Lineage Cell Therapeutics, Inc.

Previous wording

We are a clinical-stage biotechnology company developing novel allogeneic, or "off-the-shelf," cell therapies for serious neurological and ophthalmic conditions. Our programs are based on our proprietary, cell-based technology platform and associated development, formulation, manufacturing and delivery capabilities. From this platform, we design, develop, manufacture, and test specialized human cells with anatomical and physiological functions similar or identical to cells found naturally in the human body. The cells we manufacture are produced by applying directed differentiation processes to established, well-characterized, and self-renewing pluripotent cell lines. These processes are based on specific developmental lineages and generated cells with desired characteristics. Functional cells developed from such lineages that are relevant to the underlying condition are transplanted into patients in an effort to (a)replace or support cells that are absent or dysfunctional due to degenerative disease, aging, or traumatic injury, and (b)restore or enhance the patient's functional activity. Our business strategy is to efficiently leverage our technology platform and our development and manufacturing capabilities to advance our programs internally or in conjunction with strategic partners to further enhance their value and probability of success.

Current wording

We are a clinical-stage biotechnology company developing novel allogeneic, or "off-the-shelf," cell therapies for serious neurological and ophthalmic conditions. Our programs are based on our proprietary, cell-based technology platform and associated development, formulation, manufacturing and delivery capabilities. From this platform, we design, develop, manufacture, and test specialized human cells with anatomical and physiological functions similar or identical to cells found naturally in the human body. The cells we manufacture are produced by applying directed differentiation processes to established, well-characterized, and self-renewing pluripotent cell lines. These processes are based on specific developmental lineages and generate cells with desired characteristics. Functional cells developed from such lineages that are relevant to the underlying condition are transplanted into patients in an effort to (a)replace or support cells that are absent or dysfunctional due to degenerative disease, aging, or traumatic injury, and (b)restore or enhance the patient's functional activity. Our business strategy is to efficiently leverage our technology platform and our development and manufacturing capabilities to advance our programs internally or in conjunction with strategic partners to further enhance their value and probability of success.

Previous wording

Scalable, cost-effective manufacturing can help make cell therapies affordable for a wider patient population. We believe a significant challenge facing the cell therapy field, and a necessary component of successful allogeneic cell therapy commercialization, is the ability to create, at scale and in a cost-effective manner, the desired cell product from a single cell line for the life of the product with the purity, potency, and production scale implied by an “off the shelf” product. The complex process for such a cost-effective and scaled production can be achieved by employing a current Good Manufacturing Practice, or cGMP, compliant and genetically stable cell banking system, which can provide an abundant, consistent, and permanent source of material for downstream production. A stable cGMP master cell bank created from a single, well-characterized pluripotent cell line can be the source of a cGMP working cell bank, which thereafter generates hundreds or thousands of vials of a final cell-based product comprised of millions of cells per vial. Utilizing a two-tier banking system can enable significant amplification of starting material, thereby being capable of providing a reliable, consistent, and permanent supply to the subsequent production campaigns that generate the final product, producing even millions of vials from the original initial bank.

Current wording

Scalable, cost-effective manufacturing can help make cell therapies affordable for a wider patient population. We believe a significant challenge facing the cell therapy field, and a necessary component of successful allogeneic cell therapy commercialization, is the ability to create, at scale and in a cost-effective manner, the desired cell product from a single cell line with the purity, potency, and production scale implied by an “off-the-shelf” product. The complex process for such a cost-effective and scaled production can be achieved by employing a current Good Manufacturing Practice, or cGMP, compliant and genetically stable cell banking system, which can provide an abundant and consistent supply of material for downstream production. A vial from a stable cGMP master cell bank created from a single, well-characterized pluripotent cell line can be the source of a cGMP working cell bank, which thereafter generates hundreds or thousands of vials of a final cell-based product comprised of millions of cells per vial. Utilizing a two-tier banking system can enable significant amplification of starting material, thereby being capable of providing a reliable, consistent, and permanent supply to the subsequent production campaigns that generate the final product, producing even millions of vials from the original initial bank.

Previous wording

We previously completed a cGMP production run for two of our clinical-stage product candidates from such a customized, two-tiered cGMP cell banking system. In total, we have to date produced unique cGMP banking systems for three of our product candidates. We believe we have reduced to practice and demonstrated a reproducible and scalable cGMP cell therapy production capability with the purity, potency, and production scale implied by an “off the shelf” allogeneic product. We believe this achievement with the banks we have manufactured can support a production capability exceeding the number of patients with each of the respective conditions, which has to date been considered in both cases to be a single-administration dosing schedule, without requiring the manufacture of a new starting master cell bank. We plan to leverage this expertise to produce a cost-effective, scalable, and consistent supply of allogeneic cell transplant product candidates for ourselves and others, including for indications requiring large cell doses or large patient populations.

Current wording

We previously completed a cGMP production run for each of OpRegen and OPC1, two of our product candidates, from such a customized, two-tiered cGMP cell banking system. In total, we have to date produced unique cGMP banking systems for three of our product candidates, the third being ANP1. We therefore believe we have reduced to practice and demonstrated a reproducible and scalable cGMP cell therapy production capability with the purity, potency, and production scale implied by an “off the shelf” allogeneic product. We plan to leverage this expertise to produce a cost-effective, scalable, and consistent supply of allogeneic cell transplant product candidates for ourselves and others, including for indications requiring large cell doses or large patient populations. We expect the cell banks we have manufactured will support a production capability exceeding the reasonably foreseeable number of patients with the conditions that OpRegen and OPC1 are currently intended to address (each of which we currently expect to be a single-administration dose) without requiring the manufacture of a new starting master cell bank.

Previous wording

Our lead cell therapy program, known as OpRegen®, is being developed for the treatment of ocular disorders, including geographic atrophy (“GA”) secondary to age-related macular degeneration (“AMD”) under a collaboration we entered into with F. Hoffmann-La Roche Ltd and Genentech, Inc., a member of the Roche Group (collectively or individually, “Roche” or “Genentech”). OpRegen (also known as RG6501) is a suspension of human allogeneic retinal pigmented epithelial (“RPE”) cells and is currently being evaluated in a Phase 2a multicenter clinical trial in patients with GA secondary to AMD which is referred to as the “GAlette Study”. OpRegen subretinal delivery has the potential to counteract RPE cell loss in areas of GA lesions by supporting retinal cell health and improving retinal structure and function. Under the terms of the Collaboration and License Agreement we entered into with Roche in

Current wording

Our lead cell therapy program, known as OpRegen®, is being developed for the treatment of ocular disorders, including geographic atrophy (“GA”) secondary to age-related macular degeneration (“AMD”) under a collaboration we entered into with F. Hoffmann-La Roche Ltd and Genentech, Inc., a member of the Roche Group (collectively or individually, “Roche” or “Genentech”). OpRegen (also known as RG6501) is a suspension of human allogeneic retinal pigmented epithelial (“RPE”) cells and is currently being evaluated in a Phase 2a multicenter clinical trial in patients with GA secondary to AMD which is referred to as the “GAlette Study”. OpRegen subretinal delivery has the potential to counteract RPE cell loss in areas of GA lesions by supporting retinal cell health and improving retinal structure and function. Under the terms of the Collaboration and License Agreement we entered into with Roche in December 2021 (the “Roche Agreement”), we received a $50.0 million upfront payment in January 2022 and are eligible to receive up to an additional $620.0 million in developmental, regulatory, and commercialization milestone payments. We also are eligible to receive tiered double-digit percentage royalties on net sales of OpRegen in the U.S. and other major markets. In May 2024, we entered into an additional agreement with Genentech (“Services Agreement”) pursuant to which we agreed to provide Genentech with supplemental clinical, technical, training, manufacturing, and procurement services that support the ongoing advancement of the OpRegen program in exchange for certain payments. In September 2024, Roche and Genentech announced receipt of Regenerative Medicine Advanced Therapy (“RMAT”) designation from the U.S. Food and Drug Administration (“FDA”) for OpRegen for the treatment of GA secondary to dry AMD. In June 2025, Roche and Genentech presented positive 36-month visual acuity results at Clinical Trials at The Summit 2025, from the Lineage-run Phase 1/2a clinical trial of OpRegen. The presentation showed that (i) gains in Best Corrected Visual Acuity (BCVA) in patients in Cohort 4 (less advanced GA) measured at month 12 remain evident through month 36 following subretinal administration of OpRegen cell therapy; (ii) improvement in BCVA and outer retinal structure in patients with extensive OpRegen bleb coverage of their GA area was greater than in patients with limited coverage and persisted through month 36; (iii) in those patients with extensive OpRegen cell therapy coverage of atrophic areas at the time of surgical delivery, the mean change in BCVA was +9.0 ETDRS letters for those completing 3-year follow-up (compared to +7.4 ETDRS letters at 24 months) (n=5); and, (iv) these data suggest that OpRegen cell therapy may counteract RPE cell dysfunction and loss in GA by providing support to the remaining retinal cells within atrophic areas, and these effects appear durable through at least 36 months after a single administration.

Previous wording

Our most advanced internally owned product candidate is OPC1, an allogeneic oligodendrocyte progenitor cell therapy designed to improve recovery following a spinal cord injury (“SCI”). Improved functional activity can lead to greater mobility and enhanced quality of life for patients and significant cost-savings for caregivers and payors. OPC1 also has an extensive long-term safety profile based on two clinical trials conducted to date: a five-patient Phase 1 safety trial in acute thoracic SCI, where all active subjects have been followed for at least 13 years, and a 25-patient Phase 1/2a multicenter dose-escalation trial in subacute cervical SCI, where all active subjects were evaluated for at least 7 years. Results from these studies have been published in the Journal of Neurosurgery Spine. OPC1 clinical development has been supported in part by a $14.3 million grant from the California Institute for Regenerative Medicine (“CIRM”). We plan to apply for additional funding from CIRM to support continued clinical development of OPC1 for the treatment of SCI when CIRM begins accepting new applications, which they have indicated will be available soon. See “Grants from Government Entities – Grants from the California Institute for Regenerative Medicine,” below. In February 2025, we announced that we were initiating our DOSED (Delivery of Oligodendrocyte Progenitor Cells for Spinal Cord Injury: Evaluation of a Novel Device) clinical study to evaluate the safety and utility of a novel spinal cord delivery device designed to administer OPC1 to the spinal parenchyma in subacute and chronic SCI patients. The study will enroll both subacute (between 21 to 42 days following injury) and chronic (between 1 to 5 years following injury) SCI patients. The DOSED study will be the first study of OPC1 to include patients with a chronic injury, a condition which comprises the majority of SCI patients. We expect DOSED will enable future subsequent studies aimed to demonstrate OPC1’s ability to impact functional outcomes. UC San Diego Health, was named as the first participating site for the DOSED study. The DOSED study is expected to commence enrollment in June of 2025.

Current wording

Our most advanced internally owned product candidate is OPC1, an allogeneic oligodendrocyte progenitor cell therapy designed to improve recovery following a spinal cord injury (“SCI”). Improved functional activity can lead to greater mobility and enhanced quality of life for patients and significant cost-savings for caregivers and payors. OPC1 also has an extensive long-term safety profile based on two clinical trials conducted to date: a five-patient Phase 1 safety trial in acute thoracic SCI, where all active subjects have been followed for at least 13 years, and a 25-patient Phase 1/2a multicenter dose-escalation trial in subacute cervical SCI, where all active subjects were evaluated for at least 7 years. Results from these studies have been published in the Journal of Neurosurgery Spine. In February 2025, we announced that we were initiating our DOSED (Delivery of Oligodendrocyte Progenitor Cells for Spinal Cord Injury: Evaluation of a Novel Device) clinical study to evaluate the safety and utility of a novel spinal cord delivery device designed to administer OPC1 to the spinal parenchyma in subacute and chronic SCI patients. The study will enroll both subacute (between 21 to 42 days following injury) and chronic (between 1 to 5 years following injury) SCI patients. The DOSED study will be the first study of OPC1 to include patients with a chronic injury, a condition which comprises the majority of SCI patients. We expect DOSED will enable future subsequent studies aimed to demonstrate OPC1’s ability to impact functional outcomes. In July 2025 the first chronic SCI patient (a neurologically complete SCI injury (American Spinal Injury Association Impairment Scale [AIS] grade A), with a single neurological level of injury (NLI) from levels T1 to T10) was treated in the DOSED study at UC San Diego Health, and the novel delivery system successfully administered a one-time injection of OPC1. OPC1 clinical development has been supported in part by a $14.3 million grant from the California Institute for Regenerative Medicine (“CIRM”) and we have applied for additional funding from CIRM to support continued clinical development of OPC1 for the treatment of SCI. See “Item 1. Business - Grants from Government Entities,” – Grants from the California Institute for Regenerative Medicine,” in the 2024 10K.

Previous wording

OPC1, an allogeneic oligodendrocyte progenitor cell therapy currently in a Phase 1b, multicenter, open -label safety trial, the DOSED study, which is designed to test the safety and utility of a novel spinal cord delivery device in subacute and chronic SCI patients. OPC1 continues to be evaluated in long-term follow-up from two completed Phase 1 and Phase 1/2a multicenter clinical trials in thoracic and subacute cervical SCI patients.

Current wording

OPC1, an allogeneic oligodendrocyte progenitor cell therapy currently in a Phase 1b, multicenter, open label safety trial, the DOSED study, which is designed to test the safety and utility of a novel spinal cord delivery device in subacute and chronic SCI patients.

Previous wording

Although we have to date focused on neurological and ophthalmic cell types, the pluripotent cells which our platform is based on are capable of becoming any of the cell types of the human body. We currently maintain a list of additional undisclosed product candidates which may be considered for development or partnership in the future, and which altogether cover a range of therapeutic areas and conditions. Generally, these product candidates are based on the same platform technology and employ a similar guided cell differentiation and transplant approach as the product candidates discussed above, but in some cases may also include genetic modifications designed to enhance efficacy and/or safety profiles. We may elect not to develop or partner any of these product candidates.

Current wording

Although we have to date focused on neurological and ophthalmic cell types, the pluripotent cells which our platform is based on are capable of becoming any of the cell types of the human body. We currently maintain a list of additional undisclosed product candidates which may be considered for development or partnership in the future, and which altogether cover a range of therapeutic areas and conditions. Generally, these product candidates are based on the same platform technology and employ a similar guided cell differentiation and transplant approach as the product candidates discussed above, but in some cases may also include genetic modifications designed to enhance efficacy and/or safety profiles. We may elect not to develop, terminate the development of, or not partner any of these product candidates.

Previous wording

All of our manufacturing processes, including cell banking and product manufacturing for our cell therapy product candidates, are conducted by our subsidiary, CCN, at its facility in Jerusalem, Israel, and more than two-thirds of our workforce are CCN employees who are based in the same facility. As of the date of the filing of this report, our operations have not been materially or adversely impacted as a result of the Israeli regional conflict that began in October 2023 nor the broader regional conflict that has developed since.

Current wording

All of our manufacturing processes, including cell banking and product manufacturing for our cell therapy product candidates, are conducted by our subsidiary, CCN, at its facility in Jerusalem, Israel, and more than two-thirds of our workforce are CCN employees based in that facility. As of the date of the filing of this report, our operations have not been materially or adversely impacted as a result of the Israeli regional conflict that began in October 2023 nor the broader regional conflict that has developed since.

Previous wording

As a result of safety concerns and in response to government-imposed restrictions on movement and travel and other precautions taken at the outset of the conflict, our operations at our facilities in Israel were temporarily impacted. Further, a number of the employees in Israel are members of the military reserves and subject to immediate call-up in response to ongoing regional conflict. In addition, the general impact on employees operating in a region of conflict could adversely impact our operations. Although we have business continuity plans in place to address medium- or long-term disruptions that could result from regional instability, any long-term closure of our facilities in Israel, or if those facilities were damaged, or if hostilities otherwise disrupt the ongoing operation of our facilities, or if a meaningful number of employees are unable to work for significant portions of time, our operations would be materially and adversely impacted.

Current wording

As a result of safety concerns and in response to government-imposed restrictions on movement and travel and other precautions taken from time to time since October 2023, our operations at our facility in Israel were temporarily impacted. Further, a number of our employees in Israel are members of the military reserves and subject to immediate call-up. In addition, the general impact on our employees operating in a region of conflict could adversely impact our operations. Although we have business continuity plans in place to address medium- or long-term disruptions that could result from regional instability, any long-term closure of our facility in Israel, or if that facility were damaged, or if hostilities otherwise disrupt our ongoing operations at that facility, or if a meaningful number of our employees are unable to work for significant portions of time, our operations would be materially and adversely impacted.

Previous wording

An accounting policy is deemed critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably likely to occur could materially impact the financial statements. See the discussion under the Critical Accounting Estimates heading in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Result of Operations in the 2024 10-K and our audited financial statements and notes thereto for the year ended December 31, 2024 in Part II, Item 8 of the 2024

Current wording

An accounting policy is deemed critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably likely to occur could materially impact the financial statements. See the discussion under the Critical Accounting Estimates heading in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Result of Operations in the 2024 10-K and our audited financial statements and notes thereto for the year ended December 31, 2024 in Part II, Item 8 of the 2024 10-K for accounting policies and related estimates we believe are the most critical to understanding our condensed consolidated interim financial statements, financial condition and results of operations and which require complex management judgment and assumptions or involve uncertainties. The estimates and judgments involved in our accounting policies as described in our audited financial statements and notes thereto for the year ended December 31, 2024, continue to be our critical accounting policies and there have been no material changes to our critical accounting policies during the six months ended June 30, 2025.

Previous wording

Comparison of Three Months Ended March 31, 2025 and 2024

Current wording

Comparison of Three and Six Months Ended June 30, 2025 and 2024

Previous wording

The following table shows our revenues for the three months ended March 31, 2025 and 2024 (amounts in thousands except percentages):

Current wording

The following table shows our revenues for the periods presented (amounts in thousands except percentages):

Previous wording

For the three months ended March 31, 2025, the $0.1 million increase in total revenues was primarily due to collaboration revenues recognized under the Roche Agreement resulting from continued progress toward completion of the performance obligations, inclusive of updates in the total estimated costs to be incurred under the Roche Agreement. Under the Roche Agreement, delivery is determined to be over time and revenue is recognized utilizing an input method of costs incurred over total estimated costs to complete the performance obligation.

Current wording

For each of the three and six months ended June 30, 2025, the $1.4 million increase in total revenue as compared to the prior year was primarily due to collaboration revenues, of which approximately $0.7 million of the increase for each period was due to more revenue recognized under the Roche Agreement resulting from continued progress toward completion of the performance obligations inclusive of updates in the total estimated costs to be incurred under the Roche Agreement. Additionally, the license agreement with Immunomic Therapeutics, Inc. was terminated and the remaining deferred revenue of approximately $0.7 million was recognized in the current quarter within collaboration revenues. See Note 13 (Commitments and Contingencies) for additional information.

Previous wording

Collaboration revenues may fluctuate from period to period based on changes in estimated costs to support the performance obligations. The collaboration revenue was included within deferred revenue at the beginning of each reporting period. See Note 3 (Revenue) to our condensed consolidated interim financial statements included in this report for additional information.

Current wording

Collaboration revenues from the Roche Agreement may fluctuate from period to period based on changes in estimated costs to support the performance obligations. Under the Roche Agreement, delivery is determined to be over time and revenue is recognized utilizing an input method of costs incurred over total estimated costs to complete the performance obligation. The collaboration revenue recognized each period was included within deferred revenue at the beginning of each reporting period. See Note 3 (Revenue) to our condensed consolidated interim financial statements included in this report for additional information.

Previous wording

Our operating expenses consist of cost of sales, research and development expenses, and general and administrative expenses.

Current wording

Our operating expenses generally consist of cost of royalties, research and development expenses, and general and administrative expenses.

Previous wording

Cost of sales. These expenses consist of costs associated with royalty revenue which has resulted from product sales by our sublicensees.

Current wording

Cost of royalties. These expenses consist of costs associated with royalty revenue which has resulted from product royalties by our sublicensees.

Previous wording

Research and development expenses. These expenses consist of costs incurred for company-sponsored, collaborative and contracted research and development activities. These costs include direct expenses and indirect research-related overhead expenses including compensation and related benefits, stock-based compensation, consulting fees, research and laboratory fees, rent of research facilities, amortization of intangible assets, and license fees paid to third parties to acquire patents or licenses to use patents and other technology. Research and development costs with no future benefit or alternative use are expensed as incurred. Research and development expenses incurred and reimbursed by grants from third parties approximate the grant income recognized in our condensed consolidated statements of operations. Royalties and sublicensing fees are recorded as research and development expenses, unless they are associated with royalties from product sales, which we classify as cost of sales in our condensed consolidated statements of operations. We expect our total research and development expenses to fluctuate each reporting period based on several factors including (i) the stage of development for each cell therapy program, (ii) the availability of resources to work on each program, and (iii) the timing of contractual obligations.

Current wording

Research and development expenses. These expenses consist of costs incurred for company-sponsored, collaborative and contracted research and development activities. These costs include direct expenses and indirect research-related overhead expenses including compensation and related benefits, stock-based compensation, consulting fees, research and laboratory fees, rent of research facilities, amortization of intangible assets, and license fees paid to third parties to acquire patents or licenses to use patents and other technology. Research and development costs with no future benefit or alternative use are expensed as incurred. Research and development expenses incurred and reimbursed by grants from third parties approximate the grant income recognized in our condensed consolidated statements of operations. Royalties and sublicensing fees are recorded as research and development expenses, unless they are associated with product royalties, which we classify as cost of royalties in our condensed consolidated statements of operations. We expect our total research and development expenses to fluctuate each reporting period based on several factors including (i) the stage of development for each cell therapy program, (ii) the availability of resources to work on each program, and (iii) the timing of contractual obligations.

Previous wording

The following table shows our operating expenses for the three months ended March 31, 2025 and 2024 (amounts in thousands, except percentages):

Current wording

The following table shows our operating expenses for the periods presented (amounts in thousands, except percentages):

Previous wording

Research and development expenses. For the three months ended March 31, 2025, the $0.1 million quarter-over-quarter increase in total research and development expenses was mainly attributable to a $0.2 million increase for our preclinical programs, partially offset by a $0.1 million decrease for our other research and development programs.

Current wording

Research and development expenses. For the three and six months ended June 30, 2025, the $0.2 million and $0.3 million increase in total research and development expenses, respectively, as compared to the prior year was primarily driven by our preclinical programs.

Previous wording

General and administrative expenses. For the three months ended March 31, 2025, the $0.1 million quarter-over-quarter decrease in general and administrative expenses was primarily attributable to less costs incurred for services provided by third parties.

Current wording

General and administrative expenses. For the three and six months ended June 30, 2025, the $0.2 million and $0.1 million increase in general and administrative expenses, respectively, as compared to the prior year was primarily attributable to more costs incurred for services provided by third parties.

Previous wording

The following table shows the amount of other income (expenses), net, during the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table shows the amount of other income (expenses), net, for the periods presented (in thousands):

Previous wording

Interest income, net. For the three months ended March 31, 2025, the quarter-over-quarter increase in interest income, net, was de minimis.

Current wording

Interest income, net. For the three and six months ended June 30, 2025, the change in interest income, net, as compared to the prior year was de minimis.

Previous wording

Loss on marketable equity securities, net. We expect our net gain or loss on marketable equitable securities to fluctuate each reporting period based on the changes in the market price of the common stock held by us which could impact our net income or loss reported in our condensed consolidated statements of operations for a particular reporting period. These shares are carried at fair market value on our condensed consolidated balance sheet. See Note 4 (Marketable Securities) to our condensed consolidated interim financial statements included in this report for additional information regarding our marketable equity securities. For the three months ended March 31, 2025 and 2024, Lineage recognized a net loss on marketable equity securities of approximately $5,000 in each quarter, primarily related to changes in the fair market value of the securities during the respective periods.

Current wording

Loss on marketable equity securities, net. We expect our net gain or loss on marketable equitable securities to fluctuate each reporting period based on the changes in the market price of marketable equitable securities held by us which could impact our net income or loss reported in our condensed consolidated statements of operations for a particular reporting period. These marketable equitable securities are carried at fair market value on our condensed consolidated balance sheet. See Note 4 (Marketable Securities) to our condensed consolidated interim financial statements included in this report for additional information regarding our marketable equity securities. For the three and six months ended June 30, 2025 and 2024, Lineage recognized a net loss on marketable equity securities primarily related to changes in the fair market value of such securities during the respective periods.

Previous wording

Change in fair value of warrant liability. The liability-classified warrants issued in connection with the November 2024 registered direct offering (“November 2024 RDO”) are valued at each reporting period end date while the warrants are outstanding using a Black-Scholes option pricing model that maximizes the use of observable inputs and minimizes the use of unobservable inputs to the extent possible. A significant increase or decrease in these inputs could result in significantly higher or lower fair value measurements. The changes in fair value of the liability-classified warrants are recorded in the condensed consolidated statements of operations and we expect this fair value to fluctuate each reporting period. For the three months ended March 31, 2025, the Company recorded a $2.3 million change in the fair value of the warrants. There were no liability-classified warrants outstanding for the three months ended March 31, 2024.

Current wording

Change in fair value of warrant liability. The liability-classified warrants issued in connection with the November 2024 registered direct offering (“November 2024 RDO”) are valued at each reporting period end date while the warrants are outstanding using a Black-Scholes option pricing model that maximizes the use of observable inputs and minimizes the use of unobservable inputs to the extent possible. A significant increase or decrease in these inputs could result in significantly higher or lower fair value measurements. The changes in fair value of the liability-classified warrants are non-cash adjustments recorded in the condensed consolidated statements of operations and we expect this fair value to fluctuate each reporting period. For the three and six months ended June 30, 2025, the change in the fair value of the warrants was primarily driven by an increase in the Company’s common share price during these periods. There were no liability-classified warrants outstanding for the three and six months ended June 30, 2024.

Previous wording

Foreign currency transaction loss, net. Foreign currency transaction loss, net, for each of the three months ended March 31, 2025 and 2024 were approximately $0.2 million and $0.4 million respectively, and consisted of net foreign currency transaction gains and losses primarily recognized by our subsidiaries CCN and ES Cell International Pte. Ltd. (“ESI”). The functional currency of CCN and ESI is the Israeli New Shekel (“ILS”) and the Singapore Dollar (“SGD”), respectively. The majority of the net foreign currency transaction losses were generated by CCN’s intercompany notes payable and notes receivable with Lineage, which is U.S. dollar-denominated. The quarter-over-quarter net decrease in foreign currency transaction losses was the result of the combined impact of: (i) changes in intercompany balances in 2025 as compared to 2024, and (ii) volatility of the ILS and SGD as compared to the U.S. dollar during 2025 and 2024.

Current wording

Foreign currency transaction gain (loss), net. Foreign currency transaction gain (loss), net primarily results from currency fluctuations applied to our subsidiary’s U.S. dollar-denominated intercompany balances with Lineage. The functional currency of our subsidiaries, CCN and ES Cell International Pte. Ltd. (“ESI”), is the Israeli New Shekel (“ILS”) and the Singapore Dollar (“SGD”), respectively. The foreign currency transaction gains recorded during the three and six months ended June 30, 2025 was driven by a strengthening of the ILS and SGD during the period as compared to the U.S. Dollar, while the losses incurred during the three and six months ended June 30, 2024 resulted from a weakening of the ILS and SGD as compared to the U.S. Dollar.

Previous wording

Other income (expenses), net. For the three months ended March 31, 2025, the Company recorded $0.2 million related to the allocated transaction costs for warrants issued in connection with the second closing of the November 2024 RDO. No comparable expense was recorded in the prior year.

Current wording

Other income (expenses), net. For the six months ended June 30, 2025, the Company recorded $0.2 million related to the allocated transaction costs for warrants issued in connection with the second closing of the November 2024 RDO. No comparable expense was recorded in the six months ended June 30, 2024.

Previous wording

As of March 31, 2025, our accumulated deficit was $407.6 million. For the three months ended March 31, 2025, we incurred a loss from operations of $6.5 million and had negative cash flow from operations of $4.9 million. Since inception, we have incurred significant operating losses and we expect to continue to incur significant operating losses for the foreseeable future.

Current wording

As of June 30, 2025, our accumulated deficit was $438.1 million. For the six months ended June 30, 2025, we incurred a loss from operations of $26.3 million and had negative cash flow from operations of $10.4 million. Since inception, we have incurred significant operating losses and we expect to continue to incur significant operating losses for the foreseeable future.

Previous wording

As of March 31, 2025, we had $47.9 million in cash, cash equivalents and marketable securities. During the three months ended March 31, 2025 we raised approximately $5.4 million in net proceeds from the second closing of the November 2024 RDO. We may receive up to an additional $36 million in gross proceeds upon the full cash exercise of OpRegen clinical milestone-linked warrants which each have an exercise price of $0.91 per share, that were issued in the November 2024 RDO. However, no assurances can be given that any portion of such warrants will be exercised, or if exercised, that they will be exercised on a cash basis.

Current wording

As of June 30, 2025, we had $42.3 million in cash, cash equivalents and marketable securities. In January 2025, we raised approximately $5.4 million in net proceeds from the second closing of the November 2024 RDO. We may receive up to an additional $36 million in gross proceeds upon the full cash exercise of OpRegen clinical milestone-linked warrants we issued to the investors in the November 2024 RDO, which each have an exercise price of $0.91 per share. However, no assurances can be given that any portion of such warrants will be exercised, or if exercised, that they will be exercised on a cash basis.

Previous wording

During the three months ended March 31, 2025, no shares were issued or sold under our at-the-market offering program. As of March 31, 2025, $39.97 million remained available for sale under our at-the-market offering program. See Note 10 (Shareholders’ Equity) to our condensed consolidated interim financial statements included in this report for additional information regarding our at-the-market offering program.

Current wording

During the six months ended June 30, 2025, no shares were issued or sold under our at-the-market offering program. As of June 30, 2025, $39.97 million remained available for sale under our at-the-market offering program. See Note 10 (Shareholders’ Equity) to our condensed consolidated interim financial statements included in this report for additional information regarding our at-the-market offering program.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2025 was $4.9 million and consisted of a net loss of $4.1 million plus the net changes in operating assets and liabilities of approximately $0.3 million and $0.5 million in non-cash adjustments. The net changes in operating assets and liabilities was primarily due to a $1.3 million reduction in deferred revenues, partially offset by $1.1 million increase in accounts receivable and prepaid expenses and other current assets. The non-cash adjustments were primarily due to the change in the fair value of the warrant liability, partially offset by stock-based compensation and depreciation.

Current wording

Net cash used in operating activities for the six months ended June 30, 2025 was $10.4 million and consisted of a net loss of $34.5 million plus the net changes in operating assets and liabilities of approximately $2.6 million, partially offset by $26.7 million in non-cash adjustments. The net changes in operating assets and liabilities were primarily due to a $3.8 million reduction in deferred revenues, partially offset by a $1.3 million increase in prepaid expenses and other current assets. The non-cash adjustments were primarily due to a $10.4 million change in the fair value of the warrant liability as well as a $14.8 million loss on impairment of our IPR&D intangible asset related to the VAC platform.

Previous wording

Net cash used in operating activities was $5.8 million for the three months ended March 31, 2024, which primarily reflects the loss from operations of $6.7 million plus the changes in operating assets and liabilities of $0.9 million. These items were offset by the non-cash expenses of $1.2 million for stock-based compensation and $0.2 million for depreciation and amortization. The foreign currency remeasurement had no effect on cash flows.

Current wording

Net cash used in operating activities was $11.0 million for the six months ended June 30, 2024, which primarily reflects the loss from operations of $12.5 million plus the changes in operating assets and liabilities of $2.0 million. These items were partially offset by the non-cash expenses of $2.4 million for stock-based compensation and $0.3 million for depreciation and amortization.

Previous wording

Cash provided by investing activities for the three months ended March 31, 2025 was $1.9 million and primarily consisted of maturities of U.S. Treasury securities.

Current wording

Cash provided by investing activities for the six months ended June 30, 2025 was $1.9 million and primarily consisted of maturities of U.S. Treasury securities.

Previous wording

Cash used in investing activities for the three months ended March 31, 2024 was $38,000 which was for the purchase of equipment.

Current wording

Cash used in investing activities for the six months ended June 30, 2024 was $8.8 million which was primarily from the purchase of U.S. Treasury securities.

Previous wording

Cash provided by financing activities for the three months ended March 31, 2025 was $5.0 million and primarily consisted of net proceeds from the sale of our common shares with warrants in the November 2024 RDO, partially offset by principal payments against our financed insurance liability.

Current wording

Cash provided by financing activities for the six months ended June 30, 2025 was $4.7 million and primarily consisted of net proceeds from the sale of our common shares and warrants in the November 2024 RDO, partially offset by principal payments against our financed insurance liability.

Previous wording

Cash provided by financing activities for the three months ended March 31, 2024 was $14.0 million and primarily consisted of net proceeds from the sale of our common shares in the February 2024 registered direct offering and from the sale of our common shares under our at-the-market offering program.

Current wording

Cash provided by financing activities for the six months ended June 30, 2024 was $14.1 million and primarily consisted of net proceeds from the sale of our common shares in the February 2024 RDO and from the sale of our common shares under our at-the-market offering program.

Previous wording

Our financial obligations primarily consist of obligations to our licensors under license agreements, obligations related to grants received from government entities, including the IIA, obligations under vendor contracts for research services and other purchase commitments with suppliers.

Current wording

Our financial obligations primarily consist of obligations to our licensors under license agreements, obligations related to grants received from government entities, including the Israel Innovation Authority (“IIA”), obligations under vendor contracts for research services and other purchase commitments with suppliers.

Previous wording

We have received grants under the Innovation Law and are required to pay royalties to the IIA from the revenues generated from the sale of product candidates and related services developed, in whole or in part pursuant to, or as a result of, a research and development program funded by the IIA. Under the Innovation Law, we are also required to pay redemption fees to the IIA. To date, through a series of separate grants beginning in 2007, CCN has received a total of $15.4 million from the IIA to support the OpRegen program. We are obligated to pay approximately 24.1% of any future payments we may receive under the Roche Agreement to the IIA, up to an aggregate cap on all payments to IIA, such cap growing over time via interest accrual until paid in full. As of March 31, 2025, the aggregate cap amount was approximately $95.9 million. Redemption fees due to the IIA under the Innovation Law are due upon receipt of any milestone payments and royalties received under the Roche Agreement. As of March 31, 2025, we have not included any future financial obligations due to the IIA under the Innovation Law in the accompanying unaudited condensed consolidated balance sheet because the achievement and timing of the events that would require future payments to the IIA under the Innovation Law is not fixed and determinable. See Note 13 (Commitments and Contingencies) to our condensed consolidated interim financial statements included in this report for additional information.

Current wording

We have received grants under the Innovation Law and are required to pay royalties to the IIA from the revenues generated from the sale of product candidates and related services developed, in whole or in part pursuant to, or as a result of, a research and development program funded by the IIA. Under the Innovation Law, we are also required to pay redemption fees to the IIA. To date, through a series of separate grants beginning in 2007, CCN has received a total of $15.4 million from the IIA to support the OpRegen program. We are obligated to pay approximately 24.1% of any future payments we may receive under the Roche Agreement to the IIA, up to an aggregate cap on all payments to IIA, such cap growing over time via interest accrual until paid in full. As of June 30, 2025, the aggregate cap amount was approximately $96.4 million. Redemption fees due to the IIA under the Innovation Law are due upon receipt of any milestone payments and royalties received under the Roche Agreement. As of June 30, 2025, we have not included any future financial obligations due to the IIA under the Innovation Law in the accompanying unaudited condensed consolidated balance sheet because the achievement and timing of the events that would require future payments to the IIA under the Innovation Law is not fixed and determinable. See Note 13 (Commitments and Contingencies) to our condensed consolidated interim financial statements included in this report for additional information.

Previous wording

As of March 31, 2025, under the terms of the leases for the facilities from which CCN and Lineage operate, a total of $2.3 million of rent payments will become due, of which $0.9 million will become due in the remainder of 2025.

Current wording

As of June 30, 2025, under the terms of the leases for the facilities from which CCN and Lineage operate, a total of $2.0 million of rent payments will become due, of which $0.6 million will become due in the remainder of 2025.

Previous wording

We believe that our $47.9 million in cash, cash equivalents and marketable securities at March 31, 2025, will be sufficient to fund our planned operations through at least twelve months from the issuance date of our condensed consolidated interim financial statements included elsewhere in this report. We believe we will meet our longer-term expected future cash requirements and obligations with our current cash and cash equivalents, milestone and other payments we expect to receive under our collaboration agreements, and proceeds we receive from sales of our common shares under our at-the-market offering program.

Current wording

We believe that our $42.3 million in cash, cash equivalents and marketable securities at June 30, 2025, will be sufficient to fund our planned operations through at least twelve months from the issuance date of our condensed consolidated interim financial statements included elsewhere in this report. We believe we will meet our longer-term expected future cash requirements and obligations with our current cash and cash equivalents, milestone and other payments we expect to receive under our collaboration agreements, and proceeds we receive from sales of our common shares under our at-the-market offering program.