Basis of Presentation, Liquidity and Summary of Significant Accounting Policies
unaudited condensed consolidated interim financial statements presented herein, and discussed below, have been prepared in accordance
with generally accepted accounting principles in the U.S. (“GAAP”) for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Commission. In accordance with those rules
and regulations certain information and footnote disclosures normally included in comprehensive consolidated financial statements
have been condensed or omitted. The condensed consolidated balance sheet as of December 31, 2017 was derived from the audited
consolidated financial statements at that date, but does not include all the information and footnotes required by GAAP. These
condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements
and notes thereto included in BioTime’s Annual Report on Form 10-K for the year ended December 31, 2017.
accompanying interim condensed consolidated financial statements, in the opinion of management, include all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of BioTime’s financial condition and results of
operations. The condensed consolidated results of operations are not necessarily indicative of the results to be expected for
any other interim period or for the entire year.
of consolidation – BioTime’s condensed consolidated financial statements present the operating results of all
of its wholly-owned and majority-owned subsidiaries that it consolidates as required under GAAP. All material intercompany accounts
and transactions have been eliminated in consolidation. BioTime consolidated Cell Cure Neurosciences, Ltd (“Cell Cure”),
OrthoCyte Corporation (“OrthoCyte”), ES Cell International, Pte Ltd (“ESI”), BioTime Asia, Limited (“BioTime
Asia”), AgeX Therapeutics, Inc. (“AgeX”), ReCyte Therapeutics, Inc. (“ReCyte”), LifeMap Sciences,
Inc. (“LifeMap Sciences”) and LifeMap Sciences, Ltd., as BioTime has the ability to control their operating and financial
decisions and policies through its stock ownership or representation on the board of directors, and the noncontrolling interest
is reflected as a separate element of shareholders’ equity on BioTime’s condensed consolidated balance sheets.
on February 17, 2017 and May 13, 2016, respectively, OncoCyte and Asterias financial statements and results are no longer a part
of BioTime’s condensed consolidated financial statements and results. The market value of OncoCyte and Asterias common stock,
as of those respective dates, held by BioTime is now reflected on BioTime’s condensed consolidated balance sheet and
the subsequent changes in the market value of those shares is reflected in BioTime’s condensed consolidated
balance sheet and condensed consolidated statements of operations, allowing BioTime shareholders to evaluate the value
of the respective OncoCyte and Asterias’ portion of BioTime’s business.
results are not included in BioTime’s condensed consolidated statements of operations for the three months ended March 31,
2018. BioTime’s condensed consolidated
statements of operations for the three months ended March 31, 2017 include OncoCyte’s results for the period from January
1, 2017 through February 16, 2017, the day immediately preceding the OncoCyte Deconsolidation.
– Since inception, BioTime has incurred significant operating losses and has funded its 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, BioTime had an accumulated deficit of $279.4 million, working capital of $30.3 million and shareholders’
equity of $102.5 million. BioTime has evaluated its projected cash flows and believes that its cash, cash equivalents and marketable
equity securities of $31.4 million at March 31, 2018 provide sufficient cash, cash equivalents,
and liquidity to carry out BioTime’s current operations through at least twelve months from the issuance date of the condensed
consolidated financial statements included in this Report. BioTime also holds shares of Asterias and OncoCyte common stock with
a combined market value of $62.3 million at March 31, 2018. Although BioTime has no present plans to liquidate its holdings of
Asterias or OncoCyte shares, if BioTime needs near term working capital or liquidity to supplement its cash and cash equivalents
for its operations, BioTime may sell some, or all, of its Asterias or OncoCyte shares, as necessary.
projected cash flows are subject to various risks and uncertainties, and the unavailability or inadequacy of financing to meet
future capital needs could force it to modify, curtail, delay, or suspend some or all aspects of its planned operations. BioTime’s
determination as to when it will seek new financing and the amount of financing that it will need will be based on its evaluation
of the progress it makes in its research and development programs, any changes to the scope and focus of those programs, and projection
of future costs, revenues, and rates of expenditure. For example, clinical trials being conducted for its OpRegen®
program will be funded in part with funds from grants and not from cash on hand. If BioTime were to lose grant funding
or is unable to continue to provide working capital to the OpRegen® program, it may be required to delay,
postpone, or cancel the clinical trials or limit the number of clinical trial sites, unless BioTime is able to obtain adequate
financing from another source that could be used for the clinical trials. BioTime cannot assure that adequate financing will be
available on favorable terms, if at all. Sales
of additional equity securities by BioTime or its subsidiaries could result in the dilution of the interests of present shareholders.