Serina Therapeutics Inc
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
SER$1.38-16.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001493152-24-030988
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001708599-24-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 63 previous paragraphs and 109 current paragraphs.
35 unchanged; 19 reworded; 51 added; 9 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 9 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (51)
Current report
The following discussion includes forward-looking statements. See “Forward-Looking Statements,” above. Forward-looking statements are not guarantees of future performance and our actual results may differ materially from those currently anticipated and from historical results depending upon a variety of factors, including, but not limited to, those discussed in Part I, Item 1A. Risk Factors of our April 1 Form 8-K, and in our subsequent filings with the SEC, including any discussed in Part II, Item 1A of this report under the heading “Risk Factors.”
Current report
All information presented in this report is based on our fiscal year. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years ending December 31 and the associated quarters, months and periods of those fiscal years.
Current report
Overview
Current report
We are a clinical-stage biotechnology company developing a pipeline of wholly owned drug product candidates to treat neurological diseases and pain. Our POZ drug delivery technology is designed to enable certain existing drugs and novel drug candidates to be modified in a way that may provide an increase in efficacy and safety of the resulting polymeric drug conjugate. Our proprietary POZ technology is based on a synthetic, water soluble, low viscosity polymer called poly(2-oxazoline). Our POZ technology is engineered to provide greater control in drug loading and more precision in the rate of release of attached drugs delivered via subcutaneous injection. The therapeutic agents in our product candidates are typically well-understood and marketed drugs that are effective but are limited by pharmacokinetic profiles that can include toxicity, side effects and short half-life. We believe that by using POZ technology, drugs with narrow therapeutic windows can be designed to maintain more desirable and stable levels in the blood.
Current report
On March 26, 2024, we completed the Merger, pursuant to which Merger Sub merged with and into Legacy Serina, with Legacy Serina surviving as our wholly owned subsidiary. Additionally, on March 26, 2024, we changed our name to “Serina Therapeutics, Inc.” See the Explanatory Note included elsewhere in this Report for additional information regarding completion of the Merger.
Current report
Our operations through September 30, 2024, have been financed primarily by aggregate net proceeds of $51.9 million from the issuance of convertible preferred stock and convertible notes and exercise of Post-Merger Warrants to purchase our common shares by Juvenescence. Since our inception in 2006, we have had significant operating losses. Our operating loss was $11.5 million and $3.4 million for nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $13.8 million and $3.2 million in cash and cash equivalents.
Current report
Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our accounts payable and accrued expenses. We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. In particular, we expect our expenses to increase as we continue our development of, and seek regulatory approvals for, our product candidates, as well as hire additional personnel, pay fees to outside consultants, attorneys, and accountants, and, incur other increased costs associated with being a public company. In addition, if and when we seek and obtain regulatory approval to commercialize any product candidate, we will also incur increased expenses in connection with commercialization and marketing of any such product. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical trials and our expenditures on other research and development activities. We anticipate that our expenses will increase significantly in connection with our ongoing activities as we:
Current report
•advance our lead product candidate, SER 252 into Phase I clinical trials;
Current report
•advance our other product candidates;
Current report
•advance our preclinical programs to clinical trials;
Current report
•further invest in our pipeline;
Current report
•seek regulatory approval for our investigational medicines;
Current report
•maintain, expand, protect, and defend our intellectual property portfolio;
Current report
•secure facilities to support continued growth in our research, development, and commercialization efforts; and
Current report
•increase our headcount to support our development efforts and to expand our clinical development team.
Current report
Grant Revenues
Current report
Our grants and contracts reimburse us for direct and indirect costs relating to the grant projects and also provide us with a pre-negotiated profit margin on total direct and indirect costs of the grant award, excluding subcontractor costs, after giving effect to directly attributable costs and allowable overhead costs. Funds received from grants and contracts are generally deemed to be earned and recognized as revenue as allowable costs are incurred during the grant or contract period and the right to payment is realized.
Current report
•expenses incurred under agreements with consultants and contract organizations that conduct research and development activities on our behalf;
Current report
•costs related to production of preclinical and clinical materials, including fees paid to contract manufacturers;
Current report
•laboratory and vendor expenses related to the execution of preclinical studies and planned clinical trials; and
Current report
•laboratory supplies and equipment used for internal research and development activities.
Current report
•successful completion of preclinical studies and initiation of clinical trials for future product candidates;
Current report
•successful enrollment and completion of clinical trials for our current product candidates;
Current report
•data from our clinical programs that support an acceptable risk benefit profile of our product candidates in the intended patient populations; acceptance by the U.S. Food and Drug Administration, or FDA, or other applicable regulatory agencies of the Investigational New Drug, or IND, applications, clinical trial applications and/or other regulatory filings for SER 252 and other product candidates.
Current report
•expansion and maintenance of a workforce of experienced scientists and others to continue to develop our product candidates;
Current report
•successful application for and receipt of marketing approvals from applicable regulatory authorities;
Current report
•obtainment and maintenance of intellectual property protection and regulatory exclusivity for our product candidates;
Current report
•making of arrangements with contract manufacturing organizations for, or establishment of, commercial manufacturing capabilities;
Current report
•establishment of sales, marketing and distribution capabilities and successful launch of commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others;
Current report
•acceptance of our product candidates, if and when approved, by patients, the medical community and third party payors;
Current report
•effective competition with other therapies;
Current report
•obtainment and maintenance of coverage, adequate pricing, and adequate reimbursement from third party payors, including government payors;
Current report
•maintenance, enforcement, defense, and protection of our rights in our intellectual property portfolio;
Current report
•avoidance of infringement, misappropriation, or other violations with respect to others’ intellectual property or proprietary rights; and
Current report
•maintenance of a continued acceptable safety profile of our products following receipt of any marketing approvals.
Current report
General and administrative expenses were $2.9 million for the three months ended September 30, 2024, compared to $0.9 million for the same period in 2023. The increase of $2.0 million is due primarily to increases of (1) $0.9 million of stock based compensation expenses as a result of new directors and new hire option grants, (2) $0.5 million of consulting expenses to assist with the implementation of new platforms and software, (3) a non-recurring $0.3 million severance expense (4) $0.2 million in compensation and related expenses as a result of increased headcount (5) $0.2 million in directors and officers insurance, and (6) $0.2 million in miscellaneous expenses that were individually insignificant. These expenses were offset by a decrease of $0.3 million in professional legal and accounting services incurred largely in connection with the Merger which consummated on March 26, 2024.
Current report
Other income, net
Current report
Other income, net was $6.7 million for the three months ended September 30, 2024, compared to $3.2 million for the same period in 2023. The increase of $3.5 million is primarily attributable to an increase of $6.1 million in the gain from the change in fair value of liability classified Merger Warrants during three months ended September 30, 2024 compared to the same period in 2023. This aggregate increase was offset by the loss in the fair value of the Legacy Serina Convertible Notes and the AgeX-Serina Note of $2.6 million.
Current report
•the progress, costs and results of IND enabling studies for our lead product candidate SER 252 and our potential future clinical trials for SER 252;
Current report
•the scope, progress, results and costs of discovery research, preclinical development, laboratory testing and clinical trials for our other product candidates;
Showing the first 40 of 51 passages. Open the source sections for the rest.
Removed paragraphs (9)
Previous report
The matters addressed in this Item 2 that are not historical information constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements about any of the following: any projections of earnings, revenue, cash, effective tax rate, use of net operating losses, or any other financial items; the plans, strategies and objectives of management for future operations or prospects for achieving such plans, and any statements of assumptions underlying any of the foregoing. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” and similar expressions are intended to identify forward-looking statements. While the Company may elect to update forward-looking statements in the future, it specifically disclaims any obligation to do so, even if the Company’s estimates change and readers should not rely on those forward-looking statements as representing the Company’s views as of any date subsequent to the date of the filing of this Report. Although we believe that the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to risks and the Company can give no assurances that its expectations will prove to be correct. Actual results could differ materially from those described in this report because of numerous factors, many of which are beyond the control of the Company. A number of important factors could cause the results of the company to differ materially from those indicated by such forward-looking statements, including those detailed under the heading “Risk Factors” in this Form 10-Q, the April 1 Form 8-K, our Form 10-K for the year ended December 31, 2023, and our other reports filed with the SEC from time to time.
Previous report
General and administrative expenses were $3.5 million for the six months ended June 30, 2024, compared to $1.1 million for the same period in 2023. The increase of $2.4 million is due primarily to increases of $1.1 million in professional legal and accounting services incurred largely in connection with the Merger which consummated on March 26, 2024, $0.6 million in director compensation and consulting services and stock based compensation expenses for options granted to directors and consultants allocable to general and administrative expenses, $0.3 million in market research and Company website development related expenses, $0.2 million in insurance expenses, $0.1 million in salaries and payroll related expenses allocable to general and administrative expenses, $0.1 million in recruiting and hiring expenses, $0.1 million in rent and facilities maintenance related expenses, and $0.1 million in investor and public relations related expenses. These expenses were offset to some extent by decreases of $0.1 million in database subscription fees and $0.1 million in miscellaneous expenses.
Previous report
Other income (expense), net
Previous report
The $7.3 million change in other income (expense), net to $9.04 million other income, net for the three months ended June 30, 2024 as compared to $1.75 million other income, net for the same period in 2023 is primarily attributable to: (1) change in fair value of liability classified Merger Warrants of $9.3 million gain during the three months ended June 30, 2024 as compared to nil in the same period in 2023 and (2) by the decrease in interest on the AgeX-Serina Note which amounted to nil during the three months ended June 30, 2024 as compared to $0.2 million in the same period in 2023. These changes are offset to some extent by the aggregate change in the fair value of the Legacy Serina Convertible Notes and the AgeX-Serina Note which amounted to nil for the three months ended June 30, 2024 as compared to $1.6 million gain in the same period in 2023, (2) the change in the fair value of Legacy Serina Series A-5 preferred stock warrants which was nil during the three months ended June 30, 2024 as compared to $0.3 million for the same period in 2023, and (3) increase in amortization of deferred debt issuance costs related to the 2022 Secured Note which amounted to $0.3 during the three months ended June 30, 2024 as compared to nil in the same period in 2023.
Previous report
Income taxes
Previous report
Due to losses incurred for thethree and six months ended June, 30, 2024 and 2023, we did not record a provision or benefit for income taxes. A valuation allowance will be provided when it is more likely than not that some portion of the deferred tax assets will not be realized. We established a full valuation allowance for all deferred tax assets for the periods presented due to the uncertainty of realizing future tax benefits from our net operating loss carryforwards and other deferred tax assets.
Previous report
For years beginning after December 31, 2021, the 2017 Tax Act requires companies to capitalize their research and experimentation expenditures as defined under Section 174 and amortize those expenditures on a straight-line bases over a period of 5 years for research activities performed in the United States. Previously the Company was able to immediately expense such costs. It is possible that Congress will defer or eliminate the ultimate implementation of this provision. The Company has sufficient federal net operating loss carryforwards to offset the impact of this provision.
Previous report
Going Concern
Previous report
Our evaluation of our ability to continue as a going concern requires us to evaluate our future sources and uses of cash sufficient to fund our currently expected operations in conducting research and development activities during the twelve month period following the filing of this Report. In making our going concern determination, we evaluate the probability associated with each source and use of cash resources, taking into account the uncertainty of progress and costs associated with developing our planned pharmaceutical products.
Reworded paragraphs (19)
Previous wording
You should read the following discussion and analysis of Serina’s financial condition and results of operations together with the “Unaudited Pro Forma Condensed Combined Financial Information” attached as Exhibit 99.3, and Serina’s audited consolidated financial statements and related notes for the years ended December 31, 2023 and 2022, attached as Exhibit 99.2, to Serina’s Current Report on Form 8-K filed with the SEC on April 1, 2024 (the “April 1 Form 8-K”). Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section titled “Risk Factors” incorporated by reference in the April 1 Form 8-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the section titled “Risk Factors” incorporated by reference in the April 1 Form 8-K to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.
Current wording
The following discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated interim financial statements and notes thereto included in this report and our “Unaudited Pro Forma Condensed Combined Financial Information” attached as Exhibit 99.3, and Serina’s audited consolidated financial statements and related notes for the years ended December 31, 2023 and 2022, attached as Exhibit 99.2, to Serina’s Current Report on Form 8-K filed with the SEC on April 1, 2024 (the “April 1 Form 8-K”). Past operating results are not necessarily indicative of results that may occur in future periods.
Previous wording
The following discussion should be read in conjunction with the Company’s condensed consolidated interim financial statements and the related notes provided under “Item 1- Financial Statements” above.
Current wording
The following discussion should be read in conjunction with Note 1 in our unaudited condensed consolidated interim financial statements and the related notes above.
Previous wording
An accounting policy is deemed critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate are reasonably likely to occur, that could materially impact the financial statements. Management believes that there have been no significant changes during the six months ended June 30, 2024 to the items that we disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023, except as disclosed in Note 2,Basis of Presentation and Summary of Significant Accounting Policies, of our condensed consolidated interim financial statements included elsewhere in this Report.
Current wording
An accounting policy is deemed critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate are reasonably likely to occur, that could materially impact the financial statements. Management believes that there have been no significant changes during the nine months ended September 30, 2024 to the items that we disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report in the April 1 Form 8-K for the year ended December 31, 2023, except as disclosed in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, of our unaudited condensed consolidated interim financial statements included elsewhere in this Report.
Previous wording
Our other income is comprised of interest from cash equivalents and gain related to the change in fair value of embedded derivatives.
Current wording
Our other income is comprised of interest income on our cash equivalents, and changes in fair value of our convertible notes and liability-classified warrants.
Previous wording
Comparison of Three and Six Months Ended June 30, 2024 and 2023
Current wording
Comparison of Three and Nine Months Ended September 30, 2024 and 2023
Previous wording
Revenues for the three and six months ended June 30, 2024 and 2023 were not material.
Current wording
Revenues for the three and nine months ended September 30, 2024 and 2023 were not material.
Previous wording
Research and development expenses were $1.6 million for the three months ended June 30, 2024, compared to $0.5 million for the same period in 2023. The increase of $1.1 million is primarily due to a non-recurring $0.3 million severance expense, increases of $0.4 million in salaries and payroll related expenses and consulting services allocable to research and development expenses, $0.3 million in patent related professional fees primarily for the maintenance of certain patent and other intellectual property and biological material assets included in Legacy Assets, and $0.1 million in laboratory supplies and depreciation expenses allocable to research and development expenses.
Current wording
Research and development expenses were $2.4 million for the three months ended September 30, 2024, compared to $0.6 million for the same period in 2023. The increase of $1.8 million is primarily due to increases of $0.8 million in salaries and payroll related expenses due to increase in headcount, $0.5 million in professional fees for the maintenance of certain patent and other intellectual property and biological material assets included in Legacy Assets, and $0.5 million in outside research services and consultants for research programs.
Previous wording
Research and development expenses were $2.7 million for the six months ended June 30, 2024, compared to $0.9 million for the same period in 2023. The increase of $1.8 million is primarily due to a non-recurring $0.3 million severance expense, increases of $0.5 million in salaries and payroll related expenses and consulting services allocable to research and development expenses, $0.4 million in outside research and services allocable to research and development expenses, $0.4 million in patent related professional fees which includes $0.3 million related to the maintenance of certain patent and other intellectual property, and biological material assets included in Legacy Assets, $0.1 million in depreciation expense and amortization of intangible assets allocable to research and development expenses, and $0.1 million in laboratory supplies and expenses.
Current wording
Research and development expenses were $5.1 million for the nine months ended September 30, 2024, compared to $1.5 million for the same period in 2023. The increase of $3.6 million is primarily due to increase of (1) $1.2 million in salaries and payroll related expenses due to increase in headcount, (2) $0.9 million in professional fees related to the maintenance of certain patent and other intellectual property, and biological material assets included in Legacy Assets (3) $0.9 million in outside research services and consultants for research programs, (4) $0.3 million in severance expense and (5) $0.3 million increase in other miscellaneous expenses including facility, laboratory and depreciation.
Previous wording
See Notes 1,Organization, Business Overview and Liquidity and 5,Related Party Transactions to our condensed consolidated interim financial statements included elsewhere in this Report for additional information about the Legacy Assets.
Current wording
See Notes 1, Organization, Business Overview and Liquidity and 5, Related Party Transactions to our unaudited condensed consolidated interim financial statements included elsewhere in this Report for additional information about the Legacy Assets.
Previous wording
General and administrative expenses were $2.3 million for the three months ended June 30, 2024, compared to $0.5 million for the same period in 2023. The increase of $1.8 million is due primarily to increases by $0.6 million in professional legal and accounting services incurred largely in connection with the Merger which consummated on March 26, 2024, $0.5 million in director compensation and consulting services and stock based compensation expenses for options granted to directors and consultants allocable to general and administrative expenses, $0.2 million in insurance expenses, $0.2 million in market research and Company website development related expenses, $0.1 million in salaries and payroll related expenses allocable to general and administrative expenses, $0.1 million in recruiting and hiring expenses, $0.1 million in rent and facilities maintenance related expenses, and $0.1 million in investor and public relations related expenses. These expenses were offset to some extent by a $0.1 million decrease in miscellaneous expenses.
Current wording
General and administrative expenses were $6.5 million for the nine months ended September 30, 2024, compared to $2.0 million for the same period in 2023. The increase of $4.5 million is due primarily to increases of (1) $1.2 million of stock based compensation expenses as a result of new directors grant and new hire option grants (2) $0.8 million of consulting expenses to assist with the implementation of new platforms and software, (3) $0.5 million in salaries and payroll related expenses due to increased headcount (4) $0.4 million in directors and officers insurance (5) $0.9 million in professional legal and accounting services incurred largely in connection with the Merger which consummated on March 26, 2024, (6) $0.3 million severance expense, and (7) $0.3 million in market research and our website development related expenses.
Previous wording
The $8 million change in other income (expense), net to $3.7 million other expense, net for the six months ended June 30, 2024 as compared to $4.4 million other income, net for the same period in 2023 is primarily attributable to: (1) the aggregate change in the fair value of the Legacy Serina Convertible Notes and the AgeX-Serina Note which amounted to $7 million loss for the six months ended June 30, 2024 as compared to $1.9 million gain in the same period in 2023 and $2.2 million fair value gain recognized on the date of note inception in March 2023, (2) the change in the fair value of Legacy Serina Series A-5 preferred stock warrants which was nil during the six months ended June 30, 2024 as compared to $0.5 million for the same period in 2023, and (3) increase in amortization of deferred debt issuance costs related to the 2022 Secured Note which amounted to $329,000 during the three months ended June 30, 2024 as compared to nil in the same period in 2023. These changes are offset to some extent by the change in fair value of liability classified Merger Warrants of $3.7 million gain during the six months ended June 30, 2024 as compared to nil in the same period in 2023 and decrease in interest on the AgeX-Serina Note which amounted to $164,000 during the six months ended June 30, 2024 as compared to $205,000 in the same period in 2023.
Current wording
Other income, net was $3.0 million for the nine months ended September 30, 2024 as compared to $7.6 million for the same period in 2023. The decrease of $4.6 million is primarily attributable to: (1) the aggregate change in the fair value of the Legacy Serina Convertible Notes and the AgeX-Serina Note which amounted to a $13.7 million loss (2) the increase in amortization of deferred debt issuance costs related to the 2022 Secured Note which amounted $0.1 million (3) offset to some extent by the change in fair value of liability classified Merger Warrants which amounted to a gain of $9.3 million.
Previous wording
See Note 5,Related Party Transactions to our condensed consolidated interim financial statements included elsewhere in this Report for additional information about the 2022 Secured Note. See Notes 6,Fair Value Measurements and 7,*Stockholders’ Equity/(Deficit)*to our condensed consolidated interim financial statements included elsewhere in this Report for additional information on fair value adjustments of convertible promissory notes, Legacy Serina warrants, liability classified Merger Warrants, and conversion of the AgeX-Serina Note upon consummation of the Merger on March 26, 2024.
Current wording
See Note 5, Related Party Transactions to our unaudited condensed consolidated interim financial statements included elsewhere in this Report for additional information about the 2022 Secured Note. See Notes 6, Fair Value Measurements and 7, Stockholders’ Equity/(Deficit)to our unaudited condensed consolidated interim financial statements included elsewhere in this Report for additional information on fair value adjustments of convertible promissory notes, Legacy Serina warrants, liability classified Merger Warrants, and conversion of the AgeX-Serina Note upon consummation of the Merger on March 26, 2024.
Previous wording
We had $6.1 million in cash and cash equivalents as of June 30, 2024. Our operations have been financed primarily by the issuance of common stock, convertible preferred stock, and convertible notes by AgeX and Serina prior to the Merger, and by $2.9 million drawn under the 2022 Secured Convertible Promissory Note (the “2022 Secured Note”) subsequent to consummation of the Merger. We have drawn down the entire amount of credit that was made available to us through the 2022 Secured Note. See Note 5,Related Party Transactionsto our condensed consolidated interim financial statements included elsewhere in this Report for additional information about the 2022 Secured Note. In addition, we received $4,987,818 from Juvenescence during June 2024 through the exercise of Post-Merger Warrants. Juvenescence has agreed to exercise the remaining Post-Merger Warrants it holds in accordance with the following schedule, which will provide us with $9,975,610 of additional funds.
Current wording
We had $3.2 million in cash and cash equivalents as of September 30, 2024. Our operations have been financed primarily by the issuance of common stock, convertible preferred stock, and convertible notes by AgeX and Serina prior to the Merger, and by $2.9 million drawn under the 2022 Secured Convertible Promissory Note (the “2022 Secured Note”) subsequent to consummation of the Merger. We have drawn down the entire amount of credit that was made available to us through the 2022 Secured Note. See Note 5, Related Party Transactionsto our unaudited condensed consolidated interim financial statements included elsewhere in this Report for additional information about the 2022 Secured Note. In addition, we received $5.0 million from Juvenescence during June 2024 through the exercise of Post-Merger Warrants. Juvenescence has agreed to exercise the remaining Post-Merger Warrants it holds in accordance with the following schedule, which will provide us with $10.0 million of additional funds.
Previous wording
Since inception, we have had significant operating losses and negative cash flows as of June 30, 2024 and had an accumulated deficit of $23.2 million. Our losses from operations, negative operating cash flows and accumulated deficit, as well as the additional capital needed to fund operations within one year of the audited consolidated financial statement issuance date, raise substantial doubt about our ability to continue as a going concern. We expect to incur substantial expenditures in the foreseeable future for the development of our product candidates and will require additional financing to continue this development. Our audited consolidated financial statements attached as Exhibit 99.2 to the April 1 Form 8-K have been prepared on a basis that assumes that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.
Current wording
Since inception, we have had significant operating losses and negative cash flows as of September 30, 2024 and had an accumulated deficit of $21.8 million. Our losses from operations, negative operating cash flows and accumulated deficit, as well as the additional capital needed to fund operations within one year of the issuance date of our unaudited condensed consolidated interim financial statements included in this Report, raise substantial doubt about our ability to continue as a going concern. If we do not receive the $10 million of cash proceeds expected from Juvenescence through the exercise of the Post-Merger Warrants pursuant to the terms of the Side Letter, there is substantial doubt about the Company’s ability to continue as a going concern. We expect to incur substantial expenditures in the foreseeable future for the development of our product candidates and will require additional financing to continue this development. Our unaudited condensed consolidated interim financial statements have been prepared on a basis that assumes that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.
Previous wording
Any product candidates we may develop may never achieve commercialization, and we anticipate that we will continue to incur losses for the foreseeable future. We expect that our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. As a result, until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings or other capital sources, including potential collaborations, licenses, and other similar arrangements. Our primary uses of capital are, and we expect will continue to be, costs related to pre-clinical and clinical research, clinical studies, manufacturing, and development services; compensation and related expenses; costs relating to the build out of our laboratories at our headquarters; license payments or milestone obligations that may arise; laboratory expenses and costs for related supplies; manufacturing costs; legal and other regulatory expenses and general overhead costs.
Current wording
Any product candidates we may develop may never achieve commercialization, and we anticipate that we will continue to incur losses for the foreseeable future. We expect that our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. Our primary uses of capital are, and we expect will continue to be, costs related to pre-clinical and clinical research, clinical studies, manufacturing, and development services; compensation and related expenses; costs relating to the build out of our laboratories at our headquarters; license payments or milestone obligations that may arise; laboratory expenses and costs for related supplies; manufacturing costs; legal and other regulatory expenses and general overhead costs.
Previous wording
We believe that our cash on hand, along with the $9,975,610 of cash proceeds expected to be received from Juvenescence through the exercise of the remaining Post-Merger Warrants it holds, as provided in the Side Letter, will not be sufficient to enable us to fund our operations through calendar year 2025 based on our current plan. To finance our operations beyond that point, we will need to raise additional capital, which cannot be assured. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in license other potential product candidates and to fund operations for the foreseeable future. We will continue to seek funds through equity offerings, debt financings or other capital sources, including potential collaborations, licenses, and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders, including investors in this offering, will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we will need to delay, reduce, or terminate planned activities to reduce costs.
Current wording
We believe that our cash on hand, along with the $10.0 million of cash proceeds expected to be received from Juvenescence through the exercise of the remaining Post-Merger Warrants it holds, as provided in the Side Letter, will not be sufficient to enable us to fund our operations through calendar year 2025 based on our current plan. To finance our operations beyond that point, we will need to raise additional capital, which cannot be assured. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in license other potential product candidates and to fund operations for the foreseeable future. We will continue to seek funds through equity offerings, debt financings or other capital sources, including potential collaborations, licenses, and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we will need to delay, reduce, or terminate planned activities to reduce costs.
Previous wording
Net loss attributable to Serina for the six months ended June 30, 2024 amounted to $9.8 million. Net cash used in operating activities during this period amounted to $9.6 million. The $0.2 million difference between the net loss attributable to Serina and net cash used in operating activities during the six months ended June 30, 2024 was primarily attributable to certain non-cash items, including changes in the fair value of convertible notes among other non-cash items totaling $4.3 million as well as a decrease in accrued interest on AgeX-Serina Note of approximately $0.2 million due to consummation of Merger on March 26, 2024. These changes were offset to some extent by changes of $2.7 million in prepaid expenses (comprised of $2 million in prepaid technology access fee and $0.7 million in other prepaid expenses), $1.4 million in accounts payable, and $0.2 million from the effect of net changes in operating lease liabilities and amount due to related party.
Current wording
Net loss for the nine months ended September 30, 2024 was $8.5 million. Net cash used in operating activities during this period amounted to $12.5 million. The $4.0 million difference between the net loss and net cash used in operating activities during the nine months ended September 30, 2024 was comprised of non-cash items, totaling $1.0 million and changes in operating assets and liabilities totaling $3.0 million. The net $1.0 million increase of non-cash items primarily consisted of a $10.4 million gain from the change in the fair value of warrants, offset by a $7.0 million loss from the change in fair value of convertible notes, $1.6 million in stock-based compensation, $0.3 million amortization of deferred debt issuance costs, $0.2 million decrease in accrued interest on the AgeX-Serina Note and $0.3 million in depreciation and non-cash lease expenses. The net $3.0 million cash used in operating assets and liabilities primarily consisted of a $2.4 million increase in prepaid expenses (comprised of $1.7 million in prepaid technology access fee and $0.7 million in other prepaid expenses and current assets), and a $0.7 million decrease in accounts payable.
Previous wording
Net cash used in investing activities during the six months ended June 30, 2024 of $14,000 is entirely related to purchases of office and laboratory equipment.
Current wording
Net cash used in investing activities during the nine months ended September 30, 2024 was immaterial and entirely related to purchases of office and laboratory equipment.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2024 of $8.1 million is primarily attributable to $5 million proceeds received from the exercise of 377,865 Post-Merger Warrants by Juvenescence, $2.9 million drawn under the credit facilities from Juvenescence and approximately $337,000 cash and restricted cash acquired in connection with the Merger. These changes were offset to some extent by $133,000 repayment of principal on loan facilities to Juvenescence and $26,000 repayment of financed leases. See Note 5,Related Party Transactions, to our condensed consolidated interim financial statements included elsewhere in this Report for additional information about our loan agreements with Juvenescence.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2024 of $8.2 million is primarily attributable to $5.0 million of proceeds received from the exercise of 377,865 Post-Merger Warrants by Juvenescence, $2.9 million drawn under the loan facilities from Juvenescence, $0.3 million cash and restricted cash acquired in connection with the Merger and $0.1 million from the exercise of stock options. These changes were offset to some extent by $0.1 million repayment of principal on loan facilities to Juvenescence. See Note 5, Related Party Transactions, to our condensed consolidated interim financial statements included elsewhere in this Report for additional information about our loan agreements with Juvenescence.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Our losses from operations, negative operating cash flows and accumulated deficit, as well as the additional capital needed to fund operations within one year of the unaudited condensed consolidated interim financial statements issuance date, raise substantial doubt about our ability to continue as a going concern. We expect to incur substantial expenditures in the foreseeable future for the development of our product candidates and will require additional financing to continue this development.
Current report — wording carried from elsewhere
We have not had any products approved for sale. We do not expect to generate any product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution. As a result, until such time, if ever, that we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including collaborations, licenses, or similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed or on favorable terms, if at all. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies, including our research and development activities. If we are unable to raise capital, we will need to delay, reduce, or terminate planned activities to reduce costs.
Current report — wording carried from elsewhere
•personnel costs, which include salaries, benefits and equity-based compensation expense;
Current report — wording carried from elsewhere
•the costs of operating as a public company