Shareholders' Equity

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Shareholders' Equity

11. Shareholders’ Equity

Preferred Shares

BioTime is authorized to issue 2,000,000 preferred shares. The preferred shares may be issued in one or more series as the board of directors may determine by resolution. The board of directors is authorized to fix the number of shares of any series of preferred shares and to determine or alter the rights, preferences, privileges, and restrictions granted to or imposed on the preferred shares as a class, or upon any wholly unissued series of any preferred shares. The board of directors may, by resolution, increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series of preferred shares subsequent to the issue of shares of that series. There are no preferred shares issued and outstanding.

Common Shares

At June 30, 2019, BioTime was authorized to issue 250,000,000 common shares, no par value. As of June 30, 2019, and December 31, 2018, BioTime had 149,642,861 and 127,135,774 issued and outstanding common shares, respectively.

In April 2017, BioTime entered into a Controlled Equity Offering^SM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co., as sales agent (“Cantor Fitzgerald”), pursuant to which BioTime may offer and sell, from time to time, through Cantor Fitzgerald, shares of BioTime common stock having an aggregate offering price of up to $25,000,000. BioTime is not obligated to sell any shares under the Sales Agreement. Subject to the terms and conditions of the Sales Agreement, Cantor Fitzgerald will use commercially reasonable efforts, consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations, and the rules of the NYSE American, to sell the shares from time to time based upon BioTime’s instructions, including any price, time or size limits specified by BioTime. Under the Sales Agreement, Cantor Fitzgerald may sell the shares by any method deemed to be an “at-the-market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, or by any other method permitted by law, including in privately negotiated transactions. Cantor Fitzgerald’s obligations to sell the shares under the Sales Agreement are subject to satisfaction of certain conditions, including the continued effectiveness of BioTime’s Registration Statement on Form S-3, which became effective on May 5, 2017. As of June 30, 2019, $24.2 million remained available for sale through the Sales Agreement.

BioTime agreed to pay Cantor Fitzgerald a commission of 3.0% of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide Cantor Fitzgerald with customary indemnification and contribution rights. The Sales Agreement may be terminated by Cantor Fitzgerald or BioTime at any time upon notice to the other party, or by Cantor Fitzgerald at any time in certain circumstances, including the occurrence of a material and adverse change in BioTime’s business or financial condition that makes it impractical or inadvisable to market the shares or to enforce contracts for the sale of the shares.

Reconciliation of Changes in Shareholders’ Equity

The following table documents the changes in shareholders’ equity for the three and six months ended June 30, 2019 (unaudited and in thousands):

	Preferred Shares				Common Shares									Noncontrolling			Accumulated Other			Total
	Number of Shares		Amount		Number of Shares			Amount			Accumulated Deficit			Interest/ (Deficit)			Comprehensive Income			Shareholders’ Equity
BALANCE AT DECEMBER 31, 2018		-	$	-		127,136		$	354,270		$	(261,856	)	$	(1,594	)	$	1,426		$	92,246
Shares issued in connection with the Asterias Merger		-		-		24,696			32,353			-			-			-			32,353
Shares retired in connection with the Asterias Merger		-		-		(2,622	)		(3,435	)		-			-			-			(3,435	)
Shares issued upon vesting of restricted stock units, net of shares retired to pay employees’ taxes		-		-		118			(75	)		-			-			-			(75	)
Stock-based compensation		-		-		-			1,361			-			-			-			1,361
Stock-based compensation for shares issued upon vesting of Asterias restricted stock units attributable to post combination services		-		-		60			79			-			-			-			79
Adjustment upon adoption of leasing standard		-		-		-			-			143			-			-			143
Foreign currency translation loss		-		-		-			-			-			-			(732	)		(732	)
NET INCOME/(LOSS)		-		-		-			-			39,310			(14	)		-			39,296
BALANCE AT MARCH 31, 2019		-	$	-		149,388		$	384,553		$	(222,403	)	$	(1,608	)	$	694		$	161,236
Shares issued for settlement of BioTime Warrants		-		-		252			302			-			-			-			302
Shares issued upon vesting of restricted stock units, net of shares retired to pay employees’ taxes		-		-		3			(2	)		-			-			-			(2	)
Stock-based compensation		-		-		-			762			-			-			-			762
Foreign currency translation loss		-		-		-			-			-			-			(487	)		(487	)
NET LOSS		-		-		-			-			(30,032	)		(20	)		-			(30,052	)
BALANCE AT JUNE 30, 2019		-	$	-		149,643		$	385,615		$	(252,435	)	$	(1,628	)	$	207		$	131,759

The following table documents the changes in shareholders’ equity for the three and six months ended June 30, 2018 (unaudited and in thousands):

	Preferred Shares				Common Shares								Noncontrolling			Accumulated Other			Total
	Number of Shares		Amount		Number of Shares		Amount			Accumulated Deficit			Interest/ (Deficit)			Comprehensive Income			Shareholders’ Equity
BALANCE AT DECEMBER 31, 2017		-	$	-		126,866	$	378,487		$	(216,297	)	$	1,622		$	451		$	164,263
Cumulative-effect adjustment for adoption of ASU 2016-01 on January 1, 2018		-		-		-		-			328			-			(328	)		-
Cumulative-effect adjustment for adoption of Accounting Standard Codification, Topic 606, on January 1, 2018		-		-		-		-			101			-			-			101
Shares issued upon vesting of restricted stock units, net of shares retired to pay employees’ taxes		-		-		3		(7	)		-			-			-			(7	)
Stock-based compensation		-		-		-		809			-			-			-			809
Stock-based compensation in subsidiaries		-		-		-		-			-			175			-			175
Sale of subsidiary warrants in AgeX		-		-		-		-			-			737			-			737
Subsidiary financing transactions with noncontrolling interests - AgeX		-		-		-		(103	)		-			103			-			-
Foreign currency translation adjustments		-		-		-		-			-			-			75			75
NET LOSS		-		-		-		-			(63,548	)		(150	)		-			(63,698	)
BALANCE AT MARCH 31, 2018		-	$	-		126,869	$	379,186		$	(279,416	)	$	2,487		$	198		$	102,455
Shares issued upon vesting of restricted stock units, net of shares retired to pay employees’ taxes		-		-		5		(5	)		-			-			-			(5	)
Stock-based compensation		-		-		-		825			-			-			-			825
Stock-based compensation of subsidiaries		-		-		-		-			-			278			-			278
Additional adjustment for ASC Topic 606		-		-		-		-			1			-			-			1
Sale of subsidiary shares in AgeX		-		-		-		-			-			5,000			-			5,000
Subsidiary financing transactions with noncontrolling interests - AgeX		-		-		-		3,634			-			(3,634	)		-			-
Subsidiary financing and other transactions with noncontrolling interests – Cell Cure		-		-		-		(111	)		-			70			-			(41	)
Foreign currency translation adjustments		-		-		-		-			-			-			884			884
NET LOSS		-		-		-		-			(4,215	)		(431	)		-			(4,646	)
BALANCE AT JUNE 30, 2018						126,874		383,529		$	(283,630	)	$	3,770		$	1,082		$	104,751

Warrants

BioTime (previously Asterias) Warrants - Liability Classified

In March 2019, in connection with the closing of the Asterias Merger, BioTime assumed outstanding Asterias Warrants. As of June 30, 2019, the total number of shares of BioTime common stock subject to warrants that were assumed by BioTime in connection with the Asterias Merger was 1,089,900 (representing approximately $289,000 in fair value as of June 30, 2019), which were converted to BioTime Warrants 30 days after the closing of the Asterias Merger, with similar terms and conditions retained under the BioTime Warrants as per the original Warrant Agreements. The BioTime Warrants have an exercise price of $6.15 per warrant share and expire on May 13, 2021. BioTime is accounting for the outstanding BioTime Warrants as a liability at fair value, with subsequent changes to the fair value of the BioTime Warrants at each reporting period thereafter included in the consolidated statement of operations (see Note 3).

For the three and six months ended months ended June 30, 2019, BioTime recorded an unrealized gain of $0.2 million due to the decline in the fair value of the BioTime Warrants from the Asterias Merger date through June 30, 2019. As of June 30, 2019, the fair value of the BioTime Warrants was $0.3 million included in long-term liabilities on the condensed consolidated balance sheets.

Cell Cure Warrants - Liability Classified

Cell Cure has two sets of issued warrants. Warrants to purchase 24,566 Cell Cure ordinary shares at an exercise price of $40.5359 were issued to Hadasit in July 2017. These warrants expire in July 2022. Warrants to purchase 13,738 Cell Cure ordinary shares at exercise prices ranging from $32.02 to $40.00 per share have been issued to consultants. These warrants expire in October 2020 and January 2024.

ASC 815 requires freestanding financial instruments, such as warrants, with exercise prices denominated in currencies other than the functional currency of the issuer to be accounted for as liabilities at fair value, with all subsequent changes in fair value after the issuance date to be recorded as gains or losses in the consolidated statements of operations.

As of June 30, 2019 and December 31, 2018, the total value of all warrants issued by Cell Cure was $0.3 million and $0.4 million, respectively. Such warrants are classified as long-term liabilities on the condensed consolidated balance sheets.