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SEC Filings

10-Q
BIOTIME INC filed this Form 10-Q on 05/10/2018
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Liquidity and Capital Resources

 

At March 31, 2018, we had $31.4 million of cash, cash equivalents, and marketable equity securities on hand of which $8.5 million of cash was held by AgeX and its subsidiaries.

 

We also hold Asterias shares valued at approximately $31.5 million and OncoCyte shares valued at $30.8 million as of March 31, 2018, that we may use for liquidity, as necessary and as market conditions allow. BioTime has no present plan to liquidate its holdings of Asterias or OncoCyte shares. The market values shown may not represent the amount that could be realized in a sale of Asterias or OncoCyte shares due to various market and regulatory factors, including trading volume or market depth factors and volume and manner of sale restrictions under Federal securities laws, prevailing market conditions and prices at the time of any sale, and subsequent sales of securities by the subsidiaries.

 

Since inception, we have incurred significant operating losses and have funded our operations primarily through the issuance of equity securities, payments from research grants, royalties from product sales and sales of research products and services. At March 31, 2018, we had a consolidated accumulated deficit of $279.4 million, working capital of $30.3 million and consolidated shareholders’ equity of $102.5 million. We have evaluated the projected cash flows for BioTime and our subsidiaries and we believe that our $31.4 million in cash, cash equivalents, and marketable equity securities and the combined value of $62.3 million in Asterias and OncoCyte shares, as of March 31, 2018, provide sufficient cash, cash equivalents, and liquidity to carry out our current operations through at least twelve months from the issuance date of the condensed consolidated financial statements included elsewhere in this Report.

 

Our projected cash flows are subject to various risks and uncertainties, and the unavailability or inadequacy of financing to meet future capital needs could force us to modify, curtail, delay, or suspend some or all aspects of our planned operations. Our determination as to when we will seek new financing and the amount of financing that we will need will be based on our evaluation of the progress we make in our research and development programs, any changes to the scope and focus of those programs, and projections of future costs, revenues, and rates of expenditure. For example, clinical trials being conducted for our OpRegen® program will be funded in part with funds from grants and not from cash on hand. If we were to lose our grant funding or we are unable to continue to provide working capital to the OpRegen® program, we may be required to delay, postpone, or cancel our clinical trials or limit the number of clinical trial sites, unless we are able to obtain adequate financing from another source that could be used for our clinical trials. We cannot assure that adequate financing will be available on favorable terms, if at all. Sales of additional equity securities by us or our subsidiaries and affiliates could result in the dilution of the interests of present shareholders.

 

Cash flows used in operating activities

 

During the three months ended March 31, 2018, our total research and development expenses, including $800,000 in nonrecurring acquired in-process research and development expenses, were $6.7 million and our general and administrative expenditures were $6.0 million. Net loss attributable to BioTime for the three months ended March 31, 2018 amounted to $63.5 million. Net cash used in operating activities during this period amounted to $10.3 million. The difference between the net loss attributable to us and net cash used in operating activities during the three months ended March 31, 2018 was primarily attributable to the following noncash items: $37.4 million unrealized loss on our equity method investment in OncoCyte at fair value, $17.4 million unrealized loss on our equity method investment in Asterias at fair value, stock-based compensation expense of $1.0 million, depreciation and amortization expense of $0.9 million, $0.8 million for acquired in-process research and development, and a $3.2 million gain on the disposition of AgeX’s Ascendance common stock. Changes in working capital impacted our cash used in operations by $0.9 million as a net use of cash.

 

Cash flows provided by investing activities

 

During the three months ended March 31, 2018, we generated net $2.2 million in cash from investing activities. The primary components were $3.2 million proceeds from the disposition of AgeX’s Ascendance common stock which was offset by a $0.8 million payment to Ascendance for the acquisition of in-process research and development assets, and $0.2 million used for leasehold improvements and to purchase equipment.

 

Cash flows generated by financing activities

 

During the three months ended March 31, 2018, we generated $633,000 of net cash from financing activities. The primary components were $737,000 in proceeds from the sale of AgeX stock purchase warrants partially offset by the $97,000 repayment of the lease liability relating to landlord improvements and promissory notes.

 

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