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SEC Filings

10-Q
BIOTIME INC filed this Form 10-Q on 08/09/2017
Entire Document
 

The increase of $1.7 million related to BioTime therapeutic entities’ general and administrative expenses for the six months ended June 30, 2017 compared to the six months ended June 30, 2016 was primarily due to increases in compensation and related expenses due to additional key personnel hires, rent expense under the lease for our current office and laboratory facilities, which commenced in February 2016, and increase in investor relations and other consulting expenses.

General and administrative expenses include employee and director compensation allocated to general and administrative expenses, consulting fees other than those paid for science-related consulting, facilities and equipment rent and maintenance related expenses, insurance costs allocated to general and administrative expenses, stock exchange-related costs, depreciation expense, marketing costs, legal and accounting costs, and other miscellaneous expenses which are allocated to general and administrative expense.

Other income and expenses, net

Other income/(expenses), net – The following table shows the amount of other income and expenses, net, during the six months ended June 30, 2017 and 2016 (in thousands):

   
Three Months Ended
June 30,
(unaudited)
   
Six Months Ended
June 30,
(unaudited)
 
   
2017
   
2016
   
2017
   
2016
 
Other income/(expenses), net
                       
Interest expense, net
 
$
(413
)
 
$
(76
)
 
$
(719
)
 
$
(88
)
Gain on deconsolidation of Asterias
   
-
     
49,048
     
-
     
49,048
 
Gain on deconsolidation of OncoCyte
   
-
     
-
     
71,697
     
-
 
Gain (loss) on equity method investment in Asterias at fair value
   
3,262
     
(13,483
)
   
(22,835
)
   
(13,483
)
Gain (loss) on equity method investment in OncoCyte at fair value
   
(11,006
)
   
-
     
5,136
     
-
 
Other income, net
   
2,371
     
139
     
3,098
     
30
 
Total other income/(expense), net
 
$
(5,786
)
 
$
35,628
   
$
56,377
   
$
35,507
 

Unrealized gain on deconsolidation of OncoCyte – During the six months ended June 30, we recorded an unrealized gain of $71.7 million in connection with the OncoCyte Deconsolidation on February 17, 2017.

Unrealized gain or loss on Asterias shares – We own 21.7 million shares of common stock of Asterias. We elected to account for our shares in Asterias at fair value using the equity method of accounting beginning on May 13, 2016, the date of the Asterias Deconsolidation. Our Asterias shares had a fair value of $77.2 million as of June 30, 2017, and a fair value of $100 million as of December 31, 2016, based on the closing prices of Asterias common stock on the NYSE MKT of $3.55 per share and $4.60 per share on those respective dates. For the three months ended June 30, 2017, we recorded an unrealized gain of $3.3 million on our Asterias shares due to the increase in Asterias’ stock price from March 31, 2017 to June 30, 2017, based on the closing prices of Asterias common stock on the NYSE MKT of $3.40 per share and $3.55 per share on those respective dates. For the six months ended June 30, 2017, we recorded an unrealized loss of $22.8 million on the Asterias shares due to the decrease in Asterias’ stock price from December 31, 2016 to June 30, 2017, based on the closing prices of Asterias common stock on the NYSE MKT of $4.60 per share and $3.55 per share on those respective dates.

Unrealized gain or loss on OncoCyte shares – We own 14.7 million shares of common stock of OncoCyte. We elected to account for our shares in OncoCyte at fair value using the equity method of accounting beginning on February 17, 2017, the date of the OncoCyte Deconsolidation. Our OncoCyte shares had a fair value of $76.3 million as of June 30, 2017 and a fair value of $71.2 million as of February 17, 2017, based on the closing prices of OncoCyte common stock on the NYSE MKT of $5.20 per share and $4.85 per share on those respective dates. For the three months ended June 30, 2017, we recorded an unrealized loss of $11 million on our OncoCyte shares due to the decrease in OncoCyte’s stock price from March 31, 2017 to June 30, 2017 based on the closing prices of OncoCyte common stock on the NYSE MKT of $5.95 per share and $5.20 per share on those respective dates. For the six months ended June 30, 2017, we recorded an unrealized gain of $5.1 million on the OncoCyte shares due to the increase in OncoCyte’s stock price from February 17, 2017 to June 30, 2017, based on the closing prices of OncoCyte common stock on the NYSE MKT of $4.85 per share and $5.20 per share on those respective dates.

We expect our other income and expenses, net, to continue to fluctuate each reporting period based on the changes in the market prices of our Asterias and OncoCyte shares, which could significantly impact our net income or loss reported in our consolidated statements of operations for each period.

Other income/(expense), net – Other income and expenses, net, in 2017 and 2016 consist primarily of net foreign currency transaction gains and losses recognized by Cell Cure and ESI, and our share of losses on our equity method investment in Ascendance Biotechnology, Inc.

Foreign currency transaction gains and losses for the six months ended June 30, 2017 and 2016 are principally related to the remeasurement of the US dollar denominated convertible notes payable by Cell Cure to BioTime and other Cell Cure shareholders. For the three months ended June 30, 2017, other income and expense, net, also includes a $1.8 million gain we recognized on sale of certain assets by LifeMap Solutions.

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