AgeX Therapeutics Reports Third Quarter 2020 Financial Results and Provides Business Update – Business Wire

ALAMEDA, Calif.--(BUSINESS WIRE)--AgeX Therapeutics, Inc. (AgeX; NYSE American: AGE), a biotechnology company developing innovative regenerative therapeutics to treat human diseases to increase healthspan and combat the effects of aging, reported financial and operating results for the third quarter ended September 30, 2020.

Q3 Highlights

This quarter, we continued to build upon our licensing and collaboration model through our new agreement with ImStem that provides us an avenue for participating financially in potential treatments for COVID-19 and acute respiratory distress syndrome or ARDS. Since the first of the year, AgeX has entered into six agreements that could lead to the development of new cell therapies by our licensees and collaborators, which utilize our core technologies and cell lines with potential future income streams to AgeX, said Greg Bailey M.D., Chairman of AgeX. In addition, expansion of our agreement related to ESI clinical-grade pluripotent stem cell lines will now allow us independence to build ESI cell lines as a to-go-to source for deriving cell based therapeutics across the industry.

Liquidity and Capital Resources

AgeX is in need of additional capital to finance its operations. On March 30, 2020, AgeX entered into a Secured Convertible Facility Agreement (the New Loan Agreement) with Juvenescence Limited pursuant to which AgeX may borrow funds from time to time. As of November 16, 2020, AgeX has borrowed $5.5 million and may draw additional funds from time to time subject to Juvenescences discretion, prior to the contractual repayment date on March 30, 2023. AgeX may not draw down more than $1.0 million in any single draw. More information about the New Loan Agreement can be found in AgeXs Annual Report on Form 10-K and Quarterly Reports on Form 10-Q for the periods ended March 31, 2020, June 30, 2020, and September 30, 2020 filed with the Securities and Exchange Commission on March 30, 2020, May 14, 2020, August 14, 2020, and November 16, 2020, respectively.

Going Concern Considerations

As required under Accounting Standards Update 2014-15, Presentation of Financial Statements-Going Concern (ASC 205-40), AgeX evaluates whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date its financial statements are issued. Based on AgeXs most recent projected cash flows, and considering that loans from Juvenescence under the New Loan Agreement will be subject to Juvenescences discretion, AgeX believes that its cash and cash equivalents, the remaining $2.5 million available under the New Loan Agreement and reduction in staff in May 2020 would not be sufficient to satisfy its anticipated operating and other funding requirements for the twelve months following the filing of AgeXs Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2020. These factors raise substantial doubt regarding the ability of AgeX to continue as a going concern.

Third Quarter 2020 Operating Results

Revenues: Total revenues for the third quarter of 2020 were $434,000 as compared with $411,000 for the third quarter of 2019. AgeX revenues are primarily generated from subscription and advertising revenues from the GeneCards online database through its subsidiary LifeMap Sciences, Inc. Revenues in 2020 also included approximately $40,000 of allowable expenses under AgeXs research grant from the NIH. Revenues from that grant were $41,000 in the same period in 2019.

Operating expenses: Operating expenses for the three months ended September 30, 2020 were $2.8 million as compared to $3.6 million for the same period in 2019. Operating expenses are comprised of research and development expense and general and administrative expenses. On an as-adjusted basis, operating expenses for the three months ended September 30, 2020 were $2.3 million as compared to $3.0 million for the same period in 2019.

The reconciliation between GAAP and non-GAAP operating expenses is provided in the financial tables included with this earnings release.

Research and development expenses were $0.8 million during the three months ended September 30, 2020, a $0.6 million decrease from $1.4 million during the same period in 2019. The decrease was primarily attributable to the layoff of 11 research and development personnel in May 2020 and the elimination of shared services payments to Lineage Cell Therapeutics, Inc. (Lineage) with the termination of our Shared Facilities and Services Agreement on September 30, 2019.

General and administrative expenses decreased by $0.3 million to $1.9 million during the three months ended September 30, 2020 from $2.2 million during the same period in 2019 despite an increase in head count resulting from the employment of AgeXs own finance team commencing in October 1, 2019. These increases were offset by a decrease in noncash stock-based compensation expense, travel and related expenses with the shelter in place mandates since March 15, 2020 resulting from the COVID-19 pandemic, and the elimination of shared facilities and services fees from Lineage following the termination of the Shared Facilities and Services Agreement on September 30, 2019.

About AgeX Therapeutics

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

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

Forward-Looking Statements

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

AGEX THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PAR VALUE AMOUNTS)

September 30,2020

December 31,2019

(Unaudited)

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

1,107

$

2,352

Accounts and grants receivable, net

241

363

Prepaid expenses and other current assets

581

1,339

Total current assets

1,929

4,054

Property and equipment, net

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AgeX Therapeutics Reports Third Quarter 2020 Financial Results and Provides Business Update - Business Wire