Serina Therapeutics, Inc.

Previous 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.

Current wording

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our audited consolidated financial statements for the years ended December 31, 2024 and 2023 in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 24, 2025. Past operating results are not necessarily indicative of results that may occur in future periods.

Previous wording

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 wording

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.

Previous wording

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 wording

We are a clinical-stage biotechnology company developing a pipeline of wholly owned drug product candidates to treat neurological diseases and other indications. Our POZ platform provides the potential to improve the integrated efficacy and safety profile of multiple modalities including small molecules, RNA-based therapeutics and antibody-based drug conjugates (ADCs). 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. 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.

Previous wording

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 wording

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.” .

Previous wording

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 wording

Our operations through March 31, 2025, have been financed primarily by aggregate net proceeds of $51.9 million from the issuance of convertible preferred stock, common 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 $5.9 million and $2.3 million for three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $49.1 million and $4.3 million in cash and cash equivalents.

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 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.

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 three months ended March 31, 2025 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 filed March 24, 2025 for the year ended December 31, 2024.

Previous wording

Our research and development expenses are not currently tracked on a program-by-program basis. We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying and developing product candidates and therefore have not implemented the systems and procedures to track research and development expenses on a program-by-program basis. We track research and development expenses based on the type of expense as further described below under “Results of Operations –Research and Development Expenses.” Substantially all our historical research and development costs were incurred on the development of our preclinical candidates and advancing research on our POZ lipid technology.

Current wording

Our research and development expenses are not currently tracked on a program-by-program basis. We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying and developing product candidates and therefore have not implemented the systems and procedures to track research and development expenses on a program-by-program basis. We track research and development expenses based on the type of expense as further described below under “Results of Operations –Research and Development Expenses.” Substantially all our historical research and development costs were incurred in the development of our preclinical candidates and advancing research on our POZ lipid technology.

Previous wording

•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 wording

•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 ("FDA") or other applicable regulatory agencies of the Investigational New Drug ("IND") applications, clinical trial applications and/or other regulatory filings for SER 252 and other product candidates.

Previous wording

Our general and administrative expenses consist primarily of personnel costs, including equity-based compensation, and other expenses for outside professional services, including legal, recruiting, audit and accounting, and facility related costs not otherwise included in research and development expenses. Personnel costs consist of salaries, benefits and equity-based compensation expense for our personnel in executive and other administrative functions. We expect our general and administrative expenses to increase over the next several years to support our continued research and development activities, manufacturing activities, increased costs of expanding our operations and operating as a public company. These increases will likely include increases related to the hiring of additional personnel and legal, regulatory, and other fees and services associated with maintaining compliance with the NYSE American Company Guide and Securities and Exchange Commission, or SEC, requirements, director and officer insurance costs, and investor relations costs associated with being a public company.

Current wording

Our general and administrative expenses consist primarily of personnel costs, and other expenses for outside professional services, including legal, recruiting, audit and accounting, and facility related costs not otherwise included in research and development expenses. Personnel costs consist of salaries, benefits and equity-based compensation expense for our personnel in executive and other administrative functions. We expect our general and administrative expenses to increase over the next several years to support our continued research and development activities, manufacturing activities, increased costs of expanding our operations and operating as a public company. These increases will likely include increases related to the hiring of additional personnel and legal, regulatory, and other fees and services associated with maintaining compliance with the New York Stock Exchange American Company Guide and SEC requirements, director and officer insurance costs, and investor relations costs associated with being a public company.

Previous 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.

Current wording

Our other income (expenses) are comprised of interest income on our cash equivalents and changes in fair value of our changes in fair value of our convertible notes and liability-classified warrants and interest accrued from the convertible notes.

Previous wording

Comparison of Three and Nine Months Ended September 30, 2024 and 2023

Current wording

Comparison of three months ended March 31, 2025 and 2024

Previous wording

Revenues for the three and nine months ended September 30, 2024 and 2023 were not material.

Current wording

Revenues for the three months ended March 31, 2025 and 2024 were not material.

Previous 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.

Current wording

Research and development expenses were $3.0 million for the three months ended March 31, 2025, compared to $1.1 million for the same period in 2024. The increase of $1.9 million is primarily due to increases of $0.7 million in salaries, payroll related expenses and stock based compensation as a result of increased headcount, $0.3 million in professional fees for the maintenance of certain patent and other intellectual property and biological material assets included in Legacy Assets, $0.8 million in outside research services and consultant spend for research programs and $0.1 million in miscellaneous expenses that were individually insignificant. See Note 1, Organization, Business Overview and Liquidity 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 $2.9 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 wording

General and administrative expenses were $2.9 million for the three months ended March 31, 2025, compared to $1.2 million for the same period in 2024. The increase of $1.7 million is due primarily to increases of $0.9 million of salaries and stock based compensation expenses as a result of new hires and directors, $0.5 million of consulting expenses for critical finance functions, including financial planning, reporting, and operations, as well as the deployment of new platforms and software, a $0.2 million increase in directors and officers insurance and $0.1 million in miscellaneous expenses that were individually insignificant.

Previous wording

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 wording

Other income, net was $1.0 million for the three months ended March 31, 2025, compared to $12.7 million net expense for the same period in 2024. The increase of $13.7 million is primarily attributable to an increase of $6.6 million in the gain from the change in fair value of liability classified Merger Warrants combined with the $7.0 million change in fair value relating to the Legacy Serina Convertible Notes and the AgeX-Serina Note. There was also $0.1 million in miscellaneous other income amounts that were individually insignificant.

Previous 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.

Current wording

See Notes 6, Fair Value Measurements and Note 7, Stockholders’ Equityto 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

Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Current wording

Our primary use of cash is to fund operating expenses, which consist of research and development expenditures and general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Previous 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.

Current wording

Since inception, we have had significant operating losses and negative cash flows as of March 31, 2025 and had an accumulated deficit of $49.1 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 consolidated financial statements included in this Report, 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 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 consolidated interim 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. 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; laboratory expenses and costs for related supplies; compensation and related expenses; license payments or milestone obligations that may arise; legal and other regulatory expenses and general overhead costs.

Previous 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.

Current wording

We believe that our cash on hand, along with the $5.0 million of cash proceeds received in April 2025 from a Securities Purchase Agreement entered with certain investors for a private placement of securities, will not be sufficient to enable us to fund our operations through the first quarter of 2026 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 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.

Current wording

Net loss for the three months ended March 31, 2025 was $4.8 million. Net cash used in operating activities during this period amounted to $4.3 million. The $0.5 million difference between the net loss and net cash used in operating activities during the three months ended March 31, 2025 was comprised of offsetting non-cash items, netting to zero and changes in operating assets and liabilities totaling $0.5 million. The non-cash items consisted of $1.0 million in stock-based compensation offset by a $1.0 million gain in the fair value of warrants. The net $0.5 million cash used in operating assets and liabilities primarily consisted of a $0.5 million decrease in prepaid expenses (comprised of $0.3 million in prepaid technology access fee and $0.2 million in other prepaid expenses and current assets), and a $0.4 million increase in accounts payable that was offset by $0.4 million decrease in accrued expenses.

Previous wording

Net income for the nine months ended September 30, 2023 was $4.2 million. Net cash used in operating activities during this period amounted to $2.7 million. The $6.9 million difference between the net gain and net cash used in operating activities during the nine months ended September 30, 2023 was comprised of non-cash items, totaling $7.2 million, offset by the increase in operating assets and liabilities totaling $0.3 million. The net $7.2 million increase of non-cash items primarily consisted of a $4.5 million gain from the change in fair value of convertible notes, $2.2 million loss from the fair value at inception adjustment on the convertible notes, a $1.1 million gain from the change in the fair value of warrants, offset by the increase in $0.4 million in accrued interest on the AgeX-Serina Note and $0.2 million increase in other non-cash items that were individually insignificant. The increase of $0.3 million cash from changes in operating assets and liabilities primarily consisted of $0.5 million increase in accounts payable, offset by $0.1 million decreases in both accrued expenses and operating leases liabilities.

Current wording

Net loss for the three months ended March 31, 2024 amounted to $15.0 million. Net cash used in operating activities during this period amounted to $1.6 million. The $13.4 million difference between the net loss and net cash used in operating activities during the three months ended March 31, 2024 was comprised of non-cash items totaling $13.0 million and changes in operating assets and liabilities totaling $0.4 million. The net $13.0 million of non-cash items consisted of a $7.0 million change in the fair value of the Legacy Serina Convertible Notes and the AgeX-Serina Note, $5.6 million change in the fair value of liability classified warrants, $0.2 million of accrued interest on AgeX-Serina Note and $0.2 million in miscellaneous non-cash items that were individually insignificant. The net $0.4 million cash used in operating assets and liabilities primarily consisted of a $0.2 million increase in accounts payable and a $0.4 million increase in accrued expenses. These were offset by cash used in other prepaid expenses and current assets of $0.1 million and cash used in operating lease liabilities of $0.1 million.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2023 of $10.1 million was primarily attributable to the net proceeds from the issuance of $0.1 million of Serina Convertible Notes and $10.0 million from the AgeX-Serina Note. See Note 5, Related Party Transactions, to our condensed consolidated interim financial statements included in this Report for additional information.

Current wording

Net cash provided by financing activities for the three months ended March 31, 2025 of $4.9 million is due to net proceeds received from issuance of common stock to Juvenescence in January 2025. See Note 7. Stockholders’ Equity, to our condensed consolidated interim financial statements included elsewhere in this Report for additional information.

Previous 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.

Current wording

Net cash provided by financing activities three months ended March 31, 2024 of $2.7 million is primarily attributable to $2.4 million drawn under the credit facilities from Juvenescence and approximately $0.3 million cash and restricted cash acquired in connection with the Merger.