(1)

For the period January 1, 2016 through May 12, 2016, the date immediately preceding the Asterias Deconsolidation.

This adjustment reflects the fair value of our retained noncontrolling investment in OncoCyte on February 17, 2017.  This amount was determined by multiplying the 14.7 million shares of OncoCyte common stock we held as of February 17, 2017, by the $4.85 per share closing price of OncoCyte common stock on the NYSE: MKT on that date. We will account for our retained noncontrolling investment in OncoCyte using the equity method of accounting and plan to elect the fair value option under ASC 825-10, with subsequent changes in the fair value of our investment in OncoCyte recorded in our consolidated statements of operations included in other income and expenses, net.

The OncoCyte Deconsolidation does not create an income tax payment obligation and does not result in the use of any BioTime net operating losses.  For financial reporting purposes, this adjustment reflects an approximate $12.7 million net deferred tax liability in connection with the OncoCyte Deconsolidation, computed based on our estimated statutory tax rate of 40%, in accordance with ASC 740, Income Taxes. The net deferred tax liability also reflects the full release of the valuation allowance we have on our deferred tax assets, estimated as of September 30, 2016, since the deferred tax liability on our investment in Asterias Biotherapeutics, Inc. at fair value, combined with the estimated deferred tax liability generated by the fair value of our retained noncontrolling investment in OncoCyte, are considered to be sources of taxable income as prescribed by ASC 740-10-30-17 that will more likely than not result in the realization of our deferred tax assets, thereby reducing the need for a valuation allowance. See footnote (e).

This adjustment reflects the carrying value of our treasury stock, which represents our shares held by OncoCyte as of September 30, 2016. These shares will continue to be held by OncoCyte as outstanding BioTime common stock.

This adjustment reflects the estimated, net of tax, pro forma gain of approximately $55.8 million arising from the OncoCyte Deconsolidation on February 17, 2017, due to a loss of control of OncoCyte on that date.  This pro forma estimated, net of tax, gain was computed in accordance with ASC 810-10-40-5, as the difference between (i) the aggregate fair value of our retained noncontrolling investment in OncoCyte on February 17, 2017 and the carrying amount of our noncontrolling interest in OncoCyte as of September 30, 2016, and (ii) the carrying amount of OncoCyte’s assets and liabilities as of September 30, 2016. The actual gain on deconsolidation, including the impact of income taxes, will be determined using the fair value of our retained noncontrolling interest in OncoCyte on February 17, 2017 and, based on the actual carrying amounts of OncoCyte assets and liabilities, including the actual carrying amount of our noncontrolling interest in OncoCyte and our deferred tax assets and liabilities, as of February 17, 2017, the date of the OncoCyte Deconsolidation. We are not able to estimate the actual gain or the actual income tax impact on this gain, until we determine the actual balances of our carrying amounts, as applicable, as of February 17, 2017, which will be completed during the first quarter ending March 31, 2017. The actual gain, including related income taxes, may differ materially from the pro forma estimated, net of tax, gain shown herein.

This pro forma estimated, net of tax, gain has not been reflected in the pro forma condensed combined statements of operations because it is considered to be nonrecurring in nature.

This adjustment reflects the deconsolidation of revenues and cost of sales attributable to Asterias and OncoCyte, if applicable.  For Asterias, for the nine months ended September 30, 2016, the adjustment reflects the amounts related to Asterias revenues and cost of sales that were included in BioTime’s consolidated statements of operations during the period January 1, 2016 through May 12, 2016, the date immediately before the Asterias Deconsolidation.

This adjustment reflects the deconsolidation of operating expenses attributable to OncoCyte and Asterias.  For Asterias, for the nine months ended September 30, 2016, the adjustment reflects the amounts related to Asterias operating expenses that were included in BioTime’s consolidated statements of operations during the period January 1, 2016 through May 12, 2016, the date immediately before the Asterias Deconsolidation.

This adjustment reflects the deconsolidation of other income and expenses, net, attributable to Asterias and OncoCyte. For Asterias, for the nine months ended September 30, 2016, the adjustment reflects the amounts related to Asterias other income and expenses, net, that were included in BioTime’s consolidated statements of operations during the period January 1, 2016 through May 12, 2016, the date immediately before the Asterias Deconsolidation.

This adjustment reflects the estimated pro forma income tax effect of the pro-forma adjustments. The tax effect of the pro forma adjustments was calculated using our historical statutory rates in effect for the periods presented, as applicable.

This adjustment reflects the deconsolidation of the net loss attributable to noncontrolling interests of Asterias and OncoCyte.