discussion of the Merger is qualified in its entirety by reference to the Merger Agreement, which is attached to this joint proxy
statement/prospectus as Annex A and is incorporated by reference into this joint proxy statement/prospectus. This
summary does not purport to be complete and may not contain all of the information about the Merger that is important to you.
You should read the entire Merger Agreement carefully as it is the legal document that governs the Merger. This section is not
intended to provide you with any factual information about BioTime or Asterias. Such information can be found elsewhere in this
joint proxy statement/prospectus and in the public filings BioTime or Asterias make with the SEC that are incorporated by reference
into this joint proxy statement/prospectus, as described in the section entitled “Where You Can Find More Information.”
of the Merger
the effective time of the Merger, Merger Sub, a wholly owned subsidiary of BioTime formed to effect the Merger, will merge with
and into Asterias. Asterias will be the surviving corporation in the Merger and will thereby become a wholly owned subsidiary
the Merger, each outstanding share of Asterias Common Stock (other than shares owned by Asterias, BioTime or Merger Sub, which
will be cancelled) will be converted into the right to receive 0.71 BioTime Common Shares, with cash paid in lieu of fractional
shares. This Exchange Ratio is fixed and will not be adjusted to reflect stock price changes prior to closing of the Merger. BioTime
shareholders will continue to hold their existing BioTime shares.
of the Merger
part of the continuous evaluation of Asterias’ clinical and pre-clinical programs and financing needs, the Asterias Board
and senior management regularly considered a variety of potential strategic options and transactions, all in a continued effort
to enhance stockholder value. Over the past several years, the Asterias Board considered potential strategic alternatives, financings
and partnership opportunities presented or potentially available to Asterias, as well as the opportunities and risks associated
with Asterias continuing to operate as an independent company.
several times during the second half of 2017 and first half of 2018, Michael Mulroy, the Chief Executive Officer of Asterias (and
also a member of the BioTime Board), and Aditya Mohanty, the Co-Chief Executive Officer of BioTime at the time, informally discussed
topics related to the industry, financial markets, or their respective businesses, including the possibility of a potential transaction
between the two companies. During this same time period, Asterias also had business development discussions with several foreign
global companies regarding its OPC1and VAC programs; however none of these discussions resulted in any third party submitting
a proposal with respect to any collaboration or acquisition proposal.
the second and third fiscal quarters of 2017, Asterias explored opportunities to conduct a capital raise in light of recent positive
events associated with its business, including encouraging preliminary data from Asterias’ Phase 1/2a study of OPC1 in severe
spinal cord injury and the commencement by Cancer Research UK of a Phase 1 clinical trial of Asterias’ VAC2 product candidate
in non-small cell lung cancer. Notwithstanding these positive business events, Asterias experienced difficulty in raising its
desired amount of capital on acceptable terms through an underwritten public offering. On October 18, 2017, Asterias instead closed
a registered direct offering to sell 4,000,000 shares of Asterias Common Stock for gross proceeds of approximately $10.4 million.
In light of Asterias’ reduced ability to raise funds to operate its business, on November 2, 2017, Asterias reduced its
staffing allocated to non-clinical activities to reduce its operating expenses while still continuing to generate clinical data
in its clinical stage programs. The reduction in staffing affected approximately thirty employees or one-half of Asterias’
workforce. The staffing reduction successfully reduced Asterias’ annual cash burn but made it more difficult for Asterias
to make progress with respect to certain non-clinical activities. The market price and trading volume of Asterias Common Stock
gradually declined during 2018 and as a result, Asterias was unable to raise the same level of funds through its at-the-market
sales agreement in 2018 as it did in 2017.