and Asterias’ operations require substantial ongoing capital, and if financing is not available to the Combined Company
on acceptable terms, the Combined Company may need to raise additional capital by issuing securities or debt through licensing
arrangements, which may cause dilution to the Combined Company’s shareholders or restrict the Combined Company’s operations
or proprietary rights.
and Asterias’ respective businesses are capital intensive. Following the Merger, the Combined Company is expected to incur
significant costs on an ongoing basis to continue its operations, develop and manufacture its current or future products, and
to pay any significant unplanned or accelerated expenses or for new significant strategic investments. For example, the Combined
Company may need or seek to raise capital from third-party fund investors and lenders Additional financing may not be available
to the Combined Company when it needs it, or may not be available on favorable terms. To the extent that the Combined Company
raises additional capital by issuing equity securities, such an issuance may cause significant dilution to the Combined Company’s
shareholders’ ownership and the terms of any new equity securities may have preferences over the Combined Company’s
common stock. Any debt financing the Combined Company enters into may involve covenants that restrict its operations. These restrictive
covenants may include limitations on additional borrowing and specific restrictions on the use of the Combined Company’s
assets, as well as prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments. In addition,
if the Combined Company raises additional funds through licensing arrangements, it may be necessary to grant licenses on terms
that are not favorable to the Combined Company.
may also need or want to raise additional financing for working capital, capital expenditures, acquisitions or other general corporate
purposes in connection with the Merger. BioTime’s ability to raise capital from third-party fund investors and lenders to
fund its operations and growth, or to refinance its existing indebtedness, will depend on, among other factors, BioTime’s
financial position and performance, as well as prevailing market conditions and other factors beyond BioTime’s control,
such as any decisions by credit ratings agencies with respect to credit ratings that they may maintain with respect to BioTime.
Any concerns regarding BioTime’s business and liquidity, uncertainty regarding the timing and completion of the Merger and
the capital structure of Asterias and BioTime following the Merger and general market conditions could negatively impact BioTime’s
ability to access the capital markets or to raise funds on acceptable terms, or at all.
BioTime and Asterias shareholders will have a reduced ownership and voting interest in the Combined Company after the Merger and
will exercise less influence over the Combined Company’s management.
BioTime shareholders currently have the right to vote in the election of the BioTime Board and other matters affecting BioTime.
Current Asterias stockholders currently have the right to vote in the election of the Asterias Board and on other matters affecting
Asterias. Immediately after the Merger is completed, it is expected that current BioTime shareholders will own approximately 84%
of the BioTime Common Shares and current Asterias stockholders will own approximately 16% of the outstanding BioTime
Common Shares after the completion of the Merger, based on the number of shares of common stock outstanding of BioTime and Asterias
as of January 28, 2019 the record date for the special meetings.
a result of the Merger, current BioTime and Asterias shareholders will have less influence on the Combined Company’s management
and policies than they now have on the management and policies of BioTime and Asterias, respectively.