LCTX 10-K & 10-Q changes, risk factors and insider trading

An investment in our common shares involves a high degree of risk. You should carefully consider all the risk factors described below, as well as the other information in this report, when evaluating our business and before deciding whether to purchase, hold or sell our common shares. Each of these risk factors, as well as additional risks not presently known to us or that we currently consider immaterial, could harm our business, financial condition, results of operations and/or growth prospects, as well as adversely affect the market price of our common shares, in which case you may lose all or part of your investment. The matters described below reflect our beliefs and views as to factors, events or contingencies that could materially and adversely affect our business, financial condition, results of operations, and growth prospects, and/or the price of our common shares in the future. References in this section to past events or conditions are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not the factors, events or contingencies discussed below have occurred in the past or their likelihood of occurring in the future.

We are dependent on our third-party collaboration with Roche to develop and commercialize OpRegen. If Roche is not successful in developing and commercializing OpRegen and/or Roche terminates the collaboration, we will lose a significant source of potential revenue.revenue, further development of OpRegen may be significantly delayed or terminated and its commercial potential could be significantly diminished. Additionally, if OpRegen is not successful, prospects for our other product candidates and our business could be significantly harmed.

OpRegen is our lead cell therapy program. We currently have a collaboration and license agreement with Roche, pursuant to which we license to Roche rights to develop and commercialize our retinal pigment epitheliumepithelial (“RPE”) cell therapies, including OpRegen (the “Licensed Products”), for the treatment of ocular disorders, including age-related macular degeneration with geographic atrophy. Roche is obligated to pay us milestone payments upon the achievement of specified developmental, regulatory and commercialization milestones. In addition, Roche is obligated to pay us royalties upon sales of the Licensed Products, if any. All regulatory and commercial milestone payments and royalty payments are subject to the existence of certain intellectual property rights that cover OpRegen at the time such payments would otherwise become due, and the royalties on net sales of OpRegen are subject to financial offsets based on the existence of competing products.

We are exposed to numerous risks associated with the Roche agreement,Agreement, including Roche having sole control over the clinical development and commercialization of any Licensed Products developed under the agreement. The Roche agreementAgreement also prevents us from developing or commercializing retinal pigment epitheliumRPE cell therapies for the treatment of ocular disorders on our own or with any third party. Our collaboration with Roche involves risks that are different from the risks associated with independently advancing product candidates, including that Roche may have or develop economic or business interests that are inconsistent with ours; take actions contrary to our requests or objectives; take actions that reduce our return on investment for this collaboration; or take actions that harm our reputation.

Roche’s degree of control of the collaboration, clinical development and commercialization efforts may impact the payment amounts that we receive under the Roche agreement.Agreement. For example, Roche may suspend development of OpRegen or other product candidates covered by the Roche agreementAgreement or decide not to pursue commercialization of OpRegen or such other product candidates at all, or it may agree to pay royalties to third parties or adopt a pricing model that reduces the amount of royalties we might otherwise expect. For example, in 2024, Roche announced that it decided to halt the development of some of its programs on the basis that such programs did not provide sufficient grounds for Roche to continue investing in the candidate.

We are expecting Roche to develop and commercialize the Licensed Products, and if Roche is not able to develop and commercialize the Licensed Products, determines not to continue to pursue development and commercialization of the Licensed Products, or determines to terminate the collaboration at any time in its sole discretion, which it has the right to do, we will not receive any future milestone or royalty payments under the agreement which would harm our business, business prospects, financial condition and results of operations. Even if Roche develops and commercializes the Licensed Products, Roche may not do so on the timelines we expectexpect, or which align with our internal business needs, and the Licensed Products may not be commercially successful, each of which could harm our business, business prospects, financial condition and results of operations.

delays in development, manufacture or clinical supply of OpRegen (see the risk factor titled, “The manufacture of our cell therapy product candidates is complex, highly regulated and subject to a multitude of risks. We have limited experience manufacturing our product candidates on a clinical scale and no experience manufacturing on a commercial scale. Roche also has limited experience manufacturing OpRegen in a research and development setting, and no experience manufacturing it on a clinical or commercial scale. Any failure to manufacture our product candidates in sufficient quantities in accordance with applicable quality standards and regulatory requirements and at acceptable costs, may result in significant clinical development delays or impair our ability, or that of a strategic collaborator, to obtain approval for or commercialize our product candidates,” below);

the failure to develop a formulation and/or manufacturing process for OpRegen that Roche believes is commercially viable in a timely manner, or at all; or the loss or impairment of intellectual property rights related to OpRegen.

In addition, we are required under the Roche agreementAgreement to transfer certain manufacturing process know-how to Roche to facilitate manufacture of OpRegen and other potential Licensed Products for clinical trials and commercialization. Transferring manufacturing testing and processes and know-how is complex and involves review and incorporation of both documented and undocumented processes that may have evolved over time. We have never completed such transfer and we can give no assurances that we will be successful in doing so. In addition, transferring production to different facilities may require utilization of new or different processes to meet the specific requirements of a given facility. We and Roche will need to conduct significant development work to transfer these processes. In addition, we may be required to demonstrate the comparability of the cells generated by Roche withwill need to be demonstrated to be comparable to the cells we previously produced and used in testing. See the risk factor below titled, “Changes in or disruptions to our manufacturing operations could materially and adversely affect our business.” Any failure or delay in the successful transfer of manufacturing process know-how to Roche or the inability of Roche to manufacture comparable cells could halt or delay the continued development of OpRegen and other potential Licensed Products.

Our total operating losses for the fiscal years ended December 31, 20242025 and 20232024 were $21.5$36.6 million and $24.7$21.5 million, respectively, and we had an accumulated deficit of $403.5$467.0 million as of December 31, 2024.2025. Since inception, we have incurred significant operating losses and we expect to continue to incur significant operating losses for the foreseeable future. Unless and until we or a third-party collaborator succeed in developing, obtaining regulatory approval for, and generating substantial revenue from sales of one or more of our product candidates, we do not expect to become profitable. All of our product candidates will require substantial additional development time and resources before we or any collaborator would be able to apply for or receive any regulatory approval to market and sell a product, and the timeline for and outcome of these development efforts is highly uncertain. In addition, our current strategy includes further investment in our AlloSCOPE manufacturing platform and leveraging that platform and our other technology and know-how to expand our product candidate pipeline. Any new development program will likewise require substantial additional time and resources by us and/or a collaborator before we or any collaborator would be able to apply for marketing approval, and likewise be subject to significant uncertainty. We anticipate our operating losses will increase substantially as we continue our development of, seek regulatory approval for and potentially commercialize our product candidates and seek to identify, assess, acquire, in-license or develop additional product candidates. We may never achieve profitability.

To become and remain profitable, we must succeed in developing and eventually commercializing products that generate significant revenue. This will require us and our collaborators to be successful in a range of challenging activities, including completing clinical and nonclinical studies of our product candidates, obtaining regulatory approval for these product candidates, manufacturing, marketing, and selling any approved products, and satisfying any post-marketing regulatory requirements. We are attempting to develop new technology and therapeutic products.products and we and our collaborators must overcome significant challenges to develop, manufacture, and commercialize our product candidates. Cell therapy is a nascent field with limited regulatory approval precedent, which makes it difficult to predict the time and cost of product candidate development and seeking regulatory approval. The regulatory pathway with the FDA and comparable foreign regulatory authorities may be more complex, time-consuming, and unpredictable relative to more well-known therapeutic approaches. We and our collaborators may never succeed in these activities and, even if we do, may never generate revenues that are significant enough for us to achieve profitability. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business, or continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.

obtaining regulatory approval, as the regulatory frameworks for approval of potential allogeneic cell therapiestherapy products and products created with gene-editing technology in and outside of the U.S. are evolving;

obtaining sufficient product coverage and reimbursement from third-party payors such as government healthcare administration authorities and private healthcare insurers for any approved product to enable the product to compete in the marketplace and become commercially profitable; and obtaining and maintaining meaningful intellectual property protection for our product candidates, the operationsprocess used to manufacture them and the methods for using them in order to prevent third parties from making, using, selling, offering to sell or importing our product candidates or otherwise exploiting our cell manufacturing processes.

If we and our collaborators are not successful in addressing key challenges in development and commercialization of our cell therapy product candidates, or if our product candidates and technologies do not prove to be safe or effective for the indications for which they are being developed, our business prospects and revenue opportunities will be materially limited.

We will continue to spend a substantial amount of our capital on research and development, but we might not succeed in identifying or developing product candidates that are safe and effective for their target indications or are commercially viable.

As discussed elsewhere in this report, we issued warrants to purchase an aggregate of up to 41,447,372 of our common shares in connection with our November 2024 registered direct offering. Warrants to purchase up to 39,473,688As of ourthe commonfiling shares have an exercise pricedate of $0.91this per share andreport, warrants to purchase up to 1,973,684approximately of35.2 ourmillion common shares haveremain anoutstanding exerciseand, priceif of $0.95 per share, in each case, subject to customary adjustments. If thethose warrants are exercised in full on a cash basis, we would receive $37.8$32.1 million in gross proceeds. As of the filing date of this report, the trading price of our common shares is below the exercise prices of the warrants, andHowever, no assurances can be given that all or any portion of such warrants will be exercised, or if exercised, that they will be exercised on a cash basis. See also the risk factor below titled “The issuance of common shares upon exercise of warrants will cause immediate and substantial dilution to existing shareholders.”

number, scope, progress and results of our ongoing and planned preclinical studies, clinical trials, and nonclinical activities for our product candidates;

changes in laws or regulations applicable to our product candidates,candidates and the delivery systems or other tools required for transplant of the cells, including but not limited to clinical trial and manufacturing requirements for approval;

We may seek additional capital through a variety of means, including equity offerings, debt financings or other third-party funding, including grants or new strategic alliances and licensing or collaborations. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a shareholder. Any debt capital financing may involve covenants that restrict our operations, including limitations on additional borrowing and on the use of our assets and may also include equity components, such as warrants, which could cause your ownership interests to be diluted. If we raise capital through upfront payments or milestone payments pursuant to strategic collaborations with third parties, we may have to relinquish valuable rights to our product candidates and technology or grant licenses on terms that are not favorable to us compared to if we developed and commercialized a product candidate without a strategic collaboration. Any such arrangements may be dilutive to our ownership or economic interest in the products we develop, and we might have to accept royalty payments on product sales rather than receiving the gross revenues from product sales. See, for example, the terms of our agreementagreements with Roche to develop and commercialize OpRegen.OpRegen and with William Demant Invest 2 Aps (WDI) to advance preclinical development of ReSonance. Grants from third parties may involve covenants that restrict our operations, require us to relinquish valuable rights in our products, technology and other intellectual property and may be dilutive to our economic interest in products and technologies we develop with such funding. For example, as discussed in Note 13 (Commitments and Contingencies) to our consolidated financial statements included in this report, pursuant to the terms of grants received by Cell Cure Neuroscience Ltd. (“CCN”) from the Israeli government, there are limitations on our ability to manufacture products and transfer or license technologies outside of Israel and considerable contingent financial obligations to the IIA with respect to products, technologies and intellectual property developed with the support of IIA grant funding, which includes the OpRegen program, and, as discussed below in this Risk Factors section, pursuant to the terms of a grant we received from CIRM in support of clinical development of OPC1, we have royalty payment obligations to CIRM based on net sales of products developed with the support of CIRM funding, if any.

We have multiple cell therapy programs in development and limited resources. In addition, we 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. We have and may continue to expand our research and development efforts into therapeutic areas and conditions outside of our initial focus in neurology and ophthalmology and where we have limited experience. We also have contractual commitments to conduct certain manufacturing and development activities, and do not have unilateral discretion to vary from such efforts. As a result, we may forego or delay pursuit of existing or new development opportunities that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. For example, we may invest our resources in a limited number of more advanced programs in the shorter term and reduce our investment in promising earlier stage programs. Such decisions would require us to limit the breadth and diversity of our product candidate pipeline, which could potentially limit the long-term growth of our product portfolio and subject us to greater risk that the failure of any such programs would harm our prospects. Alternately, we may delay or abandon more advanced programs to increase investment in promising earlier stage programs. Our spending on current and future research and development programsprograms, manufacturing technology, and product candidates may not yield any commercially viable products. If we do not accurately evaluate the clinical or commercial potential or target market for a particular product candidate, we may focus our resources on product candidates that do not demonstrate successful preclinical or clinical results or commercial viability at the expense of other programs that may have had greater success, or relinquish valuable rights to that product candidate through future collaborations, licenses and other similar arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

Our business depends on several critical technologies that are based in part on technology as well as cell lines licensed from third parties. Those third-party license agreements impose obligations on us, including payment obligations and obligations to pursue development of commercial products under the licensed patents or technology. If a licensor believes that we have failed to meet our obligations under a license agreement, the licensor could seek to limit or terminate our license rights, which could lead to costly and time-consuming litigation and, potentially, a loss of the licensed rights. During the period of any such litigation, our ability to carry out the development and commercialization of potential products, and our ability to raise any capital that we might then need, could be significantly and negatively affected. If our license rights were restricted or ultimately lost, we would not be able to continue to use the licensed technology in our business. Our license agreements are discussed in more detail under “Licensed Technology and Product Development Agreements” in Item 1. “Business” above.

In addition, we may not be able to successfully integrate any acquired personnel, operations and technologies, or effectively manage the combined business following an acquisition. Acquisitions could also result in dilutive issuances of equity securities, the use of our available cash, or the incurrence of debt, which could harm our operating results. We also face risk of shareholder lawsuits in connection with acquisitions that can divert management’s focus from operating our business and result in significant legal and other expenses, which could harm our operating results and financial condition. For example, in 2023, we settled a putative shareholder class action lawsuit relating to our acquisition of Asterias after more than three years of litigation. See Note 13 (Commitments and Contingencies) to our consolidated financial statements included in thisour report.annual report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 10, 2025. In addition, if an acquired technology, product candidate or other asset or business fails to meet our expectations, our business, financial condition and results of operations may be negatively affected. Additional risks we may face in connection with acquisitions include:

WeWe, or our collaborators, suppliers, CROs, other service providers, or other third parties on which we relyrely, may experience interruptions tothat could significantly disrupt or harm our operations, including the conduct of our research and development programs, clinical trials, and manufacturing operations, due to natural disasters, public health emergencies, geopolitical conflicts, political and economic instability, acts of terrorism, or hardware, software, telecommunication or electrical failures, which could significantly disrupt or harm our business.failures.

Currently, all of our cGMP 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. Accordingly,In politicaladdition, andcertain economicof conditionsthe clinical trial sites for the OpRegen GAlette study are in Israel and terrorist attacks, cyberattacks, war or other armed conflicts involving Israel could directly affect our business.Israel.

Our business strategy isaims to efficiently leverage our technologyAlloSCOPE platform and our development and manufacturing capabilitiesexpertise to create a pipeline of related but discrete cell-based assets, some of which we may advance our programs internally ortoward incommercialization conjunctionand withsome strategicof partnerswhich we may seek to furtherpartner during early or late development, if we believe doing so will enhance their value to us and probability of success.success and value to Lineage and our shareholders.

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 samethat facility. AsIn addition, certain of the dateclinical oftrial sites for the filingOpRegen ofGAlette thisstudy report, our operations have not been materially or adversely impacted as a result of the Israeli regional conflict that beganare in October 2023 nor the broader regional conflict that has developed since.Israel.

As a result of safety concerns and in response to government-imposed restrictions on movement and travel and other precautions taken atto address the outsetIsraeli ofregional theconflict conflict,that began in October 2023, our operations at our facilitiesCCN facility in IsraelJerusalem were temporarily impacted.impacted in the past. In light of the recent escalation of hostilities and conflict in the Middle East, we expect that similar government-imposed restrictions on movement and travel and other precautions will be implemented, which could materially and adversely affect the operations at our Jerusalem facility. Further, a number of theour CCN employees in Israel are members of the military reserves and subject to immediate call-up in response to ongoing regional conflict.instability. Male Israeli citizens are obligated to perform several days, and in some cases more, of annual military reserve duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event of a military conflict, may be called to active duty. Several employees in Israel, including CCN’s chief executive officer, were activated for military duty in the past, and they and other employees may be activated for military duty in the future, particularly in light of the recent escalation of hostilities and conflict in the Middle East, which could disrupt our operations. 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, those plans are limited and do not account for every possible scenario, and in addition, any long-term closure of our facilitiesCCN in Israel,facility, or if thosethat facilitiesfacility were damaged, or if hostilities otherwise disrupt the ongoing operationoperations ofat ourthat facilities,facility, or if a meaningful number of employees are unable to work for significant portions of time, our operations would be materially and adversely impacted.

Critical Accounting Policies and Estimates

Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed in the acquisition transaction. Goodwill is tested for impairment in accordance with Accounting Standards Update ("ASU") 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In-process research and development (“IPR&D”) assets are indefinite-lived intangible assets until the completion or abandonment of the associated research and development (“R&D”) efforts. Once the R&D efforts are completed or abandoned, the IPR&D will either be amortized over the asset’s estimated life as a finite-lived intangible asset or be impaired, respectively, in accordance with ASC Topic 350, Intangibles – Goodwill and Other ("ASC 350"). In accordance with ASC 350, goodwill and acquired IPR&D are determined to have indefinite lives and, therefore, are not amortized. Instead, they are tested for impairment at least annually and between annual tests if we become aware of an event or a change in circumstances that would indicate the asset may be impaired. For further information, see Note 6 (Goodwill and Intangible Assets, Net) and Note 13 (Commitments and Contingencies) in the accompanying notes to the consolidated financial statements included in this report.

LineageWe accountsaccount for income taxes in accordance with ASC Topic 740, Income Taxes ("ASC 740"), which prescribes the use of the asset and liability method, whereby deferred tax asset or liability account balances are calculated at the balance sheet date using current tax laws and rates in effect. Valuation allowances are established when necessary to reduce deferred tax assets when it is more likely than not that a portion or all of the deferred tax assets will not be realized. ASC 740 guidance also prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For benefits to be recognized, a tax position must be more-likely-than-not sustainable upon examination by taxing authorities. LineageWe filesfile a U.S. federal income tax return as well as California combined and foreign income tax returns. Lineage’sOur judgments regarding future taxable income may change over time due to changes in market conditions, changes in tax laws, tax planning strategies or other factors. If Lineageour assumptions, and consequently the estimates, change in the future with respect to Lineage’sour own deferred tax assets and liabilities, the valuation allowance may be increased or decreased, which may have a material impact on Lineage’sour consolidated financial statements. Lineage recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense; however, no amounts were accrued for the payment of interest and penalties as of December 31, 20242025 and 2023.2024. We provided a reserve against our federal and California research and development credits generated. The carryforward amounts for these credits have been reported net of these reserves. Accordingly, no accrued interest and penalties related to unrecognized tax benefits have been recorded as of December 31, 20242025 and 2023.2024. For further information, see Note 12 (Income Taxes) in the accompanying notes to the consolidated financial statements included in this report.

TheWe Company accountsaccount for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s common shares, whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance. Liability and equity-classified warrants are valued using a Black-Scholes option pricing model at issuance, and for liability-classified warrants, upon warrant exercise, and at each reporting period end date while the warrants are outstanding. Changes in fair value of liability-classified warrants are recorded in the consolidated statements of operations.

Collaboration revenues may fluctuate from period to period based on changes in estimated costs to support the performance obligations. TheUnder the collaboration revenueagreements waswith includedRoche withinand deferredWDI, delivery is determined to be over time and revenue atis recognized utilizing an input method of costs incurred over total estimated costs to complete the beginningperformance of each reporting period.obligation. See Note 3 (Revenue) to our condensed consolidated financial statements included in this report for additional information.

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

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

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 consolidated statements of operations. Royalties and sublicensing fees are recorded as research and development expenses, unless they are associated with royalties from product sales,royalties, which we classify as cost of salesroyalties in our 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.

General and administrative expenses. These expenses consist of employee and director compensation and related benefits, including stock-based compensation, for executive and corporate personnel, professional and consulting fees, and allocated overhead such as facilities rent and equipment rent and maintenance, insurance costs allocated to general and administrative expenses, costs of patent applications, prosecution and maintenance, stock exchange-related costs, depreciation expense, marketing costs, legal and accounting costs, and other miscellaneous expenses.

GeneralResearch and administrativedevelopment expenses. For the twelve months ended December 31, 2024,2025, the $0.9$5.3 million year-over-year increase in generaltotal research and administrativedevelopment expenses wasis primarilymainly attributable to: (i) a $0.6$1.6 million increase infor stock-basedour compensationOpRegen program; (ii) a $0.4$0.7 million increase infor personnelour costsANP1 program; (iii) a $0.2 million increase for our OPC1 program; and (iiiiv) partially offset by a $0.1$2.8 million overall decrease in costs incurredincrease for servicesour providedpreclinical byand thirdother parties.undisclosed programs.

Interest income, net. Interest income was greater forFor the yeartwelve months ended December 31, 20242025 as compared to the prior yearyear, primarilythe due to a nominal increasechange in interest ratesincome, andnet, averagewas cashde investment balances during 2024 .minimis.

MarketableLoss 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 themarketable commonequitable stocksecurities held by us which could impact our net income or loss reported in our consolidated statements of operations for a particular reporting period. These sharesmarketable equitable securities are carried at fair market value on our consolidated balance sheet. See Note 4 (Marketable Securities) to our consolidated financial statements included in this report for additional information regarding our marketable equity securities. For the twelve months ended December 31, 20242025 andas 2023,compared Lineageto recognizedthe aprior netyear, lossthe onchange in the values of our marketable equity securities ofwas $8,000de and $176,000, respectively, primarily related to changes in the fair market value of the securities during the respective periods.minimis.

Change in fair value of warrant liability. The liability-classified warrants issued in November 2024 and January 2025 in connection with the November 2024 registered direct offering (“November 2024 RDO”) are valued at issuance, at each reporting period end date while the warrants are outstandingoutstanding, and at the time of each warrant exercise, 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 consolidated statements of operations and we expect this fair value to fluctuate each reporting period. For the yeartwelve months ended December 31, 2024,2025 as compared to the Companyprior recordedyear, a $2.1 millionthe change in the fair value of the warrants. Therewarrants was noprimarily comparabledriven changeby recordedfluctuations in 2023.the Company’s common share price during the period.

Foreign currency transaction loss,gain(loss), net. Foreign currency transaction loss,gain (loss), net, for each of the years ended December 31, 20242025 and 20232024 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. For the years ended December 31, 2024 and 2023, the net foreign currency transaction losses were $0.3 million and $0.5 million, respectively. The majority of the net foreign currency transaction gains (losses) were generated by CCN’s intercompany notes payable and notes receivable with Lineage, which is U.S. dollar-denominated. The year-over-year net decreaseincrease in foreign currency transaction lossesgain was the result of the combined impact of: (i) changes in intercompany balances in 20242025 as compared to 2023,2024, and (ii) volatility of the ILS and SGD as compared to the U.S. dollar during 20242025 and 2023.2024.

As of December 31, 2024,2025, we had $55.8 million in cash, cash equivalents and marketable securities and our accumulated deficit was $403.5$467.0 million. For the year ended December 31, 2024,2025, we incurred a loss from operations of $21.5$36.6 million and had negative cash flow from operations of $23.1$18.9 million. Since inception, we have incurred significant operating losses and we expect to continue to incur significant operating losses for the foreseeable future.

Cash (Used In) Provided by Investing Activities

Our development programs are based on our proprietary, in-house, cell-based manufacturing platform, which we call AlloSCOPE™ (Allogeneic, Scalable, Consistent, Off-the-shelf, Pluripotent Cell Engineering), and supported by our associated development, formulation, manufacturing, and delivery capabilities. The AlloSCOPE platform is a proprietary differentiation and production modality from which, i) a single, well-characterized pluripotent cell line can create a stable current Good Manufacturing Practice (cGMP) master cell bank (MCB), ii) a vial from our MCB can create a cGMP working cell bank (WCB), and iii) a vial from our WCB can create several hundred to many thousands ofthousand vials of a final, allogeneic cell-based product, ready for patient dosing. This process can confer consistent, cost-effective, and scalable cell-based production. Importantly, the AlloSCOPE platform can be applied across multiple programs, which we believe could offer advantages in the pursuit of commercially successful, allogeneic and “off the shelf” cell therapies. In some instances, we also apply a proprietary “thaw-and-inject” formulation into our product profiles, which allows for rapid dosing and “immediate use” of our cells. This formulation technology can greatly reduce the lengthy dose preparation steps often associated with certain cell therapy programs. AlloSCOPE “5D” is an application of our AlloSCOPE platform, with the goal of generating large-scale production of pre-differentiated cells with reduced manipulation and passaging, and has been deployed across selected preclinical programs to date.

Our business strategy aims to efficiently leverage our AlloSCOPE platform and our development and manufacturing expertise to create a pipeline of related but discrete cell-based assets, some of which we may advance internally toward commercialization and some of which we may seek to partner during early or late development, if we believe doing so will enhance their probability of success and add value to Lineage and our shareholders. In some cases, the cells we manufacture or plan to manufacture have a clear clinical precedent from cadaveric sources, such as the use of corneal endothelial cells to improve vision in patients with Fuchs’ corneal dystrophy or the well-established use of islet cells to achieve insulin independence in patients with Type 1 Diabetes or corneal endothelial cells to improve vision in patients with Fuchs’ corneal dystrophy,Diabetes, each leadingindication toalready having approved products or procedures.procedures in certain jurisdictions. In other cases, the utility of replacing a specific cell or related cells isstill notneeds yetto be established. All of our product candidates are based on our core AlloSCOPE platform, and utilize our extensive expertise in the directed differentiation and scalable production of pluripotent cells into discrete cell types of the human body.

OpRegen (RG6501), our most clinically advanced program, an allogeneic retinal pigmented epithelial (RPE) cell replacement therapy currently in Phase 2a development under a worldwide collaboration and license agreement with F. Hoffmann-La Roche Ltd. and Genentech, Inc., a member of the Roche Group (collectively or individually, “Roche” or “Genentech”), for the treatment of geographic atrophy (GA) secondary to dry age-related macular degeneration (dry-AMD).

COR1, an allogeneic cell corneal endothelial cell (CEnC) transplant therapy candidate currently in preclinical development for the treatment of corneal endothelial disease, with applicable indications expected to include Fuchs Endothelial Corneal Dystrophy (FECD) and Bullous Keratopathy.

ILT1, a pluripotent cell manufacturing initiative, intended to support the large-scale production of undifferentiated pluripotent cells, which if successful at a large scale, and togetherapplied with anto islet cell differentiation protocol,differentiation, could support cell transplant treatment candidate for Type 1 Diabetes (T1D).

OpRegen is currently being evaluated by Roche and Genentech in a Phase 2a multicenter clinical trial in patients with GA secondary to dry-AMD, the “GAlette” study, which is currently enrollingopen upand to 60 patientsactive at 17 clinical sites acrossin the U.S. and Israel.Israel (ClinicalTrials.gov ID NCT05626114). Our earlier Lineage-sponsored Phase 1/2a study has completed enrollment; we continue to perform certain closeout,closeout and data analysis,analysis andrelated to that study. In addition, we continue to have some manufacturing and process development activities under the Roche Agreement related to that study.Agreement.

In May 2026, Roche and Genentech presented data from the Phase 1/2a study at Foundation Fighting Blindness’ Retinal Therapeutics Innovation Summit 2026. Highlights include that (i) gains in best corrected visual acuity (BCVA) in patients in Cohort 4 (less advanced GA than in other cohorts) measured at month 12 remain evident through month 36; (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 who received extensive coverage of OpRegen cell therapy across their GA lesion (n=5), the mean change in BCVA was +9.0 letters for those completing 3-year follow-up (compared to +7.4 letters at 24 months) (Early Treatment Diabetic Retinopathy Study (ETDRS) assessment) and (iv) quantitative analysis of OCT imaging suggest evidence of partial restoration of the retina, including regions with re-appearance of an RPE layer and features associated with recovery of photoreceptors.

Our second most advanced internally ownedpreclinical product candidate is ReSonance (ANP1), an allogeneic auditory neuron progenitor cell transplant, currently in preclinical development for the treatment of sensorineural hearing loss. In August 2025, we announced that we entered into athe research collaboration agreementRCA with WDI to advance the preclinical development of ReSonance for the treatment of hearing loss. Under that collaboration agreement, WDI agreed to fund up to $12 million in research collaboration costs over the approximate three-year term of the agreement, for activities conducted in accordance with a portionschedule of planned activities and budget agreed to by the parties (the “RCA Budget”). Under the RCA Budget, development activities are being jointly conducted and managed by Lineage and scientists from Eriksholm Research Centre, part of Oticon A/S, which is a subsidiary of the Demant Group and an affiliate of WDI, with approximately 65% of the original budget designated to reimburse Lineage for its allocation of work on the Project. Through June 30, 2026, Lineage has beenreceived expendedapproximately to$2.6 date to support the activities described below.million. The main objective of the agreement is for the parties to complete a preclinical phase achieving readiness to potentially progress to human clinical trials under one or more separate clinical agreements, the terms of which would be negotiated in good faith before the expiration of the agreement. DevelopmentTo activitiesdate, are being jointly conducted and managed by Lineage and scientists from Eriksholm Research Centre, part of Oticon A/S, which is a subsidiary of the Demant Group. Wewe have successfully completed 3 engineering manufacturing runs, withcompleted preparations underway forthe internal technology transfer from our R&D team to our cGMP team.team, Weand completed one cGMP manufacturing run which is currently the subject of standard release testing. The parties have also established a novel model of deafening to support ReSonance functional preclinical testing under the collaboration. See Note 13 (Commitments and Contingencies—Collaborations—WDI Collaboration) to our condensed consolidated interim financial statements included in this report for additional information.

In March 2026, we announced the launch of our newest cell therapy program, COR1, a corneal endothelial cell (CEnC) therapy in preclinical testingdevelopment for the treatment of corneal endothelial disease,disease. including Fuchs’ corneal dystrophy. Fuchs’ corneal dystrophyCOR1 is a progressive, often hereditary condition where cells on the inner layer of the cornea die, causing cornea swelling and vision loss. In the advanced setting, DMEK (Descemet’s membrane endothelial keratoplasty) is a surgical option consisting of replacing the diseased cells with a donor graft, often leading to improved vision. COR1 is an internally-developed and wholly-owned asset,preclinical asset which we believe can benefitbenefits from our existing ophthalmology and manufacturing expertise.expertise and which represents a natural next application of our technology platform.

Millions of people are potential candidates for corneal transplants for which today there is only one donor for every 70 diseased eyes globally. The current supply of CEnC’sCEnCs from cadaveric sources is further limited by the low availability of organ donors, as well as by inconsistent yield and qualityquality. CEnC therapy from cadaveric sources has already been approved in Japan to treat corneal endothelial disease, providing evidence for the underlying mechanism of action. The cornea is a relatively accessible site for transplantation, with a simple injection-based delivery method and a long clinical track record from donor-based procedures. In addition, the eye offers a degree of immune privilege, potentially reducing the risk of immune rejection.

Utilizing our AlloSCOPE platform, we are manufacturing CEnCs with identity, morphological, and functional characteristics that meet our initial internal criteria and support further development. We plan to advance this program into translational models to support human testing. Applicable indications for COR1 are expected to include Fuchs Endothelial Corneal Dystrophy (FECD) and Bullous Keratopathy. FECDFuchs’ corneal dystrophy is a primaryprogressive, progressiveoften genetichereditary disordercondition characterizedwhere bycells bilateral,on slow-progressingthe dysfunctioninner whichlayer asof the cornea die, causing cornea swelling and vision loss. In the advanced setting, DMEK (Descemet’s membrane endothelial keratoplasty) is a surgical option consisting of replacing the diseased cells with a donor graft, often leading to improved vision. As of 2022, FECD affects about 7.3% of adults over the age of 30 globally, with a projected affected patient population expected to rise to approximately 415 million by 2050.

In September 2025, we announced the launch of ILT1, a new manufacturing initiative employing AlloSCOPE 5D platform technology. AlloSCOPE 5D describes an application of AlloSCOPE with the goal of higher scale production of pre-differentiated cells with reduced manipulation and passaging. ILT1 is initially focused on addressing the challenges of large-scale production ofand aims to produce highly synchronized pluripotent cells, and which if successful at a large scale,scale could thereafter be applied,applied together withto an islet cell differentiation protocol,process to ultimately support the production of allogeneic islet cells for a potential treatment for Type 1 Diabetes (T1D). This initiative is focused initially on expanding our existing AlloSCOPE platform to become capable of significantly greater production of undifferentiated pluripotent cells than our current capability, with the overall goal of establishing a production modality that can be applied to islet cell differentiation to ultimately support an islet cell production process from expansion through differentiation in a dynamic culturing system,system. andWe whichbelieve that if successful,this approach is successful it could potentially solve a major hurdle to production and commercialization of an islet cell therapy product candidate.

During the first quarterhalf of 2026, we successfully metcontinued to meet our firstinternal milestonemilestones for our ILT1 manufacturing initiative, demonstrating a highly scalable and fully suspension-based process for generating undifferentiated pluripotent cells using one of our proprietary and in house cell lines. This initial work was successful at 0.5 liter scale and supportsin furtherthe second quarter of 2026 we demonstrated development into a larger multi-liter format.format, which supports further and continued development. If successful at larger scale, we may seek to demonstrate AlloSCOPE 5D scalability with one or more internal or partner-sourced hypo-immune or non hypo-immune cell lines, suitable to support potential islet cell differentiation and preclinical testing. We additionally may seek to apply insights and process improvements we have learned or may learn through this process to other cell transplant programs, including programs we may launch in the future.

All of our manufacturing processes,processes and development, 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. In addition, certain of the clinical trial sites for the OpRegen GAlette study are in Israel.

The recent2026 escalationIran ofWar and the ongoing conflict and hostilities in the Middle East—including the strikes by Israel and the United States on Iran that began on February 28, 2026 and the retaliatory attacks thereto— has increased the risk of broaderinterruptions regionalto our operations in Jerusalem and to the clinical trial sites for the OpRegen GAlette study in Israel, including due to increased risk of delays in the delivery of supplies and/or equipment, power interruptions, absence of workforce due to military escalation,service, cyberattacks, disruptions to transportation and logistics infrastructure, interruption of utility and communications services, and other events that could directly disruptbeyond our operations in Jerusalem and the clinical trial sites for the OpRegen GAlette study in Israel.control. As of the date of the filing of this report, our operations in Jerusalem have not been materially or adversely disrupted, and we are not aware of any material disruption to the clinical trial sites for the OpRegen GAlette study in Israel. TheHowever, the situation continues to rapidlyremain evolve,volatile, and it is currently not possible to predict the scope, duration or severity of present or future regional instability or its effects on our operations in Jerusalem or on thesuch clinical trial sites for the OpRegen GAlette study in Israel.sites. See the risk factor in Item 1A. Risk Factors in Part I of the 2025 10-K titled, “All of our manufacturing operations currently are conducted at our facility in Jerusalem, Israel. Accordingly, political and economic conditions in Israel and war, cyberattacks, terrorist attacks or other armed conflicts involving Israel and the broader region could directly affect our business. Any event or condition that significantly disrupts our ordinary course of operations at our Jerusalem facility could harm our business and materially and adversely affect our financial condition and operating results.”

As a result of safety concerns and in response to government-imposed restrictions on movement and travel and other precautions taken to address the Israeli regional conflict that began in October 2023, our operations at our CCN facility in Jerusalem were temporarily impacted in the past. In light of the recent escalation of hostilities and conflict in the Middle East, we expect that similar government-imposed restrictions on movement and travel and other precautions will be implemented, which could materially and adversely affect the operations at our Jerusalem facility. Further, a number of our CCN employees in Israel are members of the military reserves and subject to immediate call-up in response to regional instability. Male Israeli citizens are obligated to perform several days, and in some cases more, of annual military reserve duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event of a military conflict, may be called to active duty. Several employees in Israel, including CCN’s chief executive officer, were activated for military duty in the past, and they and other employees may be activated for military duty in the future, particularly in light of the recent escalation of hostilities and conflict in the Middle East, which could disruptadversely impact our operations. In addition, theThe general impact on employees operating in a region of conflict could also 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, those plans are limited and do not account for every possible scenario, and in addition, any long-term closure of our CCN facility, or if that facility were damaged, or if hostilities otherwise disrupt the ongoing operations at that facility, or if a meaningful number of employees are unable to work for significant portions of time, our operations would be materially and adversely impacted.

Our business, financial condition, operating results, stock price, and our ability to raise additional capital may be adversely affected by evolving macroeconomic, political, and regulatory developments and conditions, such as inflation, trade disruptions and restrictive measures, including tariffs, high interest rates, slowed economic growth or recession, uncertainty with respect to the federal budgetspending reductions and debtsequestration ceiling, potential or prolonged U.S. government shutdowns,risks, volatility in financial markets, liquidity concerns at financial institutions, supply chain disruptions, changes in the regulatory landscape in the U.S., including due to significant reductions in funding and staffing of federal agencies and changes in leadership, and geopolitical factors. Further, third parties with whom we have business relationships, including clinical investigative sites, financial institutions, and our collaborators, may be adversely affected by the foregoing risks, which could directly impact our ability to achieve our operating goals within planned timelines and budgets.

In addition, there may be significant future effects on the pharmaceutical and biopharmaceutical industries as a result of federal policy and regulatory changes under the current U.S. presidential administration,changes, including in areas relating to regulatory framework and oversight, research and development funding, drug pricing reform, global trade policy and tariffs, and others. U.S.Executive federalbranch governmentcost-cutting initiatives have resulted in significant reductions in staffing levels at the FDA and other governmental agencies. TheThese foregoingreductions couldhave impactimpacted, and may continue to impact, agencies’ ability to retain remaining key personnel and hire additional personnel, which may disrupt their ability to perform routine activities or function in the normal course. For example, with respect to the FDA, this may result in delays or limitations on our ability to obtain guidance from agency staff and slow review times for applications we submit with respect to clinical studies, any of which could negatively impact the cost and timelines for developing and obtaining regulatory approval of our product candidates. Moreover, the current U.S. presidential administration has taken and may take additional future actions to freeze or reduce federal funding for medical research, which could decrease the ability of facilities that rely on such funding to conduct clinical trials or increase the costs to us of conducting clinical trials at those facilities. Given the highrapidly levelevolving nature of uncertainty regarding federal policy, enforcementenforcement, and regulatory changes, and that circumstances are rapidly evolving, we cannot reasonably predict the potential impact on our business at this time.

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 2025 10-K and our audited financial statements and notes thereto for the year ended December 31, 2025 in Part II, Item 8 of the 2025 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, 2025, continue to be our critical accounting policies and there have been no material changes to our critical accounting policies during the three months ended MarchJune 31,30, 2026.

Comparison of Three and Six Months Ended MarchJune 31,30, 2026 and 2025

For the three months ended MarchJune 31,30, 2026, the $0.2$1.7 million increasedecrease in total revenues as compared to the prior year was primarily attributable to a $0.3$1.6 million increasedecrease in collaboration revenues,revenues partially offset byand a decrease of approximately $0.1 million in royalty revenue. Within the decrease in collaboration revenues, $1.1 million was attributable to the Roche Agreement, reflective of measured progress toward completion of the first performance obligation. The remaining decrease was largely comprised of approximately $0.7 million related to deferred revenue recognized upon the termination of the license agreement with Immunomic Therapeutics, Inc., in the second quarter of 2025, partially offset by a $0.3 million increase in collaboration revenues wasrelated primarily driven by the revenue received underto our research collaboration agreement with WDI.

Research and development expenses. For the three months ended MarchJune 31,30, 2026, the $1.1$1.7 million increase in total research and development expenses as compared to the prior year was primarily driven by $0.3$1.6 million for our OPC1preclinical program,programs $0.2and other undisclosed programs, $0.5 million for our ReSonance program, and approximately $0.7$0.2 million for our preclinicalOPC1 andprogram, otherpartially undisclosedoffset programs.by a $0.6 million decrease for our OpRegen program.

General and administrative expenses. For the threesix months ended MarchJune 31,30, 2026, the $0.2$2.8 million increase in generalresearch and administrativedevelopment expenses as compared to the prior year was primarily attributabledriven toby a $0.4$2.2 million increasefor inour personnelpreclinical costs,programs and other undisclosed programs, $0.7 million for our ReSonance program, $0.5 million for our OPC1 program, partially offset by servicesa provided$0.6 bymillion thirddecrease parties.for our OpRegen program.

Interest income, net. For both the three and six months ended MarchJune 31,30, 2026, the decrease in interest income, net, was attributable to lower interest rates, despite higher average cash and marketable debt securities balances.

Gain (loss) on marketable equity securities, net. We expect our net gain or loss on marketable equity securities to fluctuate each reporting period based on the changes in the market price of marketable equity 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 equity 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 MarchJune 31,30, 2026 and 2025, the change in the values of our marketable equity securities was de minimis and primarily related to changes in the fair market value of such securities during the respective periods.

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, and at the time of each warrant exercise, 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 MarchJune 31,30, 2026 and 2025, the change in the fair value of the warrants was primarily driven by a decreasefluctuations in the Company’s common share price during these periods.

Other income (expenses), net. For the three months ended MarchJune 31,30, 2026 and 2025, the Companychange recordedin $0.2other millionincome of(expenses) as compared to the prior year was de minimis. For the six months ended June 30, 2026 and 2025, the change in other expense as compared to the prior year was related to the allocated transaction costs for warrants issued in connection with the second closing of the November 2024 RDO in January 2025.2025; Therethere was no comparable expense incurred in the threesix months ending MarchJune 31,30, 2026.

Under ASC 740, Income Taxes, a valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. As of December 31, 2025, Lineage released the valuation allowance associated with its Israeli subsidiary’s deferred tax assets based on sustained profitability and other positive evidence. Lineage continues to maintain a full valuation allowance against its U.S. and Singapore deferred tax assets due to the uncertainty of realizing future tax benefits from net operating loss carryforwards and other deferred tax assets in those jurisdictions. Lineage did not record a deferred tax benefit or provision expense for either of the three or six months ended MarchJune 31,30, 2026 or 2025.

As of MarchJune 31,30, 2026, we had $53.4$50.8 million in cash, cash equivalents and marketable securities, and our accumulated deficit was $471.8$470.3 million. For the threesix months ended MarchJune 31,30, 2026, we incurred a loss from operations of $7.6$16.5 million and had negative cash flow from operations of $8.1$15.3 million. Since inception, we have incurred significant operating losses and we expect to continue to incur significant operating losses for the foreseeable future.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 was $8.1$15.3 million and consisted of a net loss of $4.8$3.2 million plus the net changes in operating assets and liabilities of approximately $2.1$2.5 million and $1.2$9.6 million in non-cash adjustments. The net changes in operating assets and liabilities were primarily due to a $1.7$2.1 million reduction in accounts payable and accrued liabilities and a $1.0$1.7 million reduction in deferred revenues, partially offset by a $0.6$1.3 million increase in accounts receivable and prepaid expenses and other current assets. The non-cash adjustments were primarily due to a $2.3$11.8 million change in the fair value of the warrant liability, partially offset by $1.2$2.8 million for stock based compensation.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2025 was $4.9$10.4 million and consisted of a net loss of $4.1$34.5 million plus the net changes in operating assets and liabilities of approximately $0.3$2.6 millionmillion, andpartially $0.5offset by $26.7 million in non-cash adjustments. The net changes in operating assets and liabilities waswere primarily due to a $1.3$3.8 million reduction in deferred revenues, partially offset by $1.1a $1.3 million increase in accounts receivable and prepaid expenses and other current assets. The non-cash adjustments were primarily due to thea $10.4 million change in the fair value of the warrant liability,liability partiallyas offsetwell byas stock-baseda compensation$14.8 andmillion depreciation.loss on impairment of our IPR&D intangible asset related to the VAC platform.

Cash (Used in) Provided by Investing Activities

Cash provided by investing activities for the threesix months ended MarchJune 31,30, 20252026 was $1.9$1.6 million and primarily consisted of proceeds from maturities of U.S. Treasury securities, net of cash used to purchase U.S. Treasury securities.

Cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026 was $5.6$10.0 million and primarily consisted primarilyof net proceeds from the sale of common shares under our at-the-market offering program as well as proceeds from the exercise of warrantsoptions and stock options.warrants.

Cash provided by financing activities for the threesix months ended MarchJune 31,30, 2025 was $5.0$4.7 million and primarily consisted of net proceeds from the sale of our common shares withand warrants in the November 2024 RDO, partially offset by principal payments against our financed insurance liability.

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 MarchJune 31,30, 2026, the aggregate cap amount was approximately $96.7$97.2 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. In December 2025, Lineage funded CCN to pay the IIA 24.1% of the $5.0 million received from Roche upon the achievement of the first milestone under the Agreement. As of MarchJune 31,30, 2026, 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.

Our obligations to licensors under license agreements and to other government entities under the terms of grants we have received require us to make future payments relating to sublicense fees, developmental, regulatory and/or commercial milestone payments, redemption fees, royalties and patent maintenance costs. Sublicense fees are payable to licensors or government entities when we sublicense underlying intellectual property to third parties; the fees are based on a percentage of the license-related revenue we receive from sublicensees. Milestone payments are due to licensors or government entities upon future achievement of certain developmental, regulatory and/or commercial milestones. Royalties are payable to licensors or government entities based on a percentage of net sales of licensed products or of products covered by the in-licensed intellectual property, including those related to the Roche Agreement. In January 2026, Lineage funded CCN to pay Hadasit 21.5% of the $5.0 million received from Roche upon the achievement of the first milestone under the Roche Agreement. Patent maintenance costs are payable to licensors as reimbursement for the cost of maintaining licensed patents. Due to the contingent nature of the payments, the amounts and timing of payments to licensors under our in-license agreements and to government entities under the terms of grants we have received are uncertain and may fluctuate significantly from period to period. As of MarchJune 31,30, 2026, we have not included these future commitments on our condensed consolidated balance sheet because the achievement and timing of these events are not fixed and determinable.

As of MarchJune 31,30, 2026, under the terms of the leases for the facilities from which CCN and Lineage operate, a total of $2.2$2.0 million of rent payments will become due, of which $0.6$0.2 million will become due in the remainder of 2026.

In March 2026, we received $5.4 million in proceeds from the exercise of warrants issued in our November 2024 RDO. We may receive up to an additional $30.2 million in gross proceeds upon the full cash exercise of the warrants we issued to the investors in the November 2024 RDO. However, no assurances can be given as to the extent to which additional warrants will be exercised. As of MarchJune 31,30, 2026, $60.0$55.4 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.

We believe that our $53.4$50.8 million in cash, cash equivalents and marketable securities at MarchJune 31,30, 2026, 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, marketable securities, 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.