Serina Therapeutics, Inc.

Previous 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.

Current wording

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and in 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 should be read in conjunction with Note 1 in our unaudited condensed consolidated interim financial statements and the related notes 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 included in Item 1 of this Report.

Previous 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.

Current wording

Our operations through June 30, 2025, have been financed primarily by aggregate net proceeds of $57.4 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 $5.6 million and $3.9 million for six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had an accumulated deficit of $55.6 million and $6.0 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 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.

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 and six months ended June 30, 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 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.

Current wording

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

Previous wording

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

Current wording

Revenues for the three and six months ended June 30, 2025 and 2024 were not material.

Previous 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.

Current wording

Research and development expenses were $3.2 million for the three months ended June 30, 2025, compared to $1.6 million for the same period in 2024. The increase of $1.6 million is primarily due to increases of $1.2 million in outside research services, $0.3 million in consultant spend for research programs and $0.6 million in salaries, payroll related expenses and stock based compensation as a result of increased headcount and increase of $0.1 million in miscellaneous expenses amounts that were individually insignificant. These increases were offset by a decrease of $0.3 million in professional fees for the maintenance of certain patent and other intellectual property and biological material assets included in Legacy Assets and a decrease of $0.3 million in severance and related costs. 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 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.

Current wording

General and administrative expenses were $2.5 million for the three months ended June 30, 2025, compared to $2.3 million for the same period in 2024. The increase of $0.2 million is due primarily to increases of $0.3 million in stock based compensation expenses as a result of new option grants and $0.3 million of consulting expenses primarily for critical finance functions, including financial planning, reporting, and operations, as well as the deployment of new platforms and software. These increases were offset by a decrease of $0.4 million in legal fees primarily as the result of the conclusion of our post-merger compliance and reporting activities.

Previous 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.

Current wording

Other income was $0.1 million for the six months ended June 30, 2025, compared to $3.7 million net expense for the same period in 2024. The $3.8 million change is primarily attributable to a decrease of $7.0 million loss from the change in fair value relating to the Legacy Serina Convertible Notes and the AgeX-Serina Note and a decrease of $0.5 million in interest expense which was offset by the $3.7 million decrease in gain from the change in fair value of liability classified Merger Warrants.

Previous wording

We had $4.3 million in cash and cash equivalents as of March 31, 2025. 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. Post Merger, our operations have been funded by the exercise of Post-Merger warrants, $5.0 million from Juvenescence in June 2024, and the issuance of common stock to Juvenescence whereby we issued 1,000,000 shares at a purchase price of $10.00 per share, for an aggregate amount of $10.0 million which were received in two $5.0 million tranches in November 2024 and January 2025. In April 2025, we received $5.0 million of cash proceeds from a Securities Purchase Agreement entered with certain investors for a private placement of securities.

Current wording

We had $6.0 million in cash and cash equivalents as of June 30, 2025. 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. Post Merger, our operations have been funded by the exercise of Post-Merger warrants, $5.0 million from Juvenescence in June 2024, and the issuance of common stock to Juvenescence whereby we issued 1,000,000 shares at a purchase price of $10.00 per share, for an aggregate amount of $10.0 million which were received in two $5.0 million tranches in November 2024 and January 2025.

Previous 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.

Current wording

Since inception, we have had significant operating losses and negative cash flows and as of June 30, 2025, we had an accumulated deficit of $55.6 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 interim 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

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.

Current wording

We believe that our cash on hand will not be sufficient to enable us to fund our operations through one year from the balance sheet date 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 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.

Current wording

Net loss for the six months ended June 30, 2025 was $11.3 million. Net cash used in operating activities during this period amounted to $8.1 million. The $3.2 million difference between the net loss and net cash used in operating activities during the six months ended June 30, 2025 was comprised of offsetting non-cash items of $2.1 million and changes in operating assets and liabilities totaling $1.2 million. The non-cash items primarily consisted of $1.8 million in stock-based compensation, $0.1 million equity compensation to consultants for services and $0.2 million in non-cash lease expenses. The net $1.2 million cash from operating assets and liabilities primarily consisted of a $1.0 million increase in accounts payable that was offset by a $0.1 million decrease in accrued expenses, a $0.4 million increase in other current liabilities and a $0.1 million decrease in operating lease liabilities.

Previous 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.

Current wording

Net loss for the six months ended June 30, 2024 amounted to $9.8 million. Net cash used in operating activities during this period amounted to $9.5 million. The $0.3 million difference between the net loss 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 accrued expenses, and $0.2 million from the effect of net changes in operating lease liabilities and amount due to related party.

Previous 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.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2025 of $10.5 million is primarily due to net proceeds received of $4.9 million from issuance of common stock to Juvenescence in January 2025, $5.0 million received in April 2025 from a Securities Purchase Agreement entered with certain investors for a private placement of securities, $0.6 million net proceeds from our ATM. 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 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.

Current wording

Net cash provided by financing activities six months ended June 30, 2024 of $8.1 million is primarily attributable to $5.0 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 $0.3 million cash and restricted cash acquired in connection with the Merger. These changes were offset to some extent by $0.1 million repayments 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.