closing of our research laboratory facilities, will increase the difficulty in obtaining such capital, and there can be no assurances that we will be able to obtain such capital on favorable terms or at all.
Our continued operating losses, the amount of our debt obligations to Juvenescence and the provisions of our indebtedness agreements with them, including restrictions on the use of loan funds and the security interest they hold in our assets and assets of certain of our subsidiaries, Juvenescence’s ownership of shares of AgeX Preferred Stock, the risks associated with the development of our product candidates and technologies, and our deferral of in-house development of our product candidates and technologies in connection with our reductions in staffing and the closing of our research laboratory facilities, will increase the difficulty in obtaining such capital, and there can be no assurances that we will be able to obtain such capital on favorable terms or at all.
The declaration, amount and payment of any future dividends on shares of common stock will be at the sole discretion of our Board of Directors.
The declaration, amount and payment of any future dividends on shares of common stock will be at the sole discretion of the AgeX Board.
If an Event of Default, as defined in the Secured Note or the $10 Million Secured Note were to occur Juvenescence could foreclose on its security interest and sell our assets to satisfy the unpaid principal balance of those loans plus certain loan origination fees and costs incurred in connection with the Event of Default and the foreclosure and sale of the assets.
If an Event of Default, as defined in the 2022 Secured Note or the 2023 Secured Note, were to occur Juvenescence could foreclose on its security interest and sell our assets and the assets of those subsidiaries to satisfy the unpaid principal balances of those loans plus certain loan origination fees and costs incurred in connection with the Event of Default and the foreclosure and sale of the assets.
If a collaboration partner fails to conduct its product development, commercialization, regulatory compliance, sales and marketing or distribution activities successfully and in a timely manner, or if it terminates or materially modifies its agreements with us, the development and commercialization of one or more product candidates could be delayed, curtailed, or terminated because we may not have sufficient financial resources or capabilities to continue such development and commercialization on our own.
If a collaboration partner fails to conduct its product development, commercialization, regulatory compliance, sales and marketing or distribution activities successfully and in a timely manner, or if it terminates or materially modifies its agreements with us, the development and commercialization of one or more product candidates could be delayed, curtailed, or terminated because we may not have sufficient financial resources or capabilities to continue such development and commercialization on our own. 55 We have no marketing, sales, or distribution resources for the commercialization of any products or technologies that we might successfully develop.
If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate. 34 We have not tested any of our product candidates in clinical trials.
If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
We will need to rely on third parties, such as contract research organizations, data management companies, contract clinical research associates, medical institutions, clinical investigators and contract laboratories to conduct any clinical trials that we may undertake for our product candidates.
We will need to rely on third parties, such as contract research organizations, data management companies, contract clinical research associates, medical institutions, clinical investigators and contract laboratories to conduct any clinical trials that we may undertake for our product candidates. We may also rely on third parties to assist with our preclinical development of product candidates.
Provisions in our certificate of incorporation and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of our company that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares.
Provisions in the AgeX Charter and AgeX’s Bylaws may discourage, delay or prevent a merger, acquisition or other change in control of our company that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares.
On November 17, 2021, we received a letter (the “Deficiency Letter”) from the staff of the NYSE American (the “Exchange”) indicating that AgeX does not meet certain of the Exchange’s continued listing standards as set forth in Section 1003(a)(i) of the Exchange Company Guide in that we have stockholders’ equity of less than $2,000,000 and have incurred losses from continuing operations and/or net losses during our two most recent fiscal years.
On November 17, 2021, we received a letter (the Deficiency Letter) from the staff of the NYSE American indicating that AgeX did not meet certain of the NYSE American continued listing standards as set forth in Section 1003(a)(i) of the NYSE American Company Guide in that we had stockholders’ equity of less than $2,000,000 and had incurred losses from continuing operations and/or net losses during our two most recent fiscal years.
We will not have control over third-party manufacturers’ compliance with applicable regulations and standards. ● We may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our product candidates. ● Third-party manufacturers could breach or terminate their agreements with us. ● We or third-party manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments. 37 In addition, we may rely on third parties to perform release testing on our product candidates prior to delivery to patients.
We will not have control over third-party manufacturers’ compliance with applicable regulations and standards. ● We may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our product candidates. ● Third-party manufacturers could breach or terminate their agreements with us. ● We or third-party manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments.
Unless we are able to raise the capital required to construct our own manufacturing facilities and are able to develop the expertise to manage and operate a manufacturing facility of our own, we may need to rely on third-party manufacturers to manufacture any products that we develop.
Unless we are able to raise the capital required to construct our own manufacturing facilities and are able to develop the expertise to manage and operate a manufacturing facility of our own, which we do not expect to undertake, we would need to rely on third-party manufacturers to manufacture any products that we develop.
The Exchange staff has accepted our Compliance Plan but later required us to revise the Compliance Plan as we remained out of listing compliance.
The NYSE American staff accepted our Compliance Plan but later required us to revise the Compliance Plan as we remained out of listing compliance.
Further, our obligations under the Secured Note and $10 Million Secured Note are collateralized by all of our assets under the terms of the Security Agreement.
Further, our obligations under the 2022 Secured Note and 2023 Secured Note are collateralized by all of our assets under the terms of the Security Agreement.
Public Health Service Act, which prohibits, among other things, the introduction into interstate commerce of a biological product unless a biologics license is in effect for that product; and ● state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payors, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or that otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state laws governing the privacy and security of health information in certain circumstances.
Public Health Service Act, which prohibits, among other things, the introduction into interstate commerce of a biological product unless a biologics license is in effect for that product; and ● state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payors, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or that otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state laws governing the privacy and security of health information in certain circumstances. 54 Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws.
Pursuant to Section 1009 of the Exchange Company Guide and as provided in the Deficiency Letter provided the Exchange staff with a plan (the “Compliance Plan”) advising the Exchange staff of action we have taken and will take that would bring AgeX into compliance with the Exchange’s continued listing standards.
Pursuant to Section 1009 of the NYSE American Company Guide and as provided in the Deficiency Letter provided, we provided the NYSE American staff with a plan (the Compliance Plan) advising the NYSE American staff of action we had taken and will take that would bring AgeX into compliance with the NYSE American continued listing standards.
We have incurred operating losses and negative cash flows since inception and had an accumulated deficit of $116.2 million as of December 31, 2022. We expect to continue to incur operating losses and negative cash flows.
We have incurred operating losses and negative cash flows since inception and had an accumulated deficit of $131.0 million as of December 31, 2023. We expect to continue to incur operating losses and negative cash flows.
Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to develop, gain regulatory approval of and commercialize product candidates successfully.
Furthermore, replacing executive officers and key employees may be difficult, in particular during the pendency of the Merger, and may take an extended period of time because of the uncertainty about such persons roles following the Merger and the limited number of individuals in our industry with the breadth of skills and experience required to develop, gain regulatory approval of and commercialize product candidates successfully.
Accordingly, there is only a limited history of the public trading of our common stock and there can be no assurance that an active market for our common stock will be sustained. We cannot predict the prices at which our common stock may trade.
Public trading of AgeX common stock on the NYSE American began on November 29, 2018. Accordingly, there is only a limited history of the public trading of AgeX common stock and there can be no assurance that an active market for AgeX common stock will be sustained. We cannot predict the prices at which AgeX common stock may trade.
Our patents may not protect our technologies or products from competition. ● We might not be able to obtain any patents beyond those we already own or have licensed or sublicensed, and any patents that we do obtain might not be comprehensive enough to provide us with meaningful patent protection. ● There will always be a risk that our competitors might be able to successfully challenge the validity or enforceability of any patent issued to us. ● In addition to interference proceedings, the USPTO can reexamine issued patents at the request of a third party.
Research and development we perform that is funded by grants from the federal government, and any intellectual property that we create using those grants, is subject to the rights maintained by the federal government. 57 Our patents may not protect our technologies or products from competition. ● We might not be able to obtain any patents beyond those we already own or have licensed or sublicensed, and any patents that we do obtain might not be comprehensive enough to provide us with meaningful patent protection. ● There will always be a risk that our competitors might be able to successfully challenge the validity or enforceability of any patent issued to us. ● In addition to interference proceedings, the USPTO can reexamine issued patents at the request of a third party.
The products offered by foreign competitors may compete with our products in jurisdictions where we do not have any issued or licensed patents or where any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from competing with us. 57 Moreover, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.
The products offered by foreign competitors may compete with our products in jurisdictions where we do not have any issued or licensed patents or where any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from competing with us.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. Legal Proceedings From time to time, we may be involved in routine litigation incidental to the conduct of our business. We are not presently involved in any material litigation or proceedings, and to our knowledge no such litigation or proceedings are contemplated. Item 4. Mine Safety Disclosures Not applicable. 61 PART II
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Item 3. Legal Proceedings AgeX may from time to time be a party to litigation and subject to claims incident to the ordinary course of business. In the future, AgeX may become a party to an increasing number of litigation matters and claims, including in connection with Merger Agreement and the transactions contemplated thereby.
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The outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially affect AgeX’s future results of operations, cash flows or financial position.
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On December 11, 2023, a purported stockholder of AgeX, filed a putative shareholder class action and derivative lawsuit in the Superior Court of the State of California, County of Alameda, captioned Buttner, et al. v. AgeX Therapeutics, Inc., et al. , Case No. 23CV057083 (the Buttner Complaint).
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The Buttner Complaint names AgeX, the AgeX Board, an officer of AgeX, Juvenescence Limited and Juvenescence US Corp. as defendants.
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The Buttner Complaint alleges direct claims against the individual defendants for breaches of fiduciary duty in connection with their approval of the Merger and disclosures made by AgeX in connection therewith and, in the alternative, alleges derivative claims, purportedly on behalf of AgeX, against the individual defendants for such alleged breaches of fiduciary duty.
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The Buttner Complaint also alleges direct and derivative claims against Juvenescence Limited, Juvenescence US Corp., and one member of the AgeX Board for breaches of fiduciary duty as alleged controlling stockholders of AgeX.
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On February 29, 2024, the plaintiff filed a request for dismissal of the action without prejudice and on March 5, 2024 the court entered an order dismissing the action per the plaintiff’s request. Item 4. Mine Safety Disclosures Not applicable. 61 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table shows certain information concerning the stock options outstanding and available for issuance under all of our compensation plans and agreements as of December 31, 2022 (in thousands, except weighted average exercise price): Plan Category Number of Shares to be Issued upon Exercise of Outstanding Options and Rights Weighted Average Exercise Price of the Outstanding Options, and Rights Number of Shares Remaining Available for Future Issuance under Equity Compensation Plans AgeX Stock Option Plans Approved by Stockholders (1) 3,264 $ 2.25 5,139 (1) This information pertains to our 2017 Equity Incentive Plan.
Biggest changeThe following table shows certain information concerning the stock options outstanding and available for issuance under all of our compensation plans and agreements as of December 31, 2023 (in thousands, except weighted average exercise price): Plan Category Number of Shares to be Issued upon Exercise of Outstanding Options and Rights Weighted Average Exercise Price of the Outstanding Options and Rights Number of Shares Remaining Available for Future Issuance under Equity Compensation Plans AgeX Stock Option Plans Approved by Stockholders (1) 83 $ 80.28 156 (1) This information pertains to our 2017 Equity Incentive Plan.
Additional information concerning our 2017 Equity Incentive Plan and the stock options may be found in Note 8, Stock-Based Awards to the consolidated financial statements included elsewhere in this Report. Item 6. Selected Financial Data Not applicable.
Additional information concerning our 2017 Equity Incentive Plan and the stock options may be found in Note 8, Stock-Based Awards to the consolidated financial statements included elsewhere in this Report. Item 6. Reserved Not applicable.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our common stock has been traded on the NYSE American under the symbol “AGE” since November 29, 2018. As of March 20, 2023, we had 232 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our common stock has been traded on the NYSE American under the symbol “AGE” since November 29, 2018. As of March 12, 2024, we had 228 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAlthough we have been able to reduce our operating expenses by eliminating internal research and development activities and focusing instead on out-sourcing research and development and seeking licensing arrangements for our technologies, this approach has also made it more difficult for us to make progress in developing our target product candidates and technologies, which in turn may make it more difficult for us to raise capital.
Biggest changeThose shares of common stock issued to Juvenescence increased Juvenescence’s direct and indirect holding of outstanding shares of AgeX common stock to 1,889,323 shares, or approximately 75.6% of the shares of common stock outstanding on March 14, 2024, including shares of AgeX common stock held by Juvenescence’s subsidiaries but not taking into account any additional shares of AgeX common stock that Juvenescence may acquire through the conversion of loan balances and the exercise of AgeX common stock purchase warrants or the exercise of Post-Merger Warrants that were distributed by AgeX on March 19. 68 Although we have been able to reduce our operating expenses by eliminating internal research and development activities and focusing instead on out-sourcing research and development and seeking licensing arrangements for our technologies, this approach has also made it more difficult for us to make progress in developing our target product candidates and technologies, which in turn may make it more difficult for us to raise capital.
Other Expense, Net 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 Secured Note.
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.
The peer companies used include selected public companies within the biotechnology industry with comparable characteristics to AgeX, including similarity in size, lines of business, market capitalization, revenue and financial leverage. 64 The risk-free interest rate assumption is based upon observed interest rates on the United States government securities appropriate for the expected term of our stock options.
The peer companies used include selected public companies within the biotechnology industry with comparable characteristics to AgeX, including similarity in size, lines of business, market capitalization, revenue and financial leverage. The risk-free interest rate assumption is based upon observed interest rates on the United States government securities appropriate for the expected term of our stock options.
Compensation expense for non-employee grants is recorded on a straight-line basis in the consolidated statements of operations. The Black-Scholes option pricing model requires us to make certain assumptions including the fair value of the underlying common stock, the expected term, the expected volatility, the risk-free interest rate and the dividend yield.
Compensation expense for non-employee grants is recorded on a straight-line basis in the consolidated statements of operations. 64 The Black-Scholes option pricing model requires us to make certain assumptions including the fair value of the underlying common stock, the expected term, the expected volatility, the risk-free interest rate and the dividend yield.
As of December 31, 2022, we had capital loss carryforwards for federal and state tax purposes of $12.4 million and $5.9 million, respectively. The federal and California capital loss carryforwards will expire in 2026. A valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax assets will not be realized.
As of December 31, 2023, we had capital loss carryforwards for federal and state tax purposes of $12.4 million and $5.9 million, respectively. The federal and California capital loss carryforwards will expire in 2026. A valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax assets will not be realized.
The unavailability or inadequacy of financing to meet future capital needs could force us to modify, curtail, delay, or suspend some or all aspects of planned operations.
The unavailability or inadequacy of financing to meet future capital needs could force us to modify, curtail, delay, or suspend some or all aspects of our planned operations.
On an ongoing basis, we evaluate our estimates that are subject to significant judgment, including those related to going concern assessment of consolidated financial statements, allocations and adjustments necessary for carve-out basis of presentation, including the separate return method for income taxes, useful lives associated with long-lived assets, including evaluation of asset impairment, allowances for uncollectible accounts receivables, loss contingencies, deferred income taxes and tax reserves, including valuation allowances related to deferred income taxes, and assumptions used to value stock-based awards or other equity instruments and liability classified warrants.
On an ongoing basis, we evaluate our estimates that are subject to significant judgment, including those related to going concern assessment of consolidated financial statements, allocations and adjustments necessary for carve-out basis of presentation, including the separate return method for income taxes, useful lives associated with long-lived assets, including evaluation of asset impairment, loss contingencies, deferred income taxes and tax reserves, including valuation allowances related to deferred income taxes, and assumptions used to value stock-based awards or other equity instruments and liability classified warrants.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information necessary to understand our audited consolidated financial statements for the years ended December 31, 2022 and 2021, and highlight certain other information which, in the opinion of management, will enhance a reader’s understanding of our financial condition, changes in financial condition and results of operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information necessary to understand our audited consolidated financial statements for the years ended December 31, 2023 and 2022, and highlight certain other information which, in the opinion of management, will enhance a reader’s understanding of our financial condition, changes in financial condition and results of operations.
Because our common stock had no publicly traded history prior to November 29, 2018, for the years ended December 31, 2022 and 2021, we estimated the expected volatility using our own stock price volatility to the extent applicable or a combination of our stock price volatility and the stock price volatility of peer companies, for a period equal to the expected term of the options.
Because our common stock had no publicly traded history prior to November 29, 2018, for the years ended December 31, 2023 and 2022, we estimated the expected volatility using our own stock price volatility to the extent applicable or a combination of our stock price volatility and the stock price volatility of peer companies, for a period equal to the expected term of the options.
Income Taxes As of December 31, 2022, the deferred tax assets and liabilities presented in Note 9, Income Taxes included elsewhere in this Report, including net operating loss carryforwards and research and development credits, represent the tax attributes of AgeX and its subsidiaries.
Income Taxes As of December 31, 2023, the deferred tax assets and liabilities presented in Note 9, Income Taxes included elsewhere in this Report, including net operating loss carryforwards and research and development credits, represent the tax attributes of AgeX and its subsidiaries.
We do not have any therapeutic products approved for sale and have generated insignificant revenues from commercialized product sales, and we do not expect to generate any significant revenues from product sales for the foreseeable future. Our operating expenses consist of research and development expenses primarily from our pre-clinical programs and general and administrative expenses.
Financial Operations Overview We do not have any therapeutic products approved for sale and have generated insignificant revenues from commercialized product sales, and we do not expect to generate any significant revenues from product sales for the foreseeable future. Our operating expenses consist of research and development expenses primarily from our pre-clinical programs and general and administrative expenses.
Revenues from the sale of research products are included in other revenues. Operating Expenses We have maintained a minimal work force since the May 1, 2020 reduction in force which resulted in the layoff of most of our research and development personnel and certain administrative personnel.
Revenues from the sale of research products are included in other revenues. 66 Operating Expenses We have maintained a minimal workforce since the May 1, 2020 reduction in force which resulted in the layoff of most of our research and development personnel and certain administrative personnel.
There were no significant changes to the disclosures with respect to our critical accounting policies for the years ended December 31, 2022 and 2021.
There were no significant changes to the disclosures with respect to our critical accounting policies for the years ended December 31, 2023 and 2022.
The following table shows our consolidated operating expenses for the years ended December 31, 2022 and 2021 (in thousands).
The following table shows our consolidated operating expenses for the years ended December 31, 2023 and 2022 (in thousands).
Comparison of Years Ended December 31, 2022 and 2021 Revenues and Cost of Sales The amounts in the table below show our consolidated revenues by source and cost of sales for the years ended December 31, 2022 and 2021 (in thousands).
Results of Operations Comparison of Years Ended December 31, 2023 and 2022 Revenues and Cost of Sales The amounts in the table below show our consolidated revenues by source and cost of sales for the years ended December 31, 2023 and 2022 (in thousands).
See Note 5, Related Party Transactions to our consolidated financial statements included elsewhere in this Report for additional information about our loan agreements with Juvenescence. Off-Balance Sheet Arrangements As of December 31, 2022, we did not have any off-balance sheet arrangements, as defined in Item 303(a) (4) (ii) of SEC Regulation S-K.
See Notes 5, Related Party Transactions and 7, Stockholders’ Equity (Deficit), to our consolidated financial statements included elsewhere in this Report for additional information about our loan agreements with Juvenescence. Off-Balance Sheet Arrangements As of December 31, 2023, we did not have any off-balance sheet arrangements, as defined in Item 303(a) (4) (ii) of SEC Regulation S-K.
See “Liquidity and Capital Resources” for a discussion of our available capital resources and our need for financing. Our net loss from continuing operations before interest and other expenses were $7.0 million and $8.0 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $116.2 million.
See “Liquidity and Capital Resources” for a discussion of our available capital resources and our need for financing. Our net loss from operations before interest and other expenses were $9.9 million and $7.0 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $131.0 million.
Through December 31, 2022, there have been no such impairment losses. 63 Accounting for Warrants We determine the accounting classification of warrants we issue, as either liability or equity, by first assessing whether the warrants meet liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity , then in accordance with ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock .
Accounting for Warrants We determine the accounting classification of warrants we issue, as either liability or equity, by first assessing whether the warrants meet liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity , then in accordance with ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock .
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described throughout this filing, particularly in “Risk Factors.” Emerging Growth Company Status The Jumpstart our Business Startups Act of 2012 (“JOBS Act”) permits an “emerging growth company” such as AgeX to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies.
See “IMPORTANT PRELIMINARY NOTE — Planned Merger with Serina Therapeutics, Inc. and Related Transactions.” This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements, all of which are based on our current expectations not taking the Merger into account and will be affected by the Merger if it is consummated and by uncertainties and risks described throughout this filing, particularly in “Risk Factors.” Emerging Growth Company Status The Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) permits an “emerging growth company” such as AgeX to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies.
This election under the JOBS Act to not delay the adoption of new or revised accounting standards is irrevocable. Overview We are a biotechnology company focused on the development and commercialization of novel therapeutics targeting human aging and degenerative diseases.
However, we elected to comply with newly adopted or revised accounting standards when they become applicable to public. This election under the JOBS Act to not delay the adoption of new or revised accounting standards is irrevocable. Overview We are a biotechnology company focused on the development and commercialization of novel therapeutics targeting human aging and degenerative diseases.
As of December 31, 2022, we had net operating loss carryforwards of approximately $52.8 million for U.S. federal income tax purposes.
As of December 31, 2023, we had net operating loss carryforwards of approximately $59.7 million for U.S. federal income tax purposes.
These factors raise substantial doubt regarding our ability to continue as a going concern. See Note 5, Related Party Transactions to our consolidated financial statements included elsewhere in this Report for additional information about our loan agreements with Juvenescence.
These factors raise substantial doubt regarding our ability to continue as a going concern. See Note 5, Related Party Transactions , to our consolidated financial statements included elsewhere in this Report for additional information about our loan agreements with Juvenescence. We will need to raise additional capital in the near term to be able to meet our operating expenses.
Summary of Cash Flows The following table summarizes the major sources and uses of cash for the periods set forth below (in thousands): Year Ended December 31, 2022 2021 Net cash provided by (used in): Operating activities from continuing operations $ (5,939) $ (7,765) Operating activities from discontinued operations - (90) Investing activities from continuing operations - 716 Investing activities from discontinued operations - (50) Financing activities from continuing operations 6,000 7,496 Financing activities from discontinued operations - (250) Net change in cash, cash equivalents, and restricted cash $ 61 $ 57 70 Operating Activities Net loss attributable to us for the year ended December 31, 2022 amounted to $10.5 million.
Summary of Cash Flows The following table summarizes the major sources and uses of cash for the periods set forth below (in thousands): Year Ended December 31, 2023 2022 Net cash provided by (used in): Operating activities $ (7,800 ) $ (5,939 ) Investing activities (10,000 ) - Financing activities 17,500 6,000 Net change in cash, cash equivalents, and restricted cash $ (300 ) $ 61 Operating Activities Net loss attributable to us for the year ended December 31, 2023 amounted to $14.8 million.
Since the layoffs of mostly research personnel in April 2020, research and development work have been scaled back and contracted out to third party service providers within the newly imposed budgetary constraints under the 2020 Loan Agreement and Secured Note.
Since the layoffs of mostly research personnel in April 2020, research and development work have been scaled back and contracted out to third party service providers within the newly imposed budgetary constraints under our loan agreements and promissory notes for loans advanced to us by Juvenescence.
Liquidity and Capital Resources Operating Losses and Going Concern Considerations We have incurred operating losses and negative cash flows since inception and had an accumulated deficit of $116.2 million as of December 31, 2022. We expect to continue to incur operating losses and negative cash flows.
Liquidity and Capital Resources Operating Losses and Going Concern Considerations We have incurred operating losses and negative cash flows since inception and had an accumulated deficit of $131.0 million as of December 31, 2023. We expect to continue to incur operating losses and negative cash flows. We have been funding our operations with loans from Juvenescence.
As of December 31, 2022, we had research and development tax credit carryforwards for federal and state tax purposes of $0.9 million and $0.6 million, respectively. The federal tax credits expire between 2028 and 2042, while the state tax credits have no expiration date.
The state net operating losses expire in varying amounts between 2028 and 2043. As of December 31, 2023, we had research and development tax credit carryforwards for federal and state tax purposes of $0.7 million and $0.5 million, respectively. The federal tax credits expire between 2028 and 2043, while the state tax credits have no expiration date.
These factors and the impact of potential dilution through the issuance of shares of our common stock upon the conversion of the Juvenescence loans into AgeX common stock and the exercise of warrants issued or issuable to Juvenescence in connection with the loans made to us could make AgeX less attractive to new equity investors and could impair our ability to finance our operations or the operations of our subsidiaries unless Juvenescence agrees, in its discretion, to lend us funds.
Further, the extent of Juvenescence’s voting control over AgeX along with the amount and terms of AgeX’s indebtedness to Juvenescence and the impact of potential dilution through the issuance of shares of our common stock upon the conversion of the Juvenescence loans into common stock and the exercise of common stock purchase warrants issued to Juvenescence in connection with certain Juvenescence loans could make AgeX unattractive to new equity investors and could impair our ability to finance our operations or the operations of our subsidiaries unless Juvenescence agrees, in its discretion, to lend us additional funds.
Impairment of Long-Lived Assets Long-lived assets, including long-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable.
Amortization expense is computed using the straight-line method over the estimated useful lives of the assets, generally over 10 years. Impairment of Long-Lived Assets Long-lived assets, including long-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable.
Net cash used in operating activities from continuing operations during this period amounted to $5.9 million.
Net cash used in operating activities during this period amounted to $7.8 million.
We do not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. We are currently unaware of any tax issues under review.
Accordingly, no accrued interest and penalties related to unrecognized tax benefits have been recorded as of December 31, 2023 and 2022. We do not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. We are currently unaware of any tax issues under review.
Federal net operating losses generated on or prior to December 31, 2017, expire in varying amounts between 2028 and 2037, while federal net operating losses generated after December 31, 2017, carryforward indefinitely. The state net operating losses expire in varying amounts between 2028 and 2042.
As of December 31, 2023, we had net operating losses of approximately $19.8 million for California purposes. Federal net operating losses generated on or prior to December 31, 2017, expire in varying amounts between 2028 and 2037, while federal net operating losses generated after December 31, 2017, carryforward indefinitely.
Stock-based compensation expense for the years ended December 31, 2022 and 2021 consists of stock-based compensation under the Incentive Plan, and stock-based compensation of AgeX’s subsidiaries that have their own stock option plans. Our consolidated subsidiary ReCyte Therapeutics and our former subsidiary LifeMap Sciences had their own share-based compensation plans.
Stock-based compensation expense for the years ended December 31, 2023 and 2022 consists of stock-based compensation under the Incentive Plan, and stock-based compensation of AgeX’s subsidiaries that have their own stock option plans. None of our consolidated subsidiaries have granted stock options or other equity awards for the years ended December 31, 2023 and 2022.
However, notwithstanding those adjustments, based on our most recent projected cash flows, our cash and cash equivalents and potential additional loans that may become available to us from Juvenescence under the 2022 Secured Note, and the proceeds we may receive from the sale of additional shares of our common stock in “at-the-market” transactions through a Sales Agreement with Chardan as a sales agent, would not be sufficient to satisfy our anticipated operating and other funding requirements for the next twelve months from the date of filing of this Report.
However, notwithstanding those adjustments, based on our most recent projected cash flows, our cash and cash equivalents, the amount of the 2022 Secured Note line of credit available to us from Juvenescence would not be sufficient to satisfy our anticipated operating and other funding requirements for the next twelve months from the date of filing of this Report.
Long-Lived Intangible Assets Long-lived intangible assets, consisting primarily of acquired patents, acquired in-process research and development (“IPR&D”) with alternative future uses, patent applications, and licenses to use certain patents, are stated at acquired cost, less accumulated amortization. Amortization expense is computed using the straight-line method over the estimated useful lives of the assets, generally over 10 years.
UniverXome is expected, in connection with the planned Merger, to hold certain AgeX assets and assume AgeX indebtedness obligations to Juvenescence. 63 Long-Lived Intangible Assets Long-lived intangible assets, consisting primarily of acquired patents, acquired in-process research and development (“IPR&D”) with alternative future uses, patent applications, and licenses to use certain patents, are stated at acquired cost, less accumulated amortization.
Year Ended December 31, $ +Increase/ % +Increase/ 2022 2021 -Decrease -Decrease Research and development expenses $ 1,025 $ 1,456 $ -431 -29.6 % General and administrative expenses 5,971 6,708 -737 -11.0 % Research and Development Expenses Research and development expenses for the year ended December 31, 2022 decreased by more than $0.4 million to $1.0 million as compared to approximately $1.5 million in 2021.
Year Ended December 31, $ +Increase/ % +Increase/ 2023 2022 -Decrease -Decrease Research and development expenses $ 734 $ 1,025 $ -291 -28.4 % General and administrative expenses 9,328 5,971 +3,357 +56.2% Research and Development Expenses Research and development expenses for the year ended December 31, 2023 decreased by approximately $0.3 million to $0.7 million as compared to approximately $1.0 million in 2022.
Our judgments, estimates and projections regarding future taxable income may change over time due to changes, among other factors, in market conditions, changes in tax laws, and tax planning strategies. If our assumptions and consequently our estimates change in the future, the valuation allowance may be increased or decreased, which may have a material impact on our consolidated financial statements.
Our judgments, estimates and projections regarding future taxable income may change over time due to changes, among other factors, in market conditions, changes in tax laws, and tax planning strategies.
Accordingly, the historical amounts of expense presented and discussed in this Report are likely not going to be indicative of expenses during future periods. 67 Results of Operations The following comparisons exclude the impact of the operations of LifeMap Sciences which have been presented in our consolidated financial results as discontinued operations.
Accordingly, the historical amounts of expense presented and discussed in this Report are likely not going to be indicative of expenses during future periods.
General and Administrative General and administrative expenses include employee and director compensation allocated to general and administrative expenses, consulting fees other than those paid for science-related consulting, license fees paid to third parties to acquire patents or licenses to use patents and other technology, professional fees to maintain patents and trademarks, minimum annual royalties stipulated under license and sublicense agreements with third parties, insurance costs allocated to general and administrative expenses, stock exchange-related costs, depreciation expense, marketing costs, legal and accounting costs, office rent, and other miscellaneous expenses which are allocated to general and administrative expense.
General and administrative expenses include employee and director compensation allocated to general and administrative expenses, consulting fees other than those paid for science-related consulting, facilities and equipment rent and maintenance related expenses, insurance costs allocated to general and administrative expenses, stock exchange-related costs, depreciation expense, marketing costs, legal and accounting costs, and other miscellaneous expenses which are allocated to general and administrative expense.
The loans from Juvenescence prohibit us and our subsidiaries ReCyte Therapeutics and Reverse Bio from borrowing funds from other lenders or engaging in certain other transactions without the consent of Juvenescence unless we repay all amounts owed to Juvenescence, except that Reverse Bio may borrow fund through convertible debt and the borrowing restrictions will lapse as to Reverse Bio if it raises more than $15 million in debt or equity capital by May 15, 2023.
The loans from Juvenescence that remain outstanding prohibit us and our subsidiaries ReCyte and Reverse Bio from borrowing funds from other lenders or engaging in certain other transactions without the consent of Juvenescence unless we repay all amounts owed to Juvenescence.
AgeX has granted Juvenescence a security interest and lien on substantially all of AgeX’s assets to secure AgeX’s obligations for the Secured Note and $10 Million Secured Note loans.
AgeX and three of its subsidiaries have granted Juvenescence a security interest and lien on substantially all of their assets to secure AgeX’s obligations for the loans from Juvenescence that remain outstanding and any additional loans that may be advanced under the 2022 Secured Note.
We provided a reserve against our federal and California research and development credits generated. The carryforward amounts for these credits have been reported net of these reserves. Accordingly, no accrued interest and penalties related to unrecognized tax benefits have been recorded as of December 31, 2022 and 2021.
For those benefits to be recognized, a tax position must be more-likely-than-not sustainable upon examination by taxing authorities. We provided a reserve against our federal and California research and development credits generated. The carryforward amounts for these credits have been reported net of these reserves.
During the year ended December 31, 2022, we did not recognize any grant revenues as we had expended the full amount available under the NIH grant as of December 31, 2021. During the years ended December 31, 2022 and 2021, we recognized $34,000 and $40,000, respectively, from the sale of research products.
During the years ended December 31, 2023 and 2022, we recognized $65,000 and $34,000, respectively, from the sale of research products.
We expect to continue to incur operating losses and negative cash flows for the foreseeable future. 62 Critical Accounting Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), requires management to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and related notes.
The following discussion and analysis of AgeX’s financial condition and results of operations and liquidity and capital resources does not reflect material changes to AgeX’s business, assets, liabilities, financial condition, operations, management, liquidity, capital resources, and prospects that will occur if the Merger is consummated. 62 Critical Accounting Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), requires management to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and related notes.
The difference between the net loss attributable to us and net cash used in operating activities from continuing operations during the year ended December 31, 2022 was primarily attributable to $3.3 million in amortization of intangible assets and deferred debt issuance costs, $1.1 million net change in working capital from operating activities, $0.8 million in stock-based compensation expense, $0.2 million loss on change in fair value of warrants, and more than $0.2 million in related party payables.
The difference between the net loss attributable to us and net cash used in operating activities during the year ended December 31, 2023 was primarily attributable to $5.4 million in amortization of intangible assets and deferred debt issuance costs, $1.5 million in prepaid expenses and other current assets which included a $0.4 million write off of prepaid expenses incurred in prior periods with respect to a shelf registration statement that expired in January 2024, $1.1 million in accounts payables and accrued liabilities, $0.6 million in stock-based compensation expense, and $0.1 million in net related party payables.
These amounts were offset to some extent by $1.0 million of financed insurance premiums and $0.1 million in net loss attributable to noncontrolling interest. See Notes 5, Related Party Transactions and 6, Warrant Liability to our consolidated financial statements included elsewhere in this Report for additional information about our loan agreements with Juvenescence and liability classified warrants.
See Notes 4, Convertible Note Receivable and 5, Related Party Transactions , to our consolidated financial statements included elsewhere in this Report for additional information about our loan agreement with Serina and our loan agreements with Juvenescence.
The net decrease was primarily attributable to decreases of: $0.2 million in scientific consulting; $0.1 million in outside research and services expenses; $0.1 million in fees incurred related to sponsored research agreement with a university; and $0.1 million in cash and noncash stock-based compensation expense to employees.
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.
These historical financial statements may not be indicative of our future performance.
These historical financial statements may not be indicative of our future performance. In particular, our future business focus and operations will be substantially different than our historical business focus and operations if the Merger is consummated.
See Notes 5, Related Party Transactions and 6, Warrant Liability to our consolidated financial statements included elsewhere in this Report for additional information about our loan agreements with Juvenescence and liability classified warrants. 68 Income Taxes Beginning in 2018, the 2017 Tax Act subjects a U.S. stockholder to tax on Global Intangible Low Tax Income “GILTI” earned by certain foreign subsidiaries.
See Notes 4, Convertible Note Receivable , 5, Related Party Transactions , 6, Warrant Liability , and 7, Stockholders’ Equity/(Deficit) to our consolidated financial statements included elsewhere in this Report for additional information about our loan agreement with Serina, loan agreements with Juvenescence, liability classified warrants, and debt exchanged for preferred stock. 67 Income Taxes For the year ended December 31, 2023, we experienced a loss; therefore, no income tax provision was recorded for the year ended December 31, 2023.
The guidance also prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not sustainable upon examination by taxing authorities.
If our assumptions and consequently our estimates change in the future, the valuation allowance may be increased or decreased, which may have a material impact on our consolidated financial statements. 65 The guidance also prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.
The net decrease is attributable to decreases of $0.4 million in consulting expenses, $0.2 million in professional fees for legal services, $0.2 million in annual minimum royalties due under license agreements and patent and license maintenance related fees and $0.1 million in noncash stock-based compensation expense to directors.
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.
Principles of Consolidation AgeX’s consolidated financial statements include the accounts of its subsidiaries and certain research and development departments.
Principles of Consolidation The consolidated financial statements include the accounts of AgeX and its subsidiaries in which AgeX has a controlling financial interest. The consolidated financial statements also include certain variable interest entities in which AgeX is the primary beneficiary (as described in more detail below).
AgeX consolidated its direct and indirect wholly-owned or majority-owned subsidiaries because AgeX has the ability to control their operating and financial decisions and policies through its ownership, and the noncontrolling interest is reflected as a separate element of stockholders’ deficit on AgeX’s consolidated balance sheets.
For consolidated entities where AgeX has less than 100% of ownership, AgeX records net loss attributable to noncontrolling interest on the consolidated statement of operations equal to the percentage of the ownership interest retained in such entities by the respective noncontrolling parties. The noncontrolling interest is reflected as a separate element of stockholders’ equity/(deficit) on AgeX’s consolidated balance sheets.
Removed
However, we elected to comply with newly adopted or revised accounting standards when they become applicable to public companies because our financial statements were consolidated with those of Lineage, which is not an emerging growth company under the JOBS Act and is therefore not permitted to delay the adoption of new or revised accounting standards that become applicable to public companies.
Added
We expect to continue to incur operating losses and negative cash flows for the foreseeable future.
Removed
AgeX’s consolidated balance sheets at December 31, 2022 and 2021 do not include LifeMap Sciences’ consolidated assets and liabilities due to the deconsolidation of LifeMap Sciences on March 15, 2021.
Added
Any material intercompany transactions and balances have been eliminated upon consolidation. AgeX assesses whether it is the primary beneficiary of a variable interest entity (“VIE”) at the inception of the arrangement and at each reporting date.
Removed
AgeX’s consolidated statements of operations for the year ended December 31, 2021 include LifeMap Sciences’ consolidated results for the period through March 15, 2021 rather than the day immediately preceding the deconsolidation due to the conversion of $1,761,296 of LifeMap Sciences’ indebtedness to AgeX into shares of LifeMap Sciences common stock on March 15, 2021, followed by the completion of the cash-out merger on the same day.
Added
This assessment is based on its power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and AgeX’s obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.
Removed
For share-based compensation awards granted by those privately-held consolidated subsidiaries under their respective equity plans, we determined the fair value of the options granted under those plans using similar methodologies and assumptions we used for our stock options discussed above.
Added
If the entity is within the scope of the variable interest model and meets the definition of a VIE, AgeX considers whether it must consolidate the VIE or provide additional disclosures regarding its involvement with the VIE. If AgeX determines that it is the primary beneficiary of the VIE, AgeX will consolidate the VIE.
Removed
None of our consolidated subsidiaries have granted stock options or other equity awards for the years ended December 31, 2022 and 2021.
Added
This analysis is performed at the initial investment in the entity or upon any reconsideration event. For entities AgeX holds as an equity investment that are not consolidated under the VIE model, AgeX will consider whether its investment constitutes a controlling financial interest in the entity and therefore should be considered for consolidation under the voting interest model.
Removed
Revenue Recognition We recognize revenue in a manner that depicts the transfer of control of a product or a service to a customer and reflects the amount of the consideration it expects to receive in exchange for such product or service.
Added
AgeX has four subsidiaries, Reverse Bio, ReCyte Therapeutics, Inc. (“ReCyte”), NeuroAirmid Therapeutics, Inc. (“NeuroAirmid”), Canaria Transaction Corporation (“Merger Sub”), and has incorporated but not yet capitalized a fifth subsidiary UniverXome Bioengineering, Inc.(“UniverXome”). Reverse Bio is a wholly owned subsidiary of AgeX through which AgeX plans to finance its iTR TM research and development efforts.
Removed
In doing so, we follow a five-step approach: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) the customer obtains control of the product or service.
Added
AgeX has been seeking equity financing for Reverse Bio and to the extent that such Reverse Bio financing is obtained through the sale of capital stock or other equity securities by Reverse Bio, AgeX’s equity interest in Reverse Bio and its iTR TM business would be diluted.
Removed
We consider the terms of a contract and all relevant facts and circumstances when applying the revenue recognition standard.
Added
ReCyte is an early stage pre-clinical research and development company involved in stem cell-derived endothelial and cardiovascular related progenitor cells for the treatment of vascular disorders and ischemic conditions. AgeX owns 94.8% of the outstanding capital stock of ReCyte.
Removed
We apply the revenue recognition standard, including the use of any practical expedients, consistently to contracts with similar characteristics and in similar circumstances. 65 Subscription and advertisement revenues – LifeMap Sciences sold subscription-based products, including research databases and software tools, for biomedical, gene, and disease research.
Added
NeuroAirmid is jointly owned by AgeX with the University of California – Irvine and certain researchers and was recently organized to pursue clinical development and commercialization of cell therapies, focusing initially on Huntington’s Disease. AgeX owns 50% of the outstanding capital stock of NeuroAirmid.
Removed
LifeMap Sciences sold these subscriptions primarily through the internet to biotech and pharmaceutical companies worldwide. LifeMap Sciences’ principal subscription product was the GeneCards ® Suite, which includes the GeneCards ® human gene database, and the MalaCards™ human disease database.
Added
AgeX consolidates NeuroAirmid despite not having majority ownership interest as it has the ability to influence decision making and financial results through contractual rights and obligations as per Accounting Standards Codification (“ASC”) 810, Consolidation . Merger Sub was incorporated for the purpose of merging with Serina to implement the Merger.
Removed
LifeMap Sciences’ performance obligations for subscriptions included a license of intellectual property related to its genetic information packages and premium genetic information tools.
Added
As of December 31, 2023, there have been no such impairment losses.
Removed
These licenses were deemed functional licenses that provide customers with a “right to access” to LifeMap Sciences’ intellectual property during the subscription period and, accordingly, revenue was recognized over a period of time, which was generally the subscription period.
Added
Year Ended December 31, $ +Increase/ % +Increase/ 2023 2022 -Decrease -Decrease Grant revenues $ 77 $ - $ +77 * % Other revenues 65 34 +31 * % Total revenues 142 34 +108 * % Cost of sales (40 ) (13 ) +27 * % Gross profit $ 102 $ 21 $ +81 * % *% fluctuation is not meaningful.
Removed
Payments were typically received at the beginning of a subscription period and revenue was recognized according to the type of subscription sold. For subscription contracts in which the subscription term commenced before a payment was due, LifeMap Sciences recorded an account receivable because the subscription was earned over time and billed the customer according to the contract terms.
Added
During the year ended December 31, 2023, we recognized income of approximately $77,000 from a grant awarded by the NIH in August 2023 with a one year grant period that commenced on September 1, 2023. During the year ended December 31, 2022, we did not recognize any grant revenues.
Removed
LifeMap Sciences deferred subscription revenues primarily represented subscriptions for which cash payment was received for the subscription term, but the subscription term was not completed as of the balance sheet date reported. LifeMap Sciences licensed from third parties the databases and software it commercializes and had a contractual obligation to pay royalties to the licensor on subscriptions sold.
Added
Year Ended December 31, $ +Increase/ % +Increase/ 2023 2022 -Decrease -Decrease iTR TM technology: AGEX-iTR1547 and AGEX-iTR1550 $ 166 $ 344 $ -178 -51.7 % PureStem® progenitor cell lines, brown adipose fat, neural stem cells (NSC), exosomes, and related research and development: AGEX-BAT1 and cGMP PSC-derived cells including NSC 568 681 -113 -16.6 % Total $ 734 $ 1,025 General and Administrative Expenses General and administrative expenses for the year ended December 31, 2023 increased by $3.3 million to $9.3 million as compared to $6.0 million in 2022.

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Other SER 10-K year-over-year comparisons