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Subsequent Events
12 Months Ended
Dec. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events

9. Subsequent Events

 

Office Lease Agreement

 

Effective January 1, 2021, AgeX relocated its principal offices to 1101 Marina Village Parkway, Suite 201, Alameda, California following the December 31, 2020 expiration of the Alameda Lease. AgeX’s new office occupies 135 square feet of leased space in a building located in an office and research park. Base monthly rent is $947 for the one year lease term and also covers office furniture rental, janitorial services, utilities and internet service.

 

Additional Draws under the 2020 Loan Agreement

 

During January 2021, AgeX borrowed an additional $2.0 million under the 2020 Loan Agreement with Juvenescence. The outstanding principal balance of the loans under the 2020 Loan Agreement will become due and payable on the Repayment Date on March 30, 2023.

 

Amendment to 2019 Loan Agreement and Registration Rights Agreements

 

On February 10, 2021, AgeX entered into an amendment (the “Amendment”) to the 2019 Loan Agreement. The Amendment extends the maturity date of loans under the 2019 Loan Agreement to February 14, 2022 and increases the amount of the loan facility from $2.0 million to $6.0 million, of which AgeX has previously borrowed $2 million. All loans in excess of the initial $2.0 million that AgeX previously borrowed are subject to Juvenescence’s discretion. Additional loans, if made, will be in denominations of $1.0 million.

 

The Amendment also grants Juvenescence the right to convert the principal amount of outstanding loans under the 2019 Loan Agreement, as amended, into shares of AgeX common stock at the Market Price as defined in the Amendment. The Amendment places certain limits on the number of shares that may be issued upon conversion of outstanding loan amounts by Juvenescence, or by AgeX under AgeX’s loan conversion rights, if under the rules of the NYSE American or any other national securities exchange on which AgeX common stock may be listed, approval by AgeX stockholders would be required in connection with the issuance of the shares. Under those limits (a) the number of shares of common stock that may be issued upon conversion of any loan advance, at a conversion price that is lower than the market price of AgeX common stock at the time of funding the applicable advance being converted, may not exceed 19.9% of the shares outstanding at August 13, 2019, and (b) no advances may be converted into common stock in an amount that would cause Juvenescence’s ownership of AgeX common stock to equal or exceed 50% of the number of shares of AgeX common stock then outstanding.

 

AgeX will pay Juvenescence an Origination Fee in the amount of $160,000 upon the earlier of the repayment of the loan by AgeX or the conversion of the loan balance into AgeX common stock by Juvenescence or by AgeX. The Origination Fee will be paid in shares of AgeX common stock rather than cash if AgeX exercises its right to convert the loan into shares of common stock, or if Juvenescence elects to convert the loan in shares of common stock and elects to receive the Origination Fee in AgeX common stock.

 

In connection with the Amendment, AgeX entered into Amendment No. 2 to its Registration Rights Agreement with Juvenescence to include among the shares of AgeX common stock to which Juvenescence has registration rights any shares of common stock that may be issued to Juvenescence upon conversion of the loans under the 2019 Loan Agreement, as amended, or under the 2020 Loan Agreement. Under the Registration Rights Agreement, as amended, AgeX agreed to register for resale under the Securities Act, shares of AgeX common stock that were issued to Juvenescence pursuant to the 2019 Loan Agreement or the 2020 Loan Agreement, or that may be acquired by Juvenescence upon conversion of the loans into common stock, or upon exercise of certain common stock purchase warrants that were issued to Juvenescence pursuant to the 2019 Loan Agreement and the 2020 Loan Agreement.

 

PPP Loan Forgiveness

 

On February 19, 2021, the PPP loan was forgiven in full. See Note 8.

 

Proposed Merger

 

On March 2, 2021, we announced that AgeX and LyGenesis, Inc. (“LyGenesis”), a privately held biotechnology company developing cell therapies that enable organ regeneration, will proceed to negotiate an agreement for a merger of the two companies. LyGenesis recently received U.S. Food and Drug Administration clearance for its Investigational New Drug application to conduct a Phase 2a clinical trial on the safety, tolerability, and efficacy of its lead cell therapy for patients with end-stage liver disease, with study initiation planned for 2021.

 

Based on the terms currently being discussed, a newly formed subsidiary of AgeX would merge into LyGenesis. At the closing of the merger, AgeX would issue to LyGenesis stockholders a number of shares of AgeX common stock representing two-thirds of the total number of shares of AgeX common stock to be outstanding immediately following the consummation of the merger on a fully diluted basis, but prior to the issuance of additional shares in a contemplated capital raising transaction following the execution of a merger agreement and contingent on the closing of the merger. Under the terms being discussed, if the merger is completed, AgeX’s pre-merger stockholders would receive an 80% economic interest in AgeX’s induced tissue regeneration or iTR technology; the terms and structure of such economic interest have not yet been determined.

 

There can be no assurance that the negotiations between AgeX and LyGenesis will result in the execution of a definitive merger agreement on the terms being discussed or at all, or, if a merger agreement is entered into, that the merger will be consummated. The completion of any merger would be subject to approval by a special independent committee of the AgeX Board of Directors and by the respective Boards of Directors of both companies. The merger would also be subject to approval by AgeX stockholders and LyGenesis stockholders, including in each case approval by both a majority of the outstanding shares and by the holders of a majority of the shares not held by Juvenescence Limited.

 

Juvenescence, the largest shareholder of AgeX, is also the largest shareholder of LyGenesis. Juvenescence beneficially owns approximately 52.7% of the AgeX common stock determined as disclosed in its most recent amendment to its Schedule 13D filed with the Securities and Exchange Commission, and owns approximately 48% of the common stock of LyGenesis (assuming the conversion of its convertible debt into equity). The Chairman of AgeX’s Board of Directors, Dr. Gregory Bailey, is the Chief Executive Officer of Juvenescence. Two directors of LyGenesis, James Mellon and David Ellam, are the Chairman and the Chief Financial Officer of Juvenescence, respectively.

 

LifeMap Sciences Merger

 

On March 6, 2021, AgeX and its majority-owned subsidiary LifeMap Sciences entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Atlas Capital Partners Limited, a British Virgin Islands company limited by shares (“Atlas”), and GCLMS Acquisition Corporation (“GCLMS”), a Delaware corporation that was a wholly-owned subsidiary of Atlas. On March 15, 2021, the merger was completed pursuant to the terms of the Merger Agreement. As a result of the merger GCLMS merged into LifeMap Sciences and (a) the shares of LifeMap Sciences common stock outstanding at the time of the merger entitled the holders of those shares to receive a pro rata portion of a $500,000 cash payment for all shares of LifeMap Sciences common stock in the aggregate (the “Merger Consideration”), with each LifeMap Sciences shareholder’s pro rata portion of the Merger Consideration to be determined in accordance with the number of shares of LifeMap Sciences common stock owned by such shareholder as a percentage of shares of LifeMap Sciences common stock outstanding immediately before the effective date of the merger, and (b) the outstanding shares of GCLMS common stock were converted into shares of LifeMap Sciences common stock so that Atlas is now the sole shareholder of LifeMap Sciences.

 

AgeX received approximately $466,400 in cash as its pro rata share of the Merger Consideration in the merger. Prior to and as a condition to the merger under the terms of the Merger Agreement $1,761,296 of LifeMap Sciences’ indebtedness to AgeX was converted into shares of LifeMap Sciences common stock. LifeMap Sciences also paid AgeX $250,000 in cash to pay off a portion of LifeMap Sciences’ indebtedness to AgeX that was not converted into shares of LifeMap Sciences common stock.

 

At-the-market Offering

 

On January 8, 2021 AgeX entered into a sales agreement with Chardan Capital Markets LLC (“Chardan”), relating to the sale of shares of AgeX common stock, par value $0.0001 per share, through an at-the-market (“ATM”) offering as described in the prospectus supplement filed with the Form S-3 which was declared effective by the SEC on January 29, 2021. In accordance with the terms of the sales agreement, AgeX may offer and sell shares of AgeX common stock having an aggregate offering price of up to $12.6 million from time to time through Chardan, acting as the sales agent.

 

Through March 26, 2021, AgeX raised approximately $496,000 in gross proceeds under the ATM.