What changed in this filing

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Item 1A. Risk Factors

2021-08-12 compared with 2021-05-13 · 1175 added, 1207 removed, 231 unchanged (91% of the section changed)

investment in our common shares involves a high degree of risk.

You should carefully consider the following risk factors, as well

as the other information in this Report, before deciding whether to purchase, hold or sell our common shares.

The occurrence of

any of the following risks could harm our business, financial condition, results of operations and/or growth prospects or cause

our actual results to differ materially from those contained in forward-looking statements we have made in this Report and those

we may make from time to time.

You should carefully consider the following risk factors, as well as

the other information in this Report, before deciding whether to purchase, hold or sell our common shares.

The occurrence of any of the

following risks could harm our business, financial condition, results of operations and/or growth prospects or cause our actual results

to differ materially from those contained in forward-looking statements we have made in this Report and those we may make from time to

You should consider all of the risk factors described when evaluating our business.

We have marked

with an asterisk (*) those risk factors that reflect changes from the similarly titled risk factors included in Item 1A of our

Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the Commission on March 11, 2021.

We have marked with an asterisk (*) those risk

factors that reflect changes from the similarly titled risk factors included in Item 1A of our Annual Report on Form 10-K for the fiscal

year ended December 31, 2020, as filed with the Commission on March 11, 2021.

Related to Our Business Operations and Capital Requirements

have incurred operating losses since inception, and we do not know if or when we will attain profitability.*

total operating losses for the fiscal year ended December 31, 2020 were $26.4 million and our total operating losses for the three

months ended March 31, 2021 were $7.1 million, and we had an accumulated deficit of $295.5 million as of March 31, 2021.

inception, we have incurred significant operating losses and have funded our operations primarily through sales of our equity

securities and the equity securities of former subsidiaries, receipt of research grants, royalties on product sales, license revenues,

sales of research products, and revenues from subscription fees and advertising revenue from database products of a former subsidiary.

Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs

and from general and administrative costs associated with our operations.

All of our product candidates will require substantial

additional development time and resources before we would be able to apply for or receive regulatory approvals.

We expect to continue

to incur losses for the foreseeable future, and we anticipate these losses will increase substantially as we continue our development

of, seek regulatory approval for and potentially commercialize any of our product candidates and seek to identify, assess, acquire,

in-license or develop additional product candidates.

become and remain profitable, we must succeed in developing and eventually commercializing products that generate significant

This will require us to be successful in a range of challenging activities, including completing clinical trials and

preclinical trials of our product candidates, obtaining regulatory approval for these product candidates and manufacturing, marketing

and selling any products for which we may obtain regulatory approval.

In addition, we are attempting to develop new medical products

and technology.

We may never succeed in these activities and, even if we do, may never generate revenues that are significant

enough to achieve profitability.

will continue to spend a substantial amount of our capital on research and development, but we might not succeed in developing

products and technologies that are useful in medicine.*

total operating losses for the fiscal year ended December 31, 2020 were $26.4 million and our total operating losses for the six months

ended June 30, 2021 were $14.1 million, and we had an accumulated deficit of $300.3 million as of June 30, 2021.

Since inception, we

have incurred significant operating losses and have funded our operations primarily through sales of our equity securities and the equity

securities of former subsidiaries, receipt of research grants, royalties on product sales, license revenues, sales of research products,

and revenues from subscription fees and advertising revenue from database products of a former subsidiary.

Substantially all of our losses

have resulted from expenses incurred in connection with our research and development programs and from general and administrative costs

associated with our operations.

All of our product candidates will require substantial additional development time and resources before

we would be able to apply for or receive regulatory approvals.

We expect to continue to incur losses for the foreseeable future, and

we anticipate these losses will increase substantially as we continue our development of, seek regulatory approval for and potentially

commercialize any of our product candidates and seek to identify, assess, acquire, in-license or develop additional product candidates.

become and remain profitable, we must succeed in developing and eventually commercializing products that generate significant revenue.

This will require us to be successful in a range of challenging activities, including completing clinical trials and preclinical trials

of our product candidates, obtaining regulatory approval for these product candidates and manufacturing, marketing and selling any products

for which we may obtain regulatory approval.

In addition, we are attempting to develop new medical products and technology.

succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability.

will continue to spend a substantial amount of our capital on research and development, but we might not succeed in developing products

and technologies that are useful in medicine.*

are attempting to develop new medical products and technology.

These new products and technologies might not prove to be safe

and efficacious in the human medical applications for which they are being developed.

Our research and development activities

are costly, time consuming, and their results are uncertain.

We incurred research and development expenses amounting to approximately

$3.4 million during the three months ended March 31, 2021, and $12.3 million during the fiscal year ended December 31, 2020.

we successfully develop a new technology or product, refinement of the new technology or product and definition of the practical

applications and limitations of the technology or product may take years and require large sums of money.

Clinical trials of new

therapeutic products, particularly those products that are regulated as biologics, drugs, or devices, are very expensive and take

years to complete.

We may not have the financial resources to fund clinical trials on our own and we may have to enter into licensing

or collaborative arrangements with others.

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.

In addition, we may discontinue one or more of the research or product development programs.

Our product and technology

development programs may be delayed or discontinued should adequate funding on acceptable terms not be available.

amount and pace of research and development work that we can do or sponsor, and our ability to commence and complete clinical

trials required to obtain regulatory approval to market our therapeutic and medical device products, depends upon the amount of

funds we have.*

March 31, 2021, we had $62.4 million of cash, cash equivalents and marketable equity securities.

There can be no assurance that

we will be able to raise additional funds on favorable terms or at all, or that any funds raised will be sufficient to permit

us to develop and market our products and technology, if and when approved.

Our ability to raise additional funds may be adversely

impacted by deteriorating global economic conditions and the disruptions to and volatility in the credit and financial markets

in the United States and worldwide resulting from the ongoing COVID-19 pandemic.

Unless we are able to generate sufficient revenue

or raise additional funds when needed, it is likely that we will be unable to continue our planned activities, even if we make

progress in our research and development projects.

We may have to postpone or limit the pace of our research and development work

and planned clinical trials of our product candidates unless our cash resources increase through a growth in revenues, royalties,

license fees, equity financings or borrowings.

These new products and technologies might not prove to be safe and efficacious

in the human medical applications for which they are being developed.

Our research and development activities are costly, time consuming,

and their results are uncertain.

We incurred research and development expenses amounting to approximately $6.3 million during the six

months ended June 30, 2021, and $12.3 million during the fiscal year ended December 31, 2020.

If we successfully develop a new technology

or product, refinement of the new technology or product and definition of the practical applications and limitations of the technology

or product may take years and require large sums of money.

Clinical trials of new therapeutic products, particularly those products that

are regulated as biologics, drugs, or devices, are very expensive and take years to complete.

We may not have the financial resources

to fund clinical trials on our own and we may have to enter into licensing or collaborative arrangements with others.

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.

In addition, we may discontinue one or more of the research or product

development programs.

Our product and technology development programs may be delayed or discontinued should adequate funding on acceptable

terms not be available.

amount and pace of research and development work that we can do or sponsor, and our ability to commence and complete clinical trials

required to obtain regulatory approval to market our therapeutic and medical device products, depends upon the amount of funds we have.*

June 30, 2021, we had $68.7 million of cash, cash equivalents and marketable equity securities.

There can be no assurance that we will

be able to raise additional funds on favorable terms or at all, or that any funds raised will be sufficient to permit us to develop and

market our products and technology, if and when approved.

Our ability to raise additional funds may be adversely impacted by deteriorating

global economic conditions and the disruptions to and volatility in the credit and financial markets in the United States and worldwide

resulting from the ongoing COVID-19 pandemic.

Unless we are able to generate sufficient revenue or raise additional funds when needed,

it is likely that we will be unable to continue our planned activities, even if we make progress in our research and development projects.

We may have to postpone or limit the pace of our research and development work and planned clinical trials of our product candidates

unless our cash resources increase through a growth in revenues, royalties, license fees, equity financings or borrowings.

will need to issue additional equity or debt securities in order to raise additional capital needed to pay our operating expenses.

expect to continue to incur substantial research and product development expenses and will need to raise additional capital to

pay operating expenses until we are able to generate sufficient revenues from product sales, royalties and license fees.

to raise additional equity or debt capital will depend, not only on progress made in developing new products and technologies,

but also on access to capital and conditions in the capital markets.

We believe that our cash, cash equivalents and marketable

securities as of March 31, 2021 will be sufficient to fund our planned operations for at least the next 12 months.

We have based

these estimates on assumptions that may prove to be wrong, and we may use our capital resources sooner than we currently expect.

Our operating plans and other demands on our cash resources may change as a result of many factors currently unknown to us, and

we may need to seek additional funds sooner than planned.

Any equity capital raise could result in the dilution of the interests

of shareholders or may otherwise limit our ability to finance further in the future, which may negatively impact our business

and operations.

Any debt capital financing may involve covenants that restrict our operations, including limitations on additional

borrowing and on the use of our assets.

If we raise capital through licensing arrangements, it may be necessary to grant licenses

on terms that are not favorable to us.

There can be no assurance that we will be able to raise capital on favorable terms, or

at all, or at times and in amounts needed to successfully finance product development, clinical trials, and general operations.

expect to continue to incur substantial research and product development expenses and will need to raise additional capital to pay operating

expenses until we are able to generate sufficient revenues from product sales, royalties and license fees.

Our ability to raise additional

equity or debt capital will depend, not only on progress made in developing new products and technologies, but also on access to capital

and conditions in the capital markets.

We believe that our cash, cash equivalents and marketable securities as of June 30, 2021 will

be sufficient to fund our planned operations for at least the next 12 months.

We have based these estimates on assumptions that may prove

to be wrong, and we may use our capital resources sooner than we currently expect.

Our operating plans and other demands on our cash

resources may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned.

Any equity capital raise could result in the dilution of the interests of shareholders or may otherwise limit our ability to finance

further in the future, which may negatively impact our business and operations.

Any debt capital financing may involve covenants that

restrict our operations, including limitations on additional borrowing and on the use of our assets.

If we raise capital through licensing

arrangements, it may be necessary to grant licenses on terms that are not favorable to us.

There can be no assurance that we will be

able to raise capital on favorable terms, or at all, or at times and in amounts needed to successfully finance product development, clinical

trials, and general operations.

have been filed and other lawsuits may be filed against our company and certain members of our company’s and Asterias Biotherapeutics,

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An adverse ruling in any such lawsuit may result in additional payments and costs.

putative class action lawsuit alleging breach of fiduciary duties in connection with the Asterias Merger is pending in the Delaware

Chancery Court.

The defendants are certain former members of Asterias’ board of directors and our company’s board

of directors.

The complaint alleges that the merger process was conflicted, that the consideration was inadequate, and that the

proxy statement filed by Asterias was misleading.

The complaint seeks, among other things, certification of a class, rescission

of the merger or monetary damages, and attorneys’ fees and costs.

putative class action lawsuit alleging breach of fiduciary duties in connection with the Asterias Merger is pending in the Delaware Chancery

The defendants are certain former members of Asterias’ board of directors and our company’s board of directors.

complaint alleges that the merger process was conflicted, that the consideration was inadequate, and that the proxy statement filed by

Asterias was misleading.

The complaint seeks, among other things, certification of a class, rescission of the merger or monetary damages,

and attorneys’ fees and costs.

defendants specifically deny all allegations in the litigation and intend to defend it vigorously.

However, any adverse ruling

in this case could result in additional payments.

Additional lawsuits arising out of or relating to the merger agreement and/or

the merger may be filed in the future.

in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business,

cash flow, financial condition or results of operations.

However, any adverse ruling in this

case could result in additional payments.

Additional lawsuits arising out of or relating to the merger agreement and/or the merger may

be filed in the future.

in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash

flow, financial condition or results of operations.*

income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could adversely

affect our business operations and financial performance.

Further, existing tax laws, statutes, rules, regulations or ordinances

could be interpreted, changed, modified or applied adversely to us.

For example, the 2017 Tax Act, enacted many significant changes

Future guidance from the Internal Revenue Service and other tax authorities with respect to the 2017 Tax

Act may affect us, and certain aspects of the 2017 Tax Act could be repealed or modified in future legislation.

For example, the

Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the Consolidated Appropriations Act, 2021

(CA) modified certain provisions of the 2017 Tax Act.

Further, existing tax laws, statutes, rules, regulations or ordinances could

be interpreted, changed, modified or applied adversely to us.

For example, the legislation enacted in 2017, informally titled the Tax

Cuts and Jobs Act (the “2017 Tax Act”), enacted many significant changes to the U.S.

Future guidance from the Internal

Revenue Service and other tax authorities with respect to the 2017 Tax Act may affect us, and certain aspects of the 2017 Tax Act could

be repealed or modified in future legislation.

For example, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES

Act”) modified certain provisions of the 2017 Tax Act.

In addition, it is uncertain if and to what extent various states will conform

to the 2017 Tax Act, the CARES Act, or any newly enacted federal tax legislation.

Changes in corporate tax rates, the realization

of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under

the 2017 Tax Act or future reform legislation could have a material impact on the value of our deferred tax assets, could result

in significant one-time charges, and could increase our future U.S.

Changes in corporate tax rates, the realization of

net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under the 2017

Tax Act or future reform legislation could have a material impact on the value of our deferred tax assets, could result in significant

one-time charges, and could increase our future U.S.

ability to use net operating losses and other tax attributes to offset future taxable income or taxes may be subject to limitations.

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$169.9 million and $118.6 million, respectively.

Included in these amounts are NOLs acquired through the merger with Asterias

A portion of the federal and state NOL carryforwards will begin to expire, if not utilized, in varying amounts between

2027 and 2037.

Included in these amounts are NOLs acquired through the merger with Asterias (see below).

A portion of the federal and state NOL carryforwards will begin to expire, if not utilized, in varying amounts between 2027 and 2037.

NOLs that expire unused will be unavailable to offset future income tax liabilities.

Under federal income tax law,

federal NOLs incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility

of such NOLs in tax years beginning after December 31, 2020, is limited to 80% of taxable income.

It is uncertain if and to what

extent various states that we may operate in will conform to the federal tax law.

In addition, under Sections 382 and 383 of the

Internal Revenue Code of 1986, as amended (the “IRC”), and corresponding provisions of state law, if a corporation

undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity

ownership over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change

tax attributes to offset its post-change income or taxes may be limited.

We may experience ownership changes in the future as

a result of subsequent shifts in our stock ownership, some of which may be outside of our control.

If an ownership change occurs

and our ability to use our NOL carryforwards is materially limited, it would harm our future operating results by effectively

increasing our future tax obligations.

In addition, at the state level, there may be periods during which the use of net operating

loss carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

in 2020 California enacted A.B.

85 which imposed limits on the usability of California state net operating losses and certain

tax credits in tax years beginning after 2019 and before 2023.

part of the merger with Asterias, we acquired various tax attribute carryforwards including federal and California NOLs of $52.8

million and $41.9 million, respectively, as well as California research and development credits of $2.4 million.

As a result of

the merger, Asterias incurred an ownership change under Section 382 of the IRC, which places annual limits on the amount of these

NOLs that are available to offset income.

Because of the annual limitation, the total amount of these NOLs is not immediately

available to offset future income.

Under federal income tax law, federal NOLs incurred

in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such NOLs in tax years

beginning after December 31, 2020, is limited to 80% of taxable income.

It is uncertain if and to what extent various states that we

may operate in will conform to the federal tax law.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as

amended (the “IRC”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,”

which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s

ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be

We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may

be outside of our control.

If an ownership change occurs and our ability to use our NOL carryforwards is materially limited, it would

harm our future operating results by effectively increasing our future tax obligations.

In addition, at the state level, there may be

periods during which the use of net operating loss carryforwards is suspended or otherwise limited, which could accelerate or permanently

increase state taxes owed.

For example, in 2020 California enacted A.B.

85 which imposed limits on the usability of California state

net operating losses and certain tax credits in tax years beginning after 2019 and before 2023.

part of the merger with Asterias, we acquired various tax attribute carryforwards including federal and California NOLs of $52.8 million

and $41.9 million, respectively, as well as California research and development credits of $2.4 million.

As a result of the merger, Asterias

incurred an ownership change under Section 382 of the IRC, which places annual limits on the amount of these NOLs that are available

to offset income.

Because of the annual limitation, the total amount of these NOLs is not immediately available to offset future income.

The California research and development credit of $2.4 million has no expiration date.

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are organized in the United States, and currently have subsidiaries in Israel and Singapore.

If we succeed in growing our business,

we expect to conduct increased operations through subsidiaries in various tax jurisdictions pursuant to transfer pricing arrangements

between us and our subsidiaries.

If two or more affiliated companies are located in different countries, the tax laws or regulations

of each country generally will require that such arrangements be priced the same as those between unrelated companies dealing

at arm’s length and that appropriate documentation is maintained to support the value of such arrangements.

pricing policies were formulated with the assistance of third-party experts.

We are in the process of obtaining a formal transfer

pricing report.

However, after we receive such report, we do not intend to amend our returns for prior years.

Whether we obtain

a formal transfer pricing study with outside experts or not, our transfer pricing procedures will not be binding on applicable

tax authorities.

tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arm’s length

transactions, they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer

prices, which could result in a higher tax liability to us.

In addition, if the country from which the income is reallocated does

not agree with the reallocation, both countries could tax the same income, resulting in double taxation.

If tax authorities were

to allocate income to a higher tax jurisdiction, subject our income to double taxation or assess interest and penalties, it would

increase our tax liability, which could adversely affect our financial condition, results of operations and cash flows.

If we succeed in growing our business, we

expect to conduct increased operations through subsidiaries in various tax jurisdictions pursuant to transfer pricing arrangements between

us and our subsidiaries.

If two or more affiliated companies are located in different countries, the tax laws or regulations of each

country generally will require that such arrangements be priced the same as those between unrelated companies dealing at arm’s

length and that appropriate documentation is maintained to support the value of such arrangements.

Our transfer pricing policies were

formulated with the assistance of third-party experts.

We are in the process of obtaining a formal transfer pricing report.

after we receive such report, we do not intend to amend our returns for prior years.

Whether we obtain a formal transfer pricing study

with outside experts or not, our transfer pricing procedures will not be binding on applicable tax authorities.

tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arm’s length transactions,

they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices, which

could result in a higher tax liability to us.

In addition, if the country from which the income is reallocated does not agree with the

reallocation, both countries could tax the same income, resulting in double taxation.

If tax authorities were to allocate income to a

higher tax jurisdiction, subject our income to double taxation or assess interest and penalties, it would increase our tax liability,

which could adversely affect our financial condition, results of operations and cash flows.

business and operations could suffer in the event of system failures.

the implementation of security measures, our internal computer systems and those of our contractors and consultants are vulnerable

to damage from computer viruses, unauthorized access, natural disasters including earthquakes and tsunamis, terrorism, war, and

telecommunication and electrical failures.

Such events could cause significant interruption of our operations and development

For example, the loss of data for our product candidates could result in delays in our regulatory filings and development

efforts and significantly increase our costs.

To the extent that any disruption or security breach was to result in a loss of

or damage to our data, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the

development of our product candidates could be delayed.

the implementation of security measures, our internal computer systems and those of our contractors and consultants are vulnerable to

damage from computer viruses, unauthorized access, natural disasters including earthquakes and tsunamis, terrorism, war, and telecommunication

and electrical failures.

Such events could cause significant interruption of our operations and development programs.

For example, the

loss of data for our product candidates could result in delays in our regulatory filings and development efforts and significantly increase

To the extent that any disruption or security breach was to result in a loss of or damage to our data, or inappropriate disclosure

of confidential or proprietary information, we could incur liability and the development of our product candidates could be delayed.

addition, our product candidates are manufactured by starting with cells that are stored in a cryopreserved master cell bank.

While we believe we have adequate backup should any cell bank be lost in a catastrophic event, we or our third-party suppliers

and manufacturers could lose multiple cell banks, which would severely affect our manufacturing activities.

We cannot assure you

that any stability or other issues relating to the manufacture of any of our product candidates or products will not occur in

Any delay or interruption in the supply of clinical trial supplies could delay the completion of planned clinical

trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require

us to commence new clinical trials at additional expense or terminate clinical trials completely.

Any adverse developments affecting

clinical or commercial manufacturing of our product candidates or products may result in shipment delays, inventory shortages,

lot failures, product withdrawals or recalls or other interruptions in the supply of our product candidates or products.

failures or difficulties faced at any level of our supply chain could adversely affect our business and delay or impede the development

and commercialization of any of our product candidates or products and could have an adverse effect on our business, prospects,

financial condition and results of operations.

business could be adversely affected if we lose the services of the key personnel upon whom we depend or if we fail to attract

senior management and key scientific personnel.

believe we have adequate backup should any cell bank be lost in a catastrophic event, we or our third-party suppliers and manufacturers

could lose multiple cell banks, which would severely affect our manufacturing activities.

We cannot assure you that any stability or

other issues relating to the manufacture of any of our product candidates or products will not occur in the future.

Any delay or interruption

in the supply of clinical trial supplies could delay the completion of planned clinical trials, increase the costs associated with maintaining

clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or

terminate clinical trials completely.

Any adverse developments affecting clinical or commercial manufacturing of our product candidates

or products may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls or other interruptions in

the supply of our product candidates or products.

Accordingly, failures or difficulties faced at any level of our supply chain could

adversely affect our business and delay or impede the development and commercialization of any of our product candidates or products

and could have an adverse effect on our business, prospects, financial condition and results of operations.

business could be adversely affected if we lose the services of the key personnel upon whom we depend or if we fail to attract senior

management and key scientific personnel.

believe that our continued success depends to a significant extent upon our efforts and ability to retain highly qualified personnel,

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The loss of the services of Mr.

Culley or other members of our senior

management could have a material adverse effect on us.

Further, the replacement of any of such individuals likely would involve

significant time and costs and may significantly delay or prevent the achievement of our business and clinical objectives and

would harm our business.

Culley or other members of our senior management

could have a material adverse effect on us.

Further, the replacement of any of such individuals likely would involve significant time

and costs and may significantly delay or prevent the achievement of our business and clinical objectives and would harm our business.

addition, we could experience difficulties attracting qualified employees in the future.

For example, competition for qualified

personnel in the biotechnology and medical device field is intense due to the limited number of individuals who possess the skills

and experience required by our industry.

We will need to hire additional personnel, including experienced sales representatives,

as we expand our clinical development and commercial activities.

We may not be able to attract quality personnel on acceptable

terms, or at all.

In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have

been improperly solicited or that they have divulged proprietary or other confidential information or that their former employers

own their research output.

value of our investments in public companies fluctuates based on their respective stock prices and could be negatively affected

by business, regulatory and other risks applicable to them.*

of March 31, 2021, we had an equity investment in OncoCyte, a U.S.

For example, competition for qualified personnel

in the biotechnology and medical device field is intense due to the limited number of individuals who possess the skills and experience

required by our industry.

We will need to hire additional personnel, including experienced sales representatives, as we expand our clinical

development and commercial activities.

We may not be able to attract quality personnel on acceptable terms, or at all.

In addition, to

the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they

have divulged proprietary or other confidential information or that their former employers own their research output.

value of our investments in public companies fluctuates based on their respective stock prices and could be negatively affected by business,

regulatory and other risks applicable to them.*

of June 30, 2021, we had an equity investment in OncoCyte, a U.S.

publicly traded company.

As of March 31, 2021, the value of

our investment in OncoCyte was approximately $5.8 million based on its closing stock price as of that date.

If OncoCyte were to

have delays in clinical trials or commercialization activities or otherwise realize the specific business, regulatory and other

risks applicable to them, the value of its common stock and the valuation of our investment could be negatively affected.

were to fail and ultimately cease operations, we may lose the entire value of our investment.

In addition, the value of our marketable

equity securities may be significantly and adversely impacted by deteriorating global economic conditions and the disruptions

to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic.

As of June 30, 2021, the value of our investment

in OncoCyte was approximately $6.4 million based on its closing stock price as of that date.

If OncoCyte were to have delays in clinical

trials or commercialization activities or otherwise realize the specific business, regulatory and other risks applicable to them, the

value of its common stock and the valuation of our investment could be negatively affected.

If OncoCyte were to fail and ultimately cease

operations, we may lose the entire value of our investment.

In addition, the value of our marketable equity securities may be significantly

and adversely impacted by deteriorating global economic conditions and the disruptions to and volatility in the credit and financial

markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic.

Related to Government Regulation

may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, including anti-kickback and false

claims laws, transparency laws, and health information privacy and security laws.

If we are unable to comply, or have not fully

complied, with such laws, we could face substantial penalties.*

current and future operations may be subject to various federal and state fraud and abuse laws, including, without limitation,

the federal Anti-Kickback Statute, the federal False Claims Act, and healthcare professional transparency laws and regulations.

These laws may impact, among other things, our research activities and our proposed sales, marketing, and education programs.

In addition, we may be subject to patient privacy regulation by both the federal government and the states in which we conduct

our business.

The laws that may affect our ability to operate include:

federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving,

offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an

item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;

civil and criminal false claims laws, including the federal False Claims Act, and civil monetary penalty laws, which prohibit,

among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from

Medicare, Medicaid, or other third-party payors that are false or fraudulent;

federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal

statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false

statements relating to healthcare matters;

may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, including anti-kickback and false claims

laws, transparency laws, and health information privacy and security laws.

If we are unable to comply, or have not fully complied, with

such laws, we could face substantial penalties.*

current and future operations may be subject to various federal and state fraud and abuse laws, including, without limitation, the federal

Anti-Kickback Statute, the federal False Claims Act, and healthcare professional transparency laws and regulations.

These laws may impact,

among other things, our research activities and our proposed sales, marketing, and education programs.

In addition, we may be subject

to patient privacy regulation by both the federal government and the states in which we conduct our business.

The laws that may affect

our ability to operate include:

federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering

or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service

reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;

civil and criminal false claims laws, including the federal False Claims Act, and civil monetary penalty laws, which prohibit, among

other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid,

or other third-party payors that are false or fraudulent;

federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes

that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating

to healthcare matters;

as amended by the Health Information Technology for Economic and Clinical Health Act, (“HITECH”) and their implementing

regulations, which imposes certain requirements on “covered entities,” including certain healthcare providers,

health plans, and healthcare clearinghouses, as well as their respective “business associates” that create, receive,

maintain or transmit individually identifiable health information for or on behalf of a covered entity, and their subcontractors

that use, disclose, access, or otherwise process individually identifiable protected health information, relating to the privacy,

security, and transmission of individually identifiable health information;

Physician Payments Sunshine Act which requires manufacturers of drugs, devices, biologics, and medical supplies to report

annually to the Centers for Medicare & Medicaid Services (“CMS”), information related to payments and other

transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors) and

teaching hospitals, and ownership and investment interests held by physicians and their immediate family members and applicable

group purchasing organizations, and, beginning in 2022 will require applicable manufacturers to report information regarding

payments and other transfers of value provided during the previous year to physician assistants, nurse practitioners, clinical

nurse specialists, certified nurse anesthetists and anesthesiologist assistants, and certified nurse-midwives;

law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or

services reimbursed by any third-party payors, including commercial insurers, state laws that require pharmaceutical companies

to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated

by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral

state laws that require drug manufacturers to report information related to payments and other transfers of value

to physicians and other healthcare providers, marketing expenditures, or drug pricing, state and local laws that require the

registration of pharmaceutical sales representatives, and state laws governing the privacy and security of health information

in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus

complicating compliance efforts.

of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible

that some of our business activities could be subject to challenge under one or more of such laws.

In addition, recent health

care reform legislation has strengthened these laws.

our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply,

we may be subject to significant penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement,

exclusion from participation in government health care programs, such as Medicare and Medicaid, integrity oversight and reporting

obligations, imprisonment, and the curtailment or restructuring of our operations, any of which could adversely affect our ability

to operate our business and our results of operations.

regulations, which imposes certain requirements on “covered entities,” including certain healthcare providers, health

plans, and healthcare clearinghouses, as well as their respective “business associates” that create, receive, maintain

or transmit individually identifiable health information for or on behalf of a covered entity, and their subcontractors that use,

disclose, access, or otherwise process individually identifiable protected health information, relating to the privacy, security,

and transmission of individually identifiable health information;

Physician Payments Sunshine Act which requires manufacturers of drugs, devices, biologics, and medical supplies to report annually

to the Centers for Medicare & Medicaid Services (“CMS”), information related to payments and other transfers of value

to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors) and teaching hospitals, and ownership

and investment interests held by physicians and their immediate family members and applicable group purchasing organizations, and,

beginning in 2022 will require applicable manufacturers to report information regarding payments and other transfers of value provided

during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists and

anesthesiologist assistants, and certified nurse-midwives;

law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services

reimbursed by any third-party payors, including commercial insurers, state laws that require pharmaceutical companies to comply with

the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal

government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;

that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare

providers, marketing expenditures, or drug pricing, state and local laws that require the registration of pharmaceutical sales representatives,

and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each

other in significant ways and may not have the same effect, thus complicating compliance efforts.

of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that

some of our business activities could be subject to challenge under one or more of such laws.

In addition, recent health care reform

legislation has strengthened these laws.

our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply, we may

be subject to significant penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, exclusion

from participation in government health care programs, such as Medicare and Medicaid, integrity oversight and reporting obligations,

imprisonment, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our

business and our results of operations.

we do not receive regulatory approvals, we will not be permitted to sell our therapeutic and medical device products.

therapeutic and medical device products that we and our subsidiaries develop cannot be sold until the FDA and corresponding foreign

regulatory authorities approve the products for medical use.

The need to obtain regulatory approval to market a new product means

therapeutic and medical device products that we and our subsidiaries develop cannot be sold until the FDA and corresponding foreign regulatory

authorities approve the products for medical use.

The need to obtain regulatory approval to market a new product means that:

will have to conduct expensive and time-consuming clinical trials of new products.

The full cost of conducting and completing

clinical trials necessary to obtain FDA and foreign regulatory approval of a new product cannot be presently determined but

could exceed our current financial resources.

The full cost of conducting and completing clinical

trials necessary to obtain FDA and foreign regulatory approval of a new product cannot be presently determined but could exceed our

current financial resources.

trials and the regulatory approval process for a pharmaceutical or cell-based product can take several years to complete.

As a result, we will incur the expense and delay inherent in seeking FDA and foreign regulatory approval of new products,

even if the results of clinical trials are favorable.

obtained from preclinical and clinical studies is susceptible to varying interpretations and regulatory changes that could

delay, limit, or prevent regulatory agency approvals.

the therapeutic products we are developing with pluripotent stem cell technology involve the application of new technologies

and approaches to medicine, the FDA or foreign regulatory agencies may subject those products to additional or more stringent

review than drugs or biologics derived from other technologies.

we will incur the expense and delay inherent in seeking FDA and foreign regulatory approval of new products, even if the results

of clinical trials are favorable.

obtained from preclinical and clinical studies is susceptible to varying interpretations and regulatory changes that could delay,

limit, or prevent regulatory agency approvals.

the therapeutic products we are developing with pluripotent stem cell technology involve the application of new technologies and

approaches to medicine, the FDA or foreign regulatory agencies may subject those products to additional or more stringent review

than drugs or biologics derived from other technologies.

product that is approved may be subject to restrictions on use.

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Government-imposed

bans or restrictions and religious, moral, and ethical concerns about the use of hES cells could prevent us from developing and

successfully marketing stem cell products.

bans or restrictions and religious, moral, and ethical concerns about the use of hES cells could prevent us from developing and successfully

marketing stem cell products.

Government-imposed

bans or restrictions on the use of embryos or hES cells in research and development in the United States and abroad could generally

constrain stem cell research, thereby limiting the market and demand for our products.

During March 2009, the federal government,

pursuant to a presidential executive order, lifted certain restrictions on federal funding of research involving the use of

hES cells, and in accordance with the executive order, the National Institutes of Health (“NIH”) has adopted

guidelines for determining the eligibility of hES cell lines for use in federally funded research.

The central focus of the guidelines

is to assure that hES cells used in federally funded research were derived from human embryos that were created for reproductive

purposes, were no longer needed for this purpose, and were voluntarily donated for research purposes with the informed written

consent of the donors.

The hES cells that were derived from embryos created for research purposes rather than reproductive purposes,

and other hES cells that were not derived in compliance with the guidelines, are not eligible for use in federally funded research.

California law requires that stem cell research be conducted under the oversight of a stem cell review oversight committee (“SCRO”).

Many kinds of stem cell research, including the derivation of new hES cell lines, may only be conducted in California with the

prior written approval of the SCRO.

A SCRO could prohibit or impose restrictions on the research that we plan to do.

hES cells may give rise to religious, moral, and ethical issues.

These considerations could lead to more restrictive government

regulations or could generally constrain stem cell research, thereby limiting the market and demand for our products.

expect that the commercial opportunity for some of our products may depend on our ability to obtain reimbursement and continued

bans or restrictions on the use of embryos or hES cells in research and development in the United States and abroad could generally constrain

stem cell research, thereby limiting the market and demand for our products.

During March 2009, the federal government, pursuant to a

presidential executive order, lifted certain restrictions on federal funding of research involving the use of hES cells, and in accordance

with the executive order, the National Institutes of Health (“NIH”) has adopted guidelines for determining the eligibility

of hES cell lines for use in federally funded research.

The central focus of the guidelines is to assure that hES cells used in federally

funded research were derived from human embryos that were created for reproductive purposes, were no longer needed for this purpose,

and were voluntarily donated for research purposes with the informed written consent of the donors.

The hES cells that were derived from

embryos created for research purposes rather than reproductive purposes, and other hES cells that were not derived in compliance with

the guidelines, are not eligible for use in federally funded research.

California law requires that stem cell research be conducted under

the oversight of a stem cell review oversight committee (“SCRO”).

Many kinds of stem cell research, including the derivation

of new hES cell lines, may only be conducted in California with the prior written approval of the SCRO.

A SCRO could prohibit or impose

restrictions on the research that we plan to do.

The use of hES cells may give rise to religious, moral, and ethical issues.

These considerations

could lead to more restrictive government regulations or could generally constrain stem cell research, thereby limiting the market and

demand for our products.

expect that the commercial opportunity for some of our products may depend on our ability to obtain and maintain reimbursement and continued

coverage from various payors, including government entities and insurance companies.*

these third-party payors do not consider our products to be cost-effective compared to other therapies, they may not cover our

products as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products

on a profitable basis.

example, in the United States, healthcare providers are reimbursed for covered services and products they deliver through Medicare,

Medicaid and other government healthcare programs, as well as through private payers.

No uniform policy for coverage and reimbursement

exists in the United States, and coverage and reimbursement can differ significantly from payor to payor.

Decisions regarding

whether to cover any of our product candidates, if approved, the extent of coverage and amount of reimbursement to be provided

are made on a plan-by-plan basis.

Third-party payors often rely upon Medicare coverage policy and payment limitations in setting

their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations.

the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and

clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate

reimbursement will be applied consistently or obtained in the first instance.

We may be required to provide specified rebates

or discounts on the products we sell to certain government funded programs, including Medicare and Medicaid, and those rebates

or discounts have increased over time.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education

Reconciliation Act (collectively, the “ACA”), enacted in 2010, increased many of the mandatory discounts and rebates

and imposed a new branded prescription pharmaceutical manufacturers and importers fee payable each year by certain manufacturers.

these third-party payors do not consider our products to be cost-effective compared to other therapies, they may not cover our products

as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products on a profitable

example, in the United States, healthcare providers are reimbursed for covered services and products they deliver through Medicare, Medicaid

and other government healthcare programs, as well as through private payers.

No uniform policy for coverage and reimbursement exists

in the United States, and coverage and reimbursement can differ significantly from payor to payor.

Decisions regarding whether to cover

any of our product candidates, if approved, the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan

Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates,

but also have their own methods and approval process apart from Medicare determinations.

As a result, the coverage determination process

is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our product

candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained

in the first instance.

We may be required to provide specified rebates or discounts on the products we sell to certain government funded

programs, including Medicare and Medicaid, and those rebates or discounts have increased over time.

The Patient Protection and Affordable

Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”), enacted in 2010, increased

many of the mandatory discounts and rebates and imposed a new branded prescription pharmaceutical manufacturers and importers fee payable

each year by certain manufacturers.

we are unable to establish or sustain coverage and adequate reimbursement for any product candidates from third-party payors, the adoption

of those products and sales revenue will be adversely affected, which, in turn, could adversely affect the ability to market or sell

those product candidates, if approved.

Further, coverage policies and third-party payor reimbursement rates may change at any time.

even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented

in the future.

face similar issues outside of the United States.

In some non-U.S.

jurisdictions, the proposed pricing for a drug must be approved

before it may be lawfully marketed.

jurisdictions, the proposed pricing for a drug must be approved before

it may be lawfully marketed.

The requirements governing drug pricing vary widely from country to country.

the EU provides options for its member states to restrict the range of medicinal products for which their national health insurance

systems provide reimbursement and to control the prices of medicinal products for human use.

A member state may approve a specific

price for the medicinal product, or it may instead adopt a system of direct or indirect controls on the profitability of the company

placing the medicinal product on the market.

There can be no assurance that any country that has price controls or reimbursement

limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products.

Historically,

products launched in the EU do not follow price structures of the United States and generally tend to be significantly lower.

For example, the EU provides

options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement

and to control the prices of medicinal products for human use.

A member state may approve a specific price for the medicinal product,

or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on

There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products

will allow favorable reimbursement and pricing arrangements for any of our products.

Historically, products launched in the EU do not

follow price structures of the United States and generally tend to be significantly lower.

at the FDA and other government agencies caused by funding shortages or global health concerns could negatively impact our business.

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including, but not limited to, government budget and funding levels, ability to hire and retain key personnel and accept the payment

of user fees, statutory, regulatory, and policy changes, and other events that may otherwise affect the FDA’s ability to

perform routine functions.

of user fees, statutory, regulatory, and policy changes, and other events that may otherwise affect the FDA’s ability to perform

routine functions.

Average review times at the agency have fluctuated in recent years as a result.

In addition, government

funding of other government agencies that fund research and development activities is subject to the political process, which

is inherently fluid and unpredictable.

In addition, government funding of

other government agencies that fund research and development activities is subject to the political process, which is inherently fluid

and unpredictable.

at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary

government agencies, which would adversely affect our business.

For example, over the last several years, including for 35 days

beginning on December 22, 2018, the U.S.

government has shut down several times and certain regulatory agencies, such as the FDA,

have had to furlough critical FDA employees and stop critical activities.

in response to the global COVID-19 pandemic, in March 2020, the FDA announced its intention to postpone most foreign inspections

of manufacturing facilities and temporarily postponed routine surveillance inspections of domestic manufacturing facilities.

July 2020 domestic inspections restarted only on a risk-based basis.

Regulatory authorities outside the United States may adopt

similar restrictions or other policy measures in response to the COVID-19 pandemic.

If a prolonged government shutdown occurs,

or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections,

reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities

to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

For example, over the last several years, including for 35 days beginning

on December 22, 2018, the U.S.

government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough

critical FDA employees and stop critical activities.

in response to the global COVID-19 pandemic, in March 2020, the FDA announced its intention to postpone most foreign inspections of manufacturing

facilities and temporarily postponed routine surveillance inspections of domestic manufacturing facilities.

In July 2020 domestic inspections

restarted only on a risk-based basis.

Regulatory authorities outside the United States may adopt similar restrictions or other policy

measures in response to the COVID-19 pandemic.

If a prolonged government shutdown occurs, or if global health concerns continue to prevent

the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could

significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions,

which could have a material adverse effect on our business.

ACA and future changes to that law may adversely affect our business.*

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the branded prescription pharmaceutical manufacturers and importers annual fee;

the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% and 13% of the average

manufacturer price for most branded and generic drugs, respectively and capped the total rebate amount for innovator drugs

at 100% of the Average Manufacturer Price;

new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs

and biologics that are inhaled, infused, instilled, implanted or injected;

manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed

care organizations;

eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional

individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal

poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability;

the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% and 13% of the average manufacturer

price for most branded and generic drugs, respectively and capped the total rebate amount for innovator drugs at 100% of the Average

Manufacturer Price.

However, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates

the statutory Medicaid drug rebate cap for single source and innovator multiple source drugs, beginning January 1, 2024;

new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and

biologics that are inhaled, infused, instilled, implanted or injected;

manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care

organizations;

eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals

and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby

potentially increasing manufacturers’ Medicaid rebate liability;

the entities eligible for discounts under the Public Health program;

1 unchanged sentence

research, along with funding for such research;

a Center for Medicare & Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare

and Medicaid spending, potentially including prescription drug spending;

a Center for Medicare & Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and

Medicaid spending, potentially including prescription drug spending;

a licensure framework for follow on biologic products.

have been executive, judicial and Congressional challenges to certain aspects of the ACA, as well as efforts by the Trump administration

to repeal or replace certain aspects of the ACA.

While Congress has not passed comprehensive repeal legislation, it has enacted

laws that modify certain provisions of the ACA such as removing penalties, starting January 1, 2019, for not complying with the

ACA’s individual mandate to carry health insurance, and eliminating the implementation of certain ACA-mandated fees.

December 14, 2018, a Texas U.S.

District Court Judge ruled that the ACA is unconstitutional in its entirety because the “individual

mandate” was repealed by Congress as part of the 2017 Tax Act.

Additionally, on December 18, 2019, the U.S.

Court of Appeals

for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back

to the District Court to determine whether the remaining provisions of the ACA are invalid as well.

Supreme Court is

currently reviewing the constitutionality of the ACA.

Although it is unknown when a decision will be made, on January 28, 2021,

President Biden issued an executive order to initiate a special enrollment period for purposes of obtaining health insurance coverage

through the ACA marketplace, which began February 15, 2021 and will remain open through August 15, 2021.

The executive order also

instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare,

including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies

that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

Further, on February

10, 2021, the Biden administration withdrew the federal government’s support for overturning the ACA.

It is unclear how

the Supreme Court ruling, other such litigation, and the healthcare reform measures of the Biden administration will impact the

have been executive, judicial and Congressional challenges to certain aspects of the ACA.

While Congress has not passed comprehensive

repeal legislation, it has enacted laws that modify certain provisions of the ACA such as removing penalties, starting January 1, 2019,

for not complying with the ACA’s individual mandate to carry health insurance, and eliminating the implementation of certain ACA-mandated

For example, on June 17, 2021, the United States Supreme Court dismissed a challenge on procedural grounds that argued the ACA

is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.

Thus, the ACA will remain

in effect in its current form.

Moreover, prior to the United States Supreme Court ruling, on January 28, 2021, President Biden issued

an executive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace,

which began February 15, 2021 and will remain open through August 15, 2021.

The executive order also instructed certain governmental

agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining

Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to

obtaining access to health insurance coverage through Medicaid or the ACA.

It is possible that the ACA will be subject to judicial or

Congressional challenges in the future.

It is unclear how any such challenges, other litigation, and the healthcare reform measures of

the Biden administration will impact the ACA.

addition, other legislative changes have been proposed and adopted since the ACA was enacted.

For example, the Budget Control

Act of 2011, includes reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013

and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary

suspension from May 1, 2020 through December 31, 2021, unless additional Congressional action is taken.

On January 2, 2013, the

American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers,

including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from

three to five years.

there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising

cost of prescription drugs and biologics.

Such scrutiny has resulted in several recent congressional inquiries and proposed and

enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the

relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for

At the federal level, the Trump administration used several means to propose or implement drug pricing reform, including

through federal budget proposals, executive orders and policy initiatives.

For example, on July 24, 2020 and September 13, 2020,

the Trump administration announced several executive orders related to prescription drug pricing that attempted to implement several

of the administration’s proposals.

As a result, the FDA released a final rule on September 24, 2020, effective November

30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada.

Further, on November 20,

2020, the U.S.

Department of Health & Human Services finalized a regulation removing safe harbor protection for price reductions

from pharmaceutical manufacturers to plan sponsors under Medicare Part D, either directly or through pharmacy benefit managers,

unless the price reduction is required by law.

The implementation of the rule has been delayed by the Biden administration from

January 1, 2022 to January 1, 2023.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale,

as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation

of which have also been delayed by the Biden administration until January 1, 2023.

On November 20, 2020, CMS issued an interim

final rule implementing President Trump’s Most Favored Nation executive order, which would tie Medicare Part B payments

for certain physician-administered drugs to the lowest price paid in other economically advanced countries.

The Most Favored Nation

regulations mandate participation by identified Medicare Part B providers and will apply in all U.S.

states and territories for

a seven-year period beginning January 1, 2021, and ending December 31, 2027.

On December 28, 2020, the United States District

Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule.

unclear whether the Biden administration will work to reverse these measures or pursue similar policy initiatives.

level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product

pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing

cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk

For example, the Budget Control Act of

2011, includes reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to

subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from

May 1, 2020 through December 31, 2021, unless additional Congressional action is taken.

On January 2, 2013, the American Taxpayer Relief

Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and

increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost

of prescription drugs and biologics.

Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal

and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing

and manufacturer patient programs, and reform government program reimbursement methodologies for products.

At the federal level, the

Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive

orders and policy initiatives.

For example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive

orders related to prescription drug pricing that attempted to implement several of the administration’s proposals.

the FDA released a final rule on September 24, 2020, effective November 30, 2020, providing guidance for states to build and submit importation

plans for drugs from Canada.

Further, on November 20, 2020, the U.S.

Department of Health & Human Services finalized a regulation

removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Medicare Part D, either

directly or through pharmacy benefit managers, unless the price reduction is required by law.

The implementation of the rule has been

delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation.

The rule also creates

a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements

between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed by the Biden administration until

January 1, 2023.

On November 20, 2020, CMS issued an interim final rule implementing President Trump’s Most Favored Nation executive

order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically

advanced countries.

The Most Favored Nation regulations mandate participation by identified Medicare Part B providers and will apply

states and territories for a seven-year period beginning January 1, 2021, and ending December 31, 2027.

On December 28, 2020,

the United States District Court for the Northern District of California issued a nationwide preliminary injunction against implementation

of the interim final rule.

On January 13, 2021, in a separate lawsuit brought by industry groups in the United States District Court

of Maryland, the government defendants entered a joint motion to stay litigation on the condition that the government would not appeal

the preliminary injunction granted in the United States District Court for the Northern District of California and that performance for

any final regulation stemming from the Most Favored Nation Model interim final rule shall not commence earlier than sixty (60) days after

publication of that regulation in the Federal Register.

Additionally, based on a recent executive order, the Biden administration expressed

its intent to pursue certain policy initiatives to reduce drug prices.

At the state level, legislatures have increasingly passed legislation

and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints,

discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed

to encourage importation from other countries and bulk purchasing.

addition, it is possible that additional governmental action is taken to address the COVID-19 pandemic.

we fail to comply with the extensive legal and regulatory requirements affecting the health care industry, we could face increased

costs, penalties and a loss of business.

we fail to comply with the extensive legal and regulatory requirements affecting the health care industry, we could face increased costs,

penalties and a loss of business.

activities, and the activities of our collaborators, distributors and other third-party providers, are subject to extensive government

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and in foreign jurisdictions.

The FDA and comparable agencies in other jurisdictions

will directly regulate many of our most critical business activities, including the conduct of preclinical and clinical studies,

product manufacturing, advertising and promotion, product distribution, adverse event reporting and product risk management.

interactions in the U.S.

or abroad with physicians and other health care providers that may prescribe or purchase our products

are also subject to government regulation designed to prevent fraud and abuse in the sale and use of the products and place greater

restrictions on the marketing practices of health care companies.

Health care companies are facing heightened scrutiny of their

relationships with health care providers from anti-corruption enforcement officials.

In addition, health care companies have been

the target of lawsuits and investigations alleging violations of government regulation, including claims asserting submission

of incorrect pricing information, impermissible off-label promotion of pharmaceutical products, payments intended to influence

the referral of health care business, submission of false claims for government reimbursement, antitrust violations or violations

related to environmental matters.

Risks relating to compliance with laws and regulations may be heightened as we bring products

to the market globally.

The FDA and comparable agencies in other jurisdictions will directly

regulate many of our most critical business activities, including the conduct of preclinical and clinical studies, product manufacturing,

advertising and promotion, product distribution, adverse event reporting and product risk management.

Our interactions in the U.S.

abroad with physicians and other health care providers that may prescribe or purchase our products are also subject to government regulation

designed to prevent fraud and abuse in the sale and use of the products and place greater restrictions on the marketing practices of

health care companies.

Health care companies are facing heightened scrutiny of their relationships with health care providers from anti-corruption

enforcement officials.

In addition, health care companies have been the target of lawsuits and investigations alleging violations of

government regulation, including claims asserting submission of incorrect pricing information, impermissible off-label promotion of pharmaceutical

products, payments intended to influence the referral of health care business, submission of false claims for government reimbursement,

antitrust violations or violations related to environmental matters.

Risks relating to compliance with laws and regulations may be heightened

as we bring products to the market globally.

governing the health care industry are subject to change, with possibly retroactive effect, including:

laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to health

care availability, pricing or marketing practices, compliance with wage and hour laws and other employment practices, method

of delivery, payment for health care products and services, compliance with health information and data privacy and security

laws and regulations, tracking and reporting payments and other transfers of value made to physicians and teaching hospitals,

extensive anti-bribery and anti-corruption prohibitions, product serialization and labeling requirements and used product

take-back requirements;

in the FDA and foreign regulatory approval processes that may delay or prevent the approval of new products and result in

lost market opportunity;

laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to health care

availability, pricing or marketing practices, compliance with wage and hour laws and other employment practices, method of delivery,

payment for health care products and services, compliance with health information and data privacy and security laws and regulations,

tracking and reporting payments and other transfers of value made to physicians and teaching hospitals, extensive anti-bribery and

anti-corruption prohibitions, product serialization and labeling requirements and used product take-back requirements;

in the FDA and foreign regulatory approval processes that may delay or prevent the approval of new products and result in lost market

that provide for increased transparency of clinical trial results and quality data, such as the EMA’s clinical transparency

policy, which could impact our ability to protect trade secrets and competitively sensitive information contained in approval

applications or could be misinterpreted leading to reputational damage, misperception or legal action which could harm our

policy, which could impact our ability to protect trade secrets and competitively sensitive information contained in approval applications

or could be misinterpreted leading to reputational damage, misperception or legal action which could harm our business;

in FDA and foreign regulations that may require additional safety monitoring, labeling changes, restrictions on product distribution

or use, or other measures after the introduction of our products to market, which could increase our costs of doing business,

adversely affect the future permitted uses of approved products, or otherwise adversely affect the market for our products.

or use, or other measures after the introduction of our products to market, which could increase our costs of doing business, adversely

affect the future permitted uses of approved products, or otherwise adversely affect the market for our products.

of governmental regulation may be punishable by criminal and civil sanctions against us, including fines and civil monetary penalties

and exclusion from participation in government programs, including Medicare and Medicaid, as well as against executives overseeing

our business.

In addition to penalties for violation of laws and regulations, we could be required to repay amounts we received

from government payors or pay additional rebates and interest if we are found to have miscalculated the pricing information we

have submitted to the government.

We cannot ensure that our compliance controls, policies and procedures will in every instance

protect us from acts committed by our employees, collaborators, partners or third-party providers that would violate the laws

or regulations of the jurisdictions in which we operate.

Whether or not we have complied with the law, an investigation into alleged

unlawful conduct could increase our expenses, damage our reputation, divert management time and attention and adversely affect

our business.

and exclusion from participation in government programs, including Medicare and Medicaid, as well as against executives overseeing our

In addition to penalties for violation of laws and regulations, we could be required to repay amounts we received from government

payors or pay additional rebates and interest if we are found to have miscalculated the pricing information we have submitted to the

We cannot ensure that our compliance controls, policies and procedures will in every instance protect us from acts committed

by our employees, collaborators, partners or third-party providers that would violate the laws or regulations of the jurisdictions in

which we operate.

Whether or not we have complied with the law, an investigation into alleged unlawful conduct could increase our expenses,

damage our reputation, divert management time and attention and adversely affect our business.

if we receive approval for our products, we may be subject to extensive regulatory obligations in order to commercialize our products.

after initial FDA or foreign regulatory agency approval has been obtained, further studies may be required to provide additional

data on safety or to gain approval for the use of a product as a treatment for clinical indications other than those initially

Use of a product during testing and after marketing could reveal side effects that could delay, impede, or prevent marketing

approval, result in a regulatory agency-ordered product recall, or in regulatory agency-imposed limitations on permissible uses

or in withdrawal of approval.

For example, if the FDA or foreign regulatory agency becomes aware of new safety information after

approval of a product, it may require us to conduct further clinical trials to assess a known or potential serious risk and to

assure that the benefit of the product outweigh the risks.

If we are required to conduct such a post-approval study, periodic

status reports must be submitted to the FDA or foreign regulatory agency.

Failure to conduct such post-approval studies in a timely

manner may result in substantial civil or criminal penalties.

Data resulting from these clinical trials may result in expansions

or restrictions to the labeled indications for which a product has already been approved.

Any of these requirements or actions

may negatively impact our business or operations.

we are deemed to be an investment company, we may have to institute burdensome compliance requirements and our activities may

be restricted.

after initial FDA or foreign regulatory agency approval has been obtained, further studies may be required to provide additional data

on safety or to gain approval for the use of a product as a treatment for clinical indications other than those initially targeted.

of a product during testing and after marketing could reveal side effects that could delay, impede, or prevent marketing approval, result

in a regulatory agency-ordered product recall, or in regulatory agency-imposed limitations on permissible uses or in withdrawal of approval.

For example, if the FDA or foreign regulatory agency becomes aware of new safety information after approval of a product, it may require

us to conduct further clinical trials to assess a known or potential serious risk and to assure that the benefit of the product outweigh

If we are required to conduct such a post-approval study, periodic status reports must be submitted to the FDA or foreign

regulatory agency.

Failure to conduct such post-approval studies in a timely manner may result in substantial civil or criminal penalties.

Data resulting from these clinical trials may result in expansions or restrictions to the labeled indications for which a product has

already been approved.

Any of these requirements or actions may negatively impact our business or operations.

we are deemed to be an investment company, we may have to institute burdensome compliance requirements and our activities may be restricted.

entity that, among other things, is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business

of investing, reinvesting, owning, trading or holding certain types of securities would be deemed an investment company under

the Investment Company Act of 1940, as amended (the “1940 Act”).

Based on the securities we hold, including our equity

ownership in publicly traded companies, we may not meet the requirements for an exemption promulgated under the 1940 Act.

are deemed to be an investment company under the 1940 Act, we would be subject to additional limitations on operating our business,

including limitations on the issuance of securities, which may make it difficult for us to raise capital.

of investing, reinvesting, owning, trading or holding certain types of securities would be deemed an investment company under the Investment

Company Act of 1940, as amended (the “1940 Act”).

Based on the securities we hold, including our equity ownership in publicly

traded companies, we may not meet the requirements for an exemption promulgated under the 1940 Act.

If we are deemed to be an investment

company under the 1940 Act, we would be subject to additional limitations on operating our business, including limitations on the issuance

of securities, which may make it difficult for us to raise capital.

Related to Our Clinical Development and Commercial Operations

studies are costly, time consuming and are subject to risks that could delay or prevent commercialization of our current or future

product candidates.

studies are costly, time consuming and are subject to risks that could delay or prevent commercialization of our current or future product

cannot guarantee that any clinical studies will be conducted as planned or completed on schedule, if at all.

A failure of one

or more clinical studies can occur at any stage of development.

Events that may prevent successful or timely completion of clinical

development include but are not limited to:

to generate satisfactory preclinical, toxicology, or other in vivo or in vitro data or diagnostics to support

the initiation or continuation of clinical studies necessary for product approval;

in securing clinical investigators and agreeing on acceptable terms with contract research organizations (“CROs”)

and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among CROs

and clinical trial sites;

A failure of one or more

clinical studies can occur at any stage of development.

Events that may prevent successful or timely completion of clinical development

include but are not limited to:

to generate satisfactory preclinical, toxicology, or other in vivo or in vitro data or diagnostics to support the initiation

or continuation of clinical studies necessary for product approval;

in securing clinical investigators and agreeing on acceptable terms with contract research organizations (“CROs”) and

clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among CROs and clinical

in obtaining required Institutional Review Board (“IRB”) approval at each clinical trial site;

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or equivalent foreign application or amendment;

than anticipated rates of patient recruitment and enrollment (including as a result of actual or threatened public health

emergencies and outbreaks of disease such as the current COVID-19 pandemic), failing to reach the targeted number of patients

due to competition for patients from other trials, or patients dropping out of our clinical studies once enrolled;

than anticipated rates of patient recruitment and enrollment (including as a result of actual or threatened public health emergencies

and outbreaks of disease such as the current COVID-19 pandemic), failing to reach the targeted number of patients due to competition

for patients from other trials, or patients dropping out of our clinical studies once enrolled;

by clinical sites or our CROs or other third parties to adhere to clinical trial requirements or report complete findings;

to perform the clinical studies in accordance with the FDA’s good clinical practices requirements or applicable foreign

regulatory guidelines;

to perform the clinical studies in accordance with the FDA’s good clinical practices requirements or applicable foreign regulatory

of adverse events associated with our product candidates or with product candidates of third parties that may have characteristics

similar to or perceived to be similar to our product candidates;

or inconclusive results from our clinical trials which may result in our deciding, or regulators requiring us, to conduct

additional clinical studies or to curtail or abandon development programs for a product candidate;

or inconclusive results from our clinical trials which may result in our deciding, or regulators requiring us, to conduct additional

clinical studies or to curtail or abandon development programs for a product candidate;

side effects, possibly resulting in the FDA or other regulatory authorities denying approval of our product candidates;

and introduction of new therapies or changes in standards of practice or regulatory guidance that render our clinical trial

endpoints or the targeting of our proposed indications obsolete;

to monitor patients adequately during or after treatment or problems with investigator or patient compliance with the trial

and introduction of new therapies or changes in standards of practice or regulatory guidance that render our clinical trial endpoints

or the targeting of our proposed indications obsolete;

to monitor patients adequately during or after treatment or problems with investigator or patient compliance with the trial protocols;

or unwillingness of medical investigators to follow our clinical protocols;

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cost of clinical studies of our product candidates;

in agreeing on acceptable terms with third-party manufacturers and the time for manufacture of sufficient quantities of our

product candidates for use in clinical studies.

inability to successfully complete clinical development and obtain regulatory approval could result in additional costs to us

or impair our ability to generate revenue.

Clinical trial delays could also shorten any periods during which our products have

patent protection and may allow competitors to develop and bring products to market before we do and may harm our business and

results of operations.

in agreeing on acceptable terms with third-party manufacturers and the time for manufacture of sufficient quantities of our product

candidates for use in clinical studies.

inability to successfully complete clinical development and obtain regulatory approval could result in additional costs to us or impair

our ability to generate revenue.

Clinical trial delays could also shorten any periods during which our products have patent protection

and may allow competitors to develop and bring products to market before we do and may harm our business and results of operations.

and preclinical drug development involves a lengthy and expensive process with an uncertain outcome.

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trials and clinical trials of our product candidates are not necessarily predictive of future results.

Our product candidates

may not have favorable results in later clinical trials, if any, or receive regulatory approval on a timely basis, if at all.

Our product candidates may not

have favorable results in later clinical trials, if any, or receive regulatory approval on a timely basis, if at all.

and preclinical drug development is expensive and can take many years to complete, and its outcome is inherently uncertain.

clinical trials may not be conducted as planned or completed on schedule, if at all, and failure can occur at any time during

the preclinical trial or clinical trial process.

All of our product candidates will require substantial additional development,

and no assurances can be given that the development of any of our product candidates will ultimately be successful.

may from time to time disclose results from preclinical testing or preliminary data or interim results from our clinical studies

of our product candidates, and earlier clinical studies, including clinical studies with similar product candidates, these are

not necessarily predictive of future results, including clinical trial results.

The historical failure rate for product candidates

in our industry is high.

results of our current and future clinical trials may differ from results achieved in earlier preclinical and clinical studies

for a variety of reasons, including:

trials may not be conducted as planned or completed on schedule, if at all, and failure can occur at any time during the preclinical

trial or clinical trial process.

All of our product candidates will require substantial additional development, and no assurances can

be given that the development of any of our product candidates will ultimately be successful.

Although we may from time to time disclose

results from preclinical testing or preliminary data or interim results from our clinical studies of our product candidates, and earlier

clinical studies, including clinical studies with similar product candidates, these are not necessarily predictive of future results,

including clinical trial results.

The historical failure rate for product candidates in our industry is high.

results of our current and future clinical trials may differ from results achieved in earlier preclinical and clinical studies for a

variety of reasons, including:

may not demonstrate the potency and efficacy benefits observed in previous studies;

efforts to improve, standardize and automate the manufacture of our product candidates, including OpRegen ® ,

OPC1 and VAC2, and any resulting deviations in the manufacture of our product candidates, may adversely affect the safety,

purity, potency or efficacy of such product candidates;

OPC1 and VAC2, and any resulting deviations in the manufacture of our product candidates, may adversely affect the safety, purity,

potency or efficacy of such product candidates;

in trial design, including differences in size, eligibility criteria, and patient populations;

in the standard of care may affect our ability to demonstrate efficacy or achieve trial endpoints in our current or future

clinical trials;

in the standard of care may affect our ability to demonstrate efficacy or achieve trial endpoints in our current or future clinical

issues or adverse events in patients that enroll in our current or future clinical trials;

in preclinical and clinical tests may not be repeated in subsequent tests or be predictive of future results.

of May 3, 2021, data presented from the fully enrolled 24 patient Phase 1/2a open-label trial showed that both the surgical procedure

and the OpRegen cells were generally well tolerated, with no treatment-related systemic serious adverse events reported.

corrected visual acuity of the better vision Cohort 4 patients has improved or remained stable in 10/12 (83%) and these patients

are being closely monitored for additional evidence of clinical benefit.

However, we do not know how OpRegen will perform in future

clinical trials.

is not uncommon to observe results in clinical trials that are unexpected based on preclinical trials and early clinical trials,

and many product candidates fail in clinical trials despite very promising early results.

Moreover, preclinical and clinical data

may be susceptible to varying interpretations and analyses.

A number of companies in the biotechnology industry have suffered

significant setbacks in clinical development even after achieving promising results in earlier studies.

as a result of the COVID-19 pandemic, if patients drop out of our clinical trials, miss scheduled doses or follow-up visits or

otherwise fail to follow clinical trial protocols, or if our clinical trials are otherwise disrupted due to COVID-19 or actions

taken to slow its spread, the integrity of data from our clinical trials may be compromised or not accepted by the FDA or other

regulatory authorities, which would represent a significant setback for the applicable program.

if our current and planned clinical trials are successful, we will need to conduct additional clinical trials, which may include

registrational trials, trials in additional patient populations or under different treatment conditions, and trials using different

manufacturing protocols, processes, materials or facilities or under different manufacturing conditions, before we are able to

seek approvals for our product candidates from the FDA and regulatory authorities outside the United States to market and sell

these product candidates.

Our failure to meet the requirements to support marketing approval for our product candidates in our

ongoing and future clinical trials would substantially harm our business and prospects.

For the foregoing reasons, our ongoing

and planned clinical trials may not be successful, which could have a material adverse effect on our business, financial condition

and results of operations.

topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient

data become available and are subject to audit and verification procedures that could result in material changes in the final

June 1, 2021, we provided an update to the fully enrolled 24 patient Phase 1/2a open-label trial for OpRegen.

Data presented showed that

restoration of retinal tissue previously report in one subject had been observed in two additional Cohort 4 patients, increasing the

total to three patients who integrated new RPE cells, and layers of retinal tissue in areas that previously showed no presence of any

of these cells.

All three patient’s visual acuity increased above baseline levels within 6 months post-transplant.

The best corrected

visual acuity of the better vision Cohort 4 patients has improved or remained stable in 10/12 (83%) and these patients are being closely

monitored for additional evidence of clinical benefit.

The totality of these findings supports the view that atrophic AMD is not an irreversible

degenerative condition.

OpRegen has been well tolerated with no unexpected adverse events, and evidence of durable engraftment of OpRegen

RPE cells have extended to more than 5 years post-transplant in earliest treated patients.

However, we do not know how OpRegen will perform

in future clinical trials.

is not uncommon to observe results in clinical trials that are unexpected based on preclinical trials and early clinical trials, and

many product candidates fail in clinical trials despite very promising early results.

Moreover, preclinical and clinical data may be

susceptible to varying interpretations and analyses.

A number of companies in the biotechnology industry have suffered significant setbacks

in clinical development even after achieving promising results in earlier studies.

as a result of the COVID-19 pandemic, if patients drop out of our clinical trials, miss scheduled doses or follow-up visits or otherwise

fail to follow clinical trial protocols, or if our clinical trials are otherwise disrupted due to COVID-19 or actions taken to slow its

spread, the integrity of data from our clinical trials may be compromised or not accepted by the FDA or other regulatory authorities,

which would represent a significant setback for the applicable program.

if our current and planned clinical trials are successful, we will need to conduct additional clinical trials, which may include registrational

trials, trials in additional patient populations or under different treatment conditions, and trials using different manufacturing protocols,

processes, materials or facilities or under different manufacturing conditions, before we are able to seek approvals for our product

candidates from the FDA and regulatory authorities outside the United States to market and sell these product candidates.

to meet the requirements to support marketing approval for our product candidates in our ongoing and future clinical trials would substantially

harm our business and prospects.

For the foregoing reasons, our ongoing and planned clinical trials may not be successful, which could

have a material adverse effect on our business, financial condition and results of operations.

topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become

available and are subject to audit and verification procedures that could result in material changes in the final data.

time to time, we may publicly disclose preliminary or topline data from our clinical trials, which is based on a preliminary analysis

of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive

review of the data related to the particular trial.

We also make assumptions, estimations, calculations and conclusions as part

of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.

the topline results that we report may differ from future results of the same studies, or different conclusions or considerations

may qualify such results, once additional data have been received and fully evaluated.

Topline data also remain subject to audit

and verification procedures that may result in the final data being materially different from the preliminary data we previously

As a result, topline data should be viewed with caution until the final data are available.

From time to time, we may

also disclose interim data from our clinical trials.

Interim data from clinical trials that we may complete are subject to the

risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become

Adverse differences between preliminary or interim data and final data could significantly harm our business prospects.

of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review

of the data related to the particular trial.

We also make assumptions, estimations, calculations and conclusions as part of our analyses

of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.

As a result, the topline results

that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results,

once additional data have been received and fully evaluated.

Topline data also remain subject to audit and verification procedures that

may result in the final data being materially different from the preliminary data we previously published.

As a result, topline data

should be viewed with caution until the final data are available.

From time to time, we may also disclose interim data from our clinical

Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may

materially change as patient enrollment continues and more patient data become available.

Adverse differences between preliminary or

interim data and final data could significantly harm our business prospects.

others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses

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or commercialization of the particular product candidate or product and our company in general.

In addition, the information we

choose to publicly disclose regarding a particular trial is based on what is typically extensive information, and you or others

may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any

information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views,

activities or otherwise regarding a particular product candidate or our business.

If the topline data that we report differ from

actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval

for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financial

we have multiple cell therapy programs in clinical development, we may expend our limited resources to pursue a particular product

candidate and fail to capitalize on product candidates that may be more profitable or for which there is a greater likelihood

In addition, the information we choose

to publicly disclose regarding a particular trial is based on what is typically extensive information, and you or others may not agree

with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine

not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding

a particular product candidate or our business.

If the topline data that we report differ from actual results, or if others, including

regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates

may be harmed, which could harm our business, operating results, prospects or financial condition.

we have multiple cell therapy programs in clinical development, we may expend our limited resources to pursue a particular product candidate

and fail to capitalize on product candidates that may be more profitable or for which there is a greater likelihood of success.

have three cell therapy programs in clinical development.

OpRegen is currently in a Phase 1/2a multicenter clinical trial for

the treatment of dry AMD, OPC-1 is currently in a Phase 1/2a clinical trial for acute spinal cord injuries, and VAC2 is in a Phase

1 clinical trial in non-small cell lung cancer.

As a result of these and other future clinical trials for these product candidates

or any of our future product candidates may make our decision as to which product candidates to focus on more difficult and we

may forgo or delay pursuit of opportunities with other product candidates that could have had greater commercial potential or

likelihood of success.

OpRegen is currently in a Phase 1/2a multicenter clinical trial for the treatment

of dry AMD, OPC-1 is currently in a Phase 1/2a clinical trial for subacute spinal cord injuries, and VAC2 is in a Phase 1 clinical trial

in non-small cell lung cancer.

As a result of these and other future clinical trials for these product candidates or any of our future

product candidates may make our decision as to which product candidates to focus on more difficult and we may forgo or delay pursuit

of opportunities with other product candidates that could have had greater commercial potential or likelihood of success.

resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.

Our spending on current and future research and development programs and product candidates may not yield any commercially viable

If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may

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

spending on current and future research and development programs and product candidates may not yield any commercially viable products.

If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may 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.

Additionally,

we may pursue additional in-licenses or acquisitions of development-stage assets or programs, which entails additional risk to

Identifying, selecting and acquiring promising product candidates requires substantial technical, financial and human resources

Efforts to do so may not result in the actual acquisition or license of a particular product candidate, potentially

resulting in a diversion of our management’s time and the expenditure of our resources with no resulting benefit.

if we are unable to identify programs that ultimately result in approved products, we may spend material amounts of our capital

and other resources evaluating, acquiring and developing products that ultimately do not provide a return on our investment.

we may pursue additional in-licenses or acquisitions of development-stage assets or programs, which entails additional risk to us.

selecting and acquiring promising product candidates requires substantial technical, financial and human resources expertise.

to do so may not result in the actual acquisition or license of a particular product candidate, potentially resulting in a diversion

of our management’s time and the expenditure of our resources with no resulting benefit.

For example, if we are unable to identify

programs that ultimately result in approved products, we may spend material amounts of our capital and other resources evaluating, acquiring

and developing products that ultimately do not provide a return on our investment.

commercial success of any of our current or future product candidates will depend upon the degree of market acceptance by physicians,

patients, third-party payors, other health care providers and others in the medical community.

if a product candidate obtains regulatory approval, its commercial success will depend in part on physicians, patients, third-party

payors, other health care providers and others in the medical community accepting our product candidates as medically useful,

cost-effective, and safe.

if a product candidate obtains regulatory approval, its commercial success will depend in part on physicians, patients, third-party payors,

other health care providers and others in the medical community accepting our product candidates as medically useful, cost-effective,

Any product we bring to the market may not gain market acceptance by such parties.

The degree of market

acceptance of any of our products will depend on several factors, including without limitation:

The degree of market acceptance of any of

our products will depend on several factors, including without limitation:

efficacy of the product as demonstrated in clinical trials and potential advantages over competing treatments;

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if a product displays a favorable efficacy and safety profile upon approval, market acceptance of the product will be uncertain.

Efforts to educate the medical community and third-party payors on the benefits of the products may require significant investment

and resources and may never succeed.

If our products fail to achieve an adequate level of acceptance by physicians, patients,

third-party payors, other health care providers and others in the medical community, we will not be able to generate sufficient

revenue to become or remain profitable.

the market opportunities for our product candidates are smaller than we believe and estimate they are, we may not meet our revenue

expectations and our business may suffer.

to educate the medical community and third-party payors on the benefits of the products may require significant investment and resources

and may never succeed.

If our products fail to achieve an adequate level of acceptance by physicians, patients, third-party payors, other

health care providers and others in the medical community, we will not be able to generate sufficient revenue to become or remain profitable.

the market opportunities for our product candidates are smaller than we believe and estimate they are, we may not meet our revenue expectations

and our business may suffer.

projections of the number of potential users in the markets we are attempting to address are based on our beliefs and estimates.

Our estimates have been derived from a variety of sources, including market research and publications and scientific literature

estimating the total number of potential patients and currently approved or used therapies.

Our estimates are also based on assumptions

regarding the potential size of the market assuming broad regulatory approval or potential usage by physicians beyond the approved

Any of our estimates may prove to be incorrect.

The scope of approval and potential use of any product candidate may be

significantly narrower, and the number of patients may turn out to be lower than expected.

Competitive products or approaches

may be approved or come into use and the potentially addressable patient population for each of our product candidates may be

limited or may not be amenable to treatment with our product candidates, and new patients may become increasingly difficult to

identify or gain access to, any which could adversely affect our results of operations and our business.

estimates have been derived from a variety of sources, including market research and publications and scientific literature estimating

the total number of potential patients and currently approved or used therapies.

Our estimates are also based on assumptions regarding

the potential size of the market assuming broad regulatory approval or potential usage by physicians beyond the approved label.

our estimates may prove to be incorrect.

The scope of approval and potential use of any product candidate may be significantly narrower,

and the number of patients may turn out to be lower than expected.

Competitive products or approaches may be approved or come into use

and the potentially addressable patient population for each of our product candidates may be limited or may not be amenable to treatment

with our product candidates, and new patients may become increasingly difficult to identify or gain access to, any which could adversely

affect our results of operations and our business.

of the products we may develop will be adversely affected by the availability of competing products.

products and product candidates will face substantial competition, whether through the development of safer and more effective

alternatives to our products, lower costs to administer than our products or other forms of competition such as more favorable

distribution, reimbursement and pricing or formulary and health care provider acceptance.

products and product candidates will face substantial competition, whether through the development of safer and more effective alternatives

to our products, lower costs to administer than our products or other forms of competition such as more favorable distribution, reimbursement

and pricing or formulary and health care provider acceptance.

cell therapy industry is characterized by rapidly evolving technology and intense competition.

Our competitors include major multinational

pharmaceutical companies, specialty biotechnology companies, and chemical and medical products companies operating in the fields

of regenerative medicine, cell therapy, tissue engineering, and tissue regeneration.

Many of these companies are well established

and possess technical, research and development, financial, and sales and marketing resources significantly greater than ours.

In addition, certain smaller biotechnology companies have formed strategic collaborations, partnerships, and other types of joint

ventures with larger, well-established industry competitors that afford the smaller companies’ potential research and development

as well as commercialization advantages.

Academic institutions, governmental agencies, and other public and private research organizations

are also conducting and financing research activities, which may produce products directly competitive to those we are developing.

pharmaceutical companies, specialty biotechnology companies, and chemical and medical products companies operating in the fields of regenerative

medicine, cell therapy, tissue engineering, and tissue regeneration.

Many of these companies are well established and possess technical,

research and development, financial, and sales and marketing resources significantly greater than ours.

In addition, certain smaller

biotechnology companies have formed strategic collaborations, partnerships, and other types of joint ventures with larger, well-established

industry competitors that afford the smaller companies’ potential research and development as well as commercialization advantages.

Academic institutions, governmental agencies, and other public and private research organizations are also conducting and financing research

activities, which may produce products directly competitive to those we are developing.

believe that some of our competitors are trying to develop pluripotent cells and human embryonic progenitor cell (“hEPC”)

based technologies and products that may compete with our stem cell products based on efficacy, safety, cost, and intellectual

property positions.

based technologies and products that may compete with our stem cell products based on efficacy, safety, cost, and intellectual property

Ocata, which was acquired by a subsidiary of Astellas Pharma Inc., and Retinal Patch Technologies Inc.

conducting clinical trials of hES cell products designed to treat age-related macular degeneration.

If their products are proven

to be safe and effective, they may reach the market ahead of OpRegen.

may also face competition from companies that have filed patent applications relating to the propagation and differentiation of

are conducting clinical

trials of hES cell products designed to treat age-related macular degeneration.

If their products are proven to be safe and effective,

they may reach the market ahead of OpRegen.

may also face competition from companies that have filed patent applications relating to the propagation and differentiation of stem

Those companies include Ocata, which in 2015 had certain U.S.

patents issue with claims directed to methods of producing

RPE cells and isolating and purifying such cells.

We may be required to seek licenses from these competitors in order to commercialize

certain products proposed by us, and such licenses may not be granted.

patents issue with claims directed to methods of producing RPE cells

and isolating and purifying such cells.

We may be required to seek licenses from these competitors in order to commercialize certain

products proposed by us, and such licenses may not be granted.

products may make any products we develop obsolete or noncompetitive before we recover the expense of developing and commercializing

our product candidates.

If we are unable to compete effectively, our opportunity to generate revenue from the sale of our products

we may develop, if approved, could be adversely affected.

will face risks related to our own manufacturing capabilities and those related to our reliance on third parties to manufacture

products, including those related to product acquisition costs, production delays, and supply shortages that could impair our

ability to complete the development and commercialization of our product candidates.

manufacture of medical products is complex and requires significant expertise and capital investment, including the development

of advanced manufacturing techniques and process controls.

Although we have manufacturing capability through Cell Cure for OpRegen,

OPC1, and VAC2 in Israel, we will need greater manufacturing capacity if we are to successfully commercialize our products.

we can raise the capital required to construct our own commercial scale manufacturing facilities and can develop the expertise

to manage and operate a manufacturing facility of our own, we may need to rely on third-party manufacturers to manufacture any

products we develop.

There is no assurance that we will be able to identify manufacturers on acceptable terms or at all.

of whether we do our own manufacturing or rely on third parties to manufacture products for us, we will face risks related to

the manufacture of our products including these risks:

or any third-party manufacturers might not timely formulate and manufacture our products or produce the quantity and quality

required to meet our clinical and commercial needs, if any.

If we are unable to compete effectively, our opportunity to generate revenue from the sale of our products we

may develop, if approved, could be adversely affected.

will face risks related to our own manufacturing capabilities and those related to our reliance on third parties to manufacture products,

including those related to product acquisition costs, production delays, and supply shortages that could impair our ability to complete

the development and commercialization of our product candidates.

manufacture of medical products is complex and requires significant expertise and capital investment, including the development of advanced

manufacturing techniques and process controls.

Although we have manufacturing capability through Cell Cure for OpRegen, OPC1, and VAC2

in Israel, we will need greater manufacturing capacity if we are to successfully commercialize our products.

Unless we can raise the

capital required to construct our own commercial scale manufacturing facilities and can develop the expertise to manage and operate a

manufacturing facility of our own, we may need to rely on third-party manufacturers to manufacture any products we develop.

no assurance that we will be able to identify manufacturers on acceptable terms or at all.

Regardless of whether we do our own manufacturing

or rely on third parties to manufacture products for us, we will face risks related to the manufacture of our products including these

or any third-party manufacturers might not timely formulate and manufacture our products or produce the quantity and quality required

to meet our clinical and commercial needs, if any.

or any third-party manufacturers may not execute our manufacturing procedures appropriately.

third-party manufacturers we engage may not perform as agreed or may not remain in the contract manufacturing business for

the time required to supply our clinical trials or to successfully produce, store and distribute our products on a commercial

or any third-party manufacturers will be subject to ongoing periodic unannounced inspection by the FDA and corresponding state

agencies to ensure strict compliance with current good manufacturing practices (“cGMP”), and other government

regulations and corresponding foreign standards.

We will not have control over third-party manufacturers’ compliance

with applicable regulations and standards.

may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers

in the manufacturing process for our product candidates.

third-party manufacturers we engage may not perform as agreed or may not remain in the contract manufacturing business for the time

required to supply our clinical trials or to successfully produce, store and distribute our products on a commercial scale.

or any third-party manufacturers will be subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies

to ensure strict compliance with current good manufacturing practices (“cGMP”), and other government regulations and

corresponding foreign standards.

We will not have control over third-party manufacturers’ compliance with applicable regulations

and standards.

may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in

the manufacturing process for our product candidates.

may not obtain licenses for third-party intellectual property rights needed by manufacturers to produce our products.

manufacturers could breach or terminate their agreements with us.

or third-party manufacturers may experience manufacturing difficulties as a result of resource constraints, labor disputes,

unstable political environments, natural disasters, public health crises such as pandemics and epidemics, political crises

such as terrorism, war, political insecurity or other conflict, or other events outside of our or our third-party manufacturers

control (including as a result of actual or threatened public health emergencies and outbreaks of disease such as the current

COVID-19 pandemic).

This may result in business closures that affect us and our third-party manufacturers.

or third-party manufacturers may experience manufacturing difficulties as a result of resource constraints, labor disputes, unstable

political environments, natural disasters, public health crises such as pandemics and epidemics, political crises such as terrorism,

war, political insecurity or other conflict, or other events outside of our or our third-party manufacturers control (including as

a result of actual or threatened public health emergencies and outbreaks of disease such as the current COVID-19 pandemic).

may result in business closures that affect us and our third-party manufacturers.

addition, we may rely on third parties to perform release testing on our product candidates prior to delivery to patients.

these tests are not appropriately conducted and test data are not reliable, patients could be put at risk of serious harm which

could result in product liability suits.

we or any third-party manufacturers we may engage were to encounter any of these difficulties, our ability to provide our product

candidates to patients in clinical trials or to the medical marketplace would be jeopardized.

Any delay or interruption in the

supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining

clinical trial programs and, depending upon the period of delay, could require us to either commence new clinical trials at additional

expense or terminate clinical trials completely.

Each risk could delay our clinical trials, any approval of our product candidates

by the FDA, or the commercialization of our product candidates, and could result in higher costs or deprive us of potential product

If these tests

are not appropriately conducted and test data are not reliable, patients could be put at risk of serious harm which could result in product

liability suits.

we or any third-party manufacturers we may engage were to encounter any of these difficulties, our ability to provide our product candidates

to patients in clinical trials or to the medical marketplace would be jeopardized.

Any delay or interruption in the supply of clinical

trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs

and, depending upon the period of delay, could require us to either commence new clinical trials at additional expense or terminate clinical

trials completely.

Each risk could delay our clinical trials, any approval of our product candidates by the FDA, or the commercialization

of our product candidates, and could result in higher costs or deprive us of potential product revenue.

cell-based products that receive regulatory approval may be difficult and expensive to manufacture profitably.

products are among the more expensive biologic products to manufacture in accordance with cGMP.

We do not yet have sufficient

information to reliably estimate the cost of commercially manufacturing any of our product candidates.

Excessive manufacturing

costs could make our product candidates too expensive to compete in the medical market place with alternative products manufactured

by our competitors or might result in third party payors such as health insurers and Medicare, declining to cover our products

or setting reimbursement levels too low for us to earn a profit from the commercialization of one or more of our products.

We do not yet have sufficient information

to reliably estimate the cost of commercially manufacturing any of our product candidates.

Excessive manufacturing costs could make our

product candidates too expensive to compete in the medical market place with alternative products manufactured by our competitors or

might result in third party payors such as health insurers and Medicare, declining to cover our products or setting reimbursement levels

too low for us to earn a profit from the commercialization of one or more of our products.

may not secure a commercialization partner for Renevia.

September 2019, Renevia was granted a CE Mark and Class III classification with an intended use in adults as a resorbable matrix

for the delivery of autologous adipose tissue preparations to restore and/or augment facial volume after subcutaneous fat volume

loss for the treatment of facial lipoatrophy.

We continue to seek a commercialization partner in the EU but we can give no assurance

September 2019, Renevia was granted a CE Mark and Class III classification with an intended use in adults as a resorbable matrix for

the delivery of autologous adipose tissue preparations to restore and/or augment facial volume after subcutaneous fat volume loss for

the treatment of facial lipoatrophy.

We continue to seek a commercialization partner in the European Union but we can give no assurance

that we will secure a partner or commercialize Renevia in any territory.

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December 2019, a novel strain of coronavirus and the resulting illness known as COVID-19 emerged in Wuhan, China.

has now spread to other countries and has been declared a pandemic by the World Health Organization.

The outbreak has now

spread to other countries and has been declared a pandemic by the World Health Organization.

COVID-19 pandemic has resulted in travel and other restrictions in order to reduce the spread of the disease, including a California

executive order and several other state and local orders across the country, which, among other things, direct individuals to

shelter at their places of residence, direct businesses and governmental agencies to cease non-essential operations at physical

locations, prohibit certain non-essential gatherings, and order cessation of non-essential travel.

In response to these public

health directives and orders, we have implemented work-from-home policies for our employees.

The effects of the executive order,

the shelter-in-place order and our work-from-home policies may negatively impact productivity, disrupt our business and delay

our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions

and other limitations on our ability to conduct our business in the ordinary course.

These and similar, and perhaps more severe,

disruptions in our operations could negatively impact our business, operating results and financial condition.

COVID-19 continues to impact the United States and Israel, we have experienced and may continue to experience disruptions that

could adversely affect our operations and clinical trials, including:

or difficulties in enrolling, or conducting follow-up visits with, patients in our clinical trials, particularly patients

for our OpRegen Phase 1/2a clinical trial, who are older and who may be at higher risk of complications from COVID-19;

executive order and several other state and local orders across the country, which, among other things, direct individuals to shelter

at their places of residence, direct businesses and governmental agencies to cease non-essential operations at physical locations, prohibit

certain non-essential gatherings, and order cessation of non-essential travel.

In response to these public health directives and orders,

we have implemented work-from-home policies for our employees.

The effects of the executive order, the shelter-in-place order and our

work-from-home policies may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude

of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business

in the ordinary course.

These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business,

operating results and financial condition.

COVID-19 continues to impact the United States and Israel, we have experienced and may continue to experience disruptions that could

adversely affect our operations and clinical trials, including:

or difficulties in enrolling, or conducting follow-up visits with, patients in our clinical trials, particularly patients for our

OpRegen Phase 1/2a clinical trial, who are older and who may be at higher risk of complications from COVID-19;

or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and staff;

4 unchanged sentences

difficulties for us and our suppliers of raw materials caused by business closures;

in clinical sites receiving the supplies and materials needed to conduct our clinical trials, including interruption in global

shipping that may affect the transport of clinical trial materials;

in clinical sites receiving the supplies and materials needed to conduct our clinical trials, including interruption in global shipping

that may affect the transport of clinical trial materials;

in local regulations as part of a response to the COVID-19 outbreak which may require us to change the ways in which our clinical

1 unchanged sentence

or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines;

that participants enrolled in our clinical trials will acquire COVID-19 while the clinical trial is ongoing, which could impact

the results of the clinical trial, including by increasing the number of observed adverse events;

that participants enrolled in our clinical trials will acquire COVID-19 while the clinical trial is ongoing, which could impact the

results of the clinical trial, including by increasing the number of observed adverse events;

of the FDA to accept data from clinical trials in affected geographies.

and other disruptions in our operations and the global economy could negatively impact our business, operating results and financial

The extent to which the COVID-19 pandemic affects our operations will depend on future developments, which are highly

uncertain and cannot be predicted with confidence, including the duration and severity of the pandemic, and the actions that may

be required to contain the COVID-19 pandemic or treat its impact.

clinical trials have been, and may in the future be, affected by the COVID-19 pandemic.

For example, the COVID-19 pandemic has

impacted patient enrollment in our OpRegen Phase 1/2a multicenter clinical trial and the VAC2 Phase 1 multicenter clinical trial.

In particular, some sites have paused enrollment to focus on, and direct resources to, the COVID-19 pandemic, while at other sites,

patients are choosing not to enroll or continue participating in the clinical trial as a result of the pandemic.

We are unable

to predict with confidence the duration of such patient enrollment delays and difficulties.

If patient enrollment is delayed for

an extended period of time, such clinical trials could be delayed or otherwise adversely affected.

Our inability to enroll a sufficient

number of patients for any of our current or future clinical trials could result in significant delays or may require us to abandon

one or more clinical trials altogether.

As a result, we may experience new or additional delays and difficulties in enrollment,

which would result in the delay of completion of such trials beyond our expected timelines.

ongoing or planned clinical trials may also be impacted by interruptions or delays in the operations of the FDA and comparable

foreign regulatory agencies.

addition, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other

restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact

personnel at our CROs or third-party manufacturing facilities upon which we rely, or the availability or cost of materials, which

could disrupt the supply chain for our product candidates.

To the extent our suppliers and service providers are unable to comply

with their obligations under our agreements with them or they are otherwise unable to deliver or are delayed in delivering goods

and services to us due to the COVID-19 pandemic, our ability to continue meeting clinical supply demand for our product candidates

or otherwise advancing development of our product candidates may become impaired.

The extent to which the COVID-19 pandemic affects our operations will depend on future developments, which are highly uncertain

and cannot be predicted with confidence, including the duration and severity of the pandemic, and the actions that may be required to

contain the COVID-19 pandemic or treat its impact.

Our clinical trials have

been, and may in the future be, affected by the COVID-19 pandemic.

For example, the COVID-19 pandemic previously impacted patient enrollment

in our OpRegen Phase 1/2a multicenter clinical trial and is currently affecting the VAC2 Phase 1 multicenter clinical trial.

In particular,

some sites paused enrollment to focus on, and direct resources to, the COVID-19 pandemic or adhere to national or local guidelines, while

at other sites, patients may decide not to enroll or continue participating in follow-up visits as part of the ongoing clinical trial,

as a result of the pandemic.

We are unable to predict with confidence the duration of such patient enrollment delays or missed study

visits, as the COVID-19 pandemic continues or gets worse.

If patient enrollment or study follow-up is delayed for an extended period

of time, our clinical trials could be delayed or otherwise adversely affected.

Our inability to enroll or follow a sufficient number

of patients for any of our current or future clinical trials could result in significant delays or may require us to abandon one or more

clinical trials altogether.

ongoing or planned clinical trials may also be impacted by interruptions or delays in the operations of the FDA and comparable foreign

regulatory agencies.

addition, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other restrictions

on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact personnel at our CROs

or third-party manufacturing facilities upon which we rely, or the availability or cost of materials, which could disrupt the supply

chain for our product candidates.

To the extent our suppliers and service providers are unable to comply with their obligations under

our agreements with them or they are otherwise unable to deliver or are delayed in delivering goods and services to us due to the COVID-19

pandemic, our ability to continue meeting clinical supply demand for our product candidates or otherwise advancing development of our

product candidates may become impaired.

spread of COVID-19 and actions taken to reduce its spread may also materially affect us economically.

While the potential economic

impact brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, there could be a significant

disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our

liquidity and financial position.

In addition, the trading prices for other biotechnology companies have been volatile as a result

of the COVID-19 pandemic.

As a result, we may face difficulties raising capital through sales of our common shares or such sales

may be on unfavorable terms.

While the potential economic impact

brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, there could be a significant disruption

of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and financial

In addition, the trading prices for other biotechnology companies have been volatile as a result of the COVID-19 pandemic.

As a result, we may face difficulties raising capital through sales of our common shares or such sales may be on unfavorable terms.

and actions taken to reduce its spread continue to rapidly evolve.

The extent to which COVID-19 may impede the development of

our product candidates, reduce the productivity of our employees, disrupt our supply chains, delay our clinical trials, reduce

our access to capital or limit our business development activities, will depend on future developments, which are highly uncertain

and cannot be predicted with confidence.

addition, to the extent the ongoing COVID-19 pandemic adversely affects our business and results of operations, it may also have

the effect of heightening many of the other risks and uncertainties described in this ‘‘Risk Factors’’

withdrawal of the United Kingdom (the “U.K.”) from the EU, commonly referred to as “Brexit,” may adversely

impact our ability to obtain regulatory approvals of our product candidates in the EU and the U.K., result in restrictions or

imposition of taxes and duties for importing our product candidates into the EU and the U.K., and may require us to incur additional

expenses in order to develop, manufacture and commercialize our product candidates in the EU and the U.K.*

The extent to which COVID-19 may impede the development of our product

candidates, reduce the productivity of our employees, disrupt our supply chains, delay our clinical trials, reduce our access to capital

or limit our business development activities, will depend on future developments, which are highly uncertain and cannot be predicted

with confidence.

addition, to the extent the ongoing COVID-19 pandemic adversely affects our business and results of operations, it may also have the

effect of heightening many of the other risks and uncertainties described in this ‘‘Risk Factors’’ section.

withdrawal of the United Kingdom (the “U.K.”) from the EU, commonly referred to as “Brexit,” may adversely impact

our ability to obtain regulatory approvals of our product candidates in the EU and the U.K., result in restrictions or imposition of

taxes and duties for importing our product candidates into the EU and the U.K., and may require us to incur additional expenses in order

to develop, manufacture and commercialize our product candidates in the EU and the U.K.*

the result of a referendum in 2016, the U.K.

left the EU on January 31, 2020, commonly referred to as Brexit.

Pursuant to the

formal withdrawal arrangements agreed between the U.K.

Pursuant to the formal

withdrawal arrangements agreed between the U.K.

and the EU, the U.K.

was subject to a transition period until December

31, 2020 (the “Transition Period”) during which EU rules continued to apply.

A trade and cooperation agreement (the

“Trade and Cooperation Agreement”) that outlines the future trading relationship between the United Kingdom and the

European Union was agreed in December 2020.

was subject to a transition period until December 31, 2020 (the

“Transition Period”) during which EU rules continued to apply.

A trade and cooperation agreement (the “Trade and Cooperation

Agreement”) that outlines the future trading relationship between the United Kingdom and the European Union was agreed in December

a significant proportion of the regulatory framework in the U.K.

applicable to our business and our product candidates is derived

from EU directives and regulations, Brexit has had, and may continue to have, a material impact upon the regulatory regime with

respect to the development, manufacture, importation, approval and commercialization of our product candidates in the U.K.

For example, Great Britain is no longer covered by the centralized procedures for obtaining EU-wide marketing authorization

from the European Medicines Agency and a separate process for authorization of drug products, including our product candidates,

will be required in Great Britain.

It is currently unclear whether the Medicines & Healthcare

products Regulatory Agency in the U.K.

is sufficiently prepared to handle the increased volume of marketing authorization applications

that it is likely to receive.

Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of

Brexit or otherwise, would prevent us from commercializing our product candidates in the U.K.

or the EU and restrict our ability

to generate revenue and achieve and sustain profitability.

applicable to our business and our product candidates is derived from

EU directives and regulations, Brexit has had, and may continue to have, a material impact upon the regulatory regime with respect to

the development, manufacture, importation, approval and commercialization of our product candidates in the U.K.

Great Britain is no longer covered by the centralized procedures for obtaining EU-wide marketing authorization from the European Medicines

Agency and a separate process for authorization of drug products, including our product candidates, will be required in Great Britain.

It is currently unclear whether the Medicines & Healthcare products Regulatory Agency in the

is sufficiently prepared to handle the increased volume of marketing authorization applications that it is likely to receive.

delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, would prevent us from commercializing

our product candidates in the U.K.

or the EU and restrict our ability to generate revenue and achieve and sustain profitability.

the Trade and Cooperation Agreement provides for the tariff-free trade of medicinal products between the U.K.

and the EU, there

may be additional non-tariff costs to such trade which did not exist prior to the end of the Transition Period.

Further, should

diverge from the EU from a regulatory perspective in relation to medicinal products, tariffs could be put into place

in the future.

We could therefore, both now and in the future, face significant additional expenses (when compared to the position

prior to the end of the Transition Period) to operate our business, which could significantly and materially harm or delay our

ability to generate revenues or achieve profitability of our business.

Any further changes in international trade, tariff and

import/export regulations as a result of Brexit or otherwise may impose unexpected duty costs or other non-tariff barriers on

These developments, or the perception that any of them could occur, may significantly reduce global trade and, in particular,

trade between the affected nations and the U.K.

and the EU, there may be

additional non-tariff costs to such trade which did not exist prior to the end of the Transition Period.

Further, should the U.K.

from the EU from a regulatory perspective in relation to medicinal products, tariffs could be put into place in the future.

therefore, both now and in the future, face significant additional expenses (when compared to the position prior to the end of the Transition

Period) to operate our business, which could significantly and materially harm or delay our ability to generate revenues or achieve profitability

of our business.

Any further changes in international trade, tariff and import/export regulations as a result of Brexit or otherwise

may impose unexpected duty costs or other non-tariff barriers on us.

These developments, or the perception that any of them could occur,

may significantly reduce global trade and, in particular, trade between the affected nations and the U.K.

face potential product liability, and, if successful claims are brought against us, we may incur substantial liability and costs.

If the use or misuse of our products or product candidates harm patients or is perceived to harm patients even when such harm

is unrelated to our products or product candidates, our regulatory approvals could be revoked, suspended or otherwise negatively

affected, and we could be subject to costly and damaging product liability claims.

face the risk of incurring liabilities to clinical trial patients if they are injured as a result of their participation in our

clinical trials.

In the event we commercialize Renevia in the EU or in other countries that recognize the CE Mark, we will also

face product liability risks associated with the use of Renevia by consumers.

If any claims are made and if liability can be established,

the amount of any liability we or our affiliates may incur, could exceed any insurance coverage in effect, and the amount of the

liability could be material to our financial condition.

use or misuse of our product candidates in clinical trials and the sale of any products for which we obtain marketing approval,

including Renevia, exposes us to the risk of product liability claims.

Product liability claims might be brought against us by

consumers, healthcare providers, pharmaceutical companies or others selling or otherwise coming into contact with our products.

There is a risk that our product candidates may induce adverse events.

If we cannot successfully defend against product liability

claims, we could incur substantial liability and costs.

In addition, regardless of merit or eventual outcome, product liability

claims may result in:

the use or misuse of our products or product candidates harm patients or is perceived to harm patients even when such harm is unrelated

to our products or product candidates, our regulatory approvals could be revoked, suspended or otherwise negatively affected, and we

could be subject to costly and damaging product liability claims.

face the risk of incurring liabilities to clinical trial patients if they are injured as a result of their participation in our clinical

In the event we commercialize Renevia in the EU or in other countries that recognize the CE Mark, we will also face product liability

risks associated with the use of Renevia by consumers.

If any claims are made and if liability can be established, the amount of any

liability we or our affiliates may incur, could exceed any insurance coverage in effect, and the amount of the liability could be material

to our financial condition.

use or misuse of our product candidates in clinical trials and the sale of any products for which we obtain marketing approval, including

Renevia, exposes us to the risk of product liability claims.

Product liability claims might be brought against us by consumers, healthcare

providers, pharmaceutical companies or others selling or otherwise coming into contact with our products.

There is a risk that our product

candidates may induce adverse events.

If we cannot successfully defend against product liability claims, we could incur substantial liability

In addition, regardless of merit or eventual outcome, product liability claims may result in:

of our business reputation;

8 unchanged sentences

believe our current product liability insurance coverage is appropriate in light of our clinical programs;

however, we may not

be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability.

If and when we obtain marketing approval for product candidates, we intend to increase our insurance coverage to include the sale

of commercial products;

however, we may be unable to obtain product liability insurance on commercially reasonable terms or in

adequate amounts.

Significant damages have been awarded in class action lawsuits based on drugs or medical treatments that had

unanticipated adverse effects.

A successful product liability claim or series of claims brought against us could cause our stock

price to decline and, if the amount of damages exceeds our insurance coverage, could adversely affect our results of operations

and business.

Cure has received Israeli government grants for certain of its research and development activities.

The terms of these grants

may require Cell Cure to seek approvals and to satisfy specified conditions to manufacture products and transfer or license grant-supported

technologies outside of Israel.

In the context of such approvals, Cell Cure will be required to pay penalties in addition to the

repayment of the grants.

Such grants are applied for on a yearly basis and may not be available or only partially granted in the

future, which would increase our costs.*

however, we may not be able

to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability.

we obtain marketing approval for product candidates, we intend to increase our insurance coverage to include the sale of commercial products;

however, we may be unable to obtain product liability insurance on commercially reasonable terms or in adequate amounts.

damages have been awarded in class action lawsuits based on drugs or medical treatments that had unanticipated adverse effects.

product liability claim or series of claims brought against us could cause our stock price to decline and, if the amount of damages exceeds

our insurance coverage, could adversely affect our results of operations and business.

Cure has received Israeli government grants for certain of its research and development activities.

The terms of these grants

require prior approval and the satisfaction of specified conditions to manufacture products and transfer or license technologies

The terms of these grants may require

Cell Cure to seek approvals and to satisfy specified conditions to manufacture products and transfer or license grant-supported technologies

outside of Israel.

the Encouragement of Research, Development and Technological Innovation in the Industry Law 5744-1984 (formerly known as the Law

for the Encouragement of Research and Development in Industry 5744-1984), and the regulations, guidelines, rules, procedures and

benefit tracks thereunder (collectively, the “Innovation Law”), annual research and development programs that meet

specified criteria and are approved by a committee of the Israel Innovation Authority (“IIA”) are eligible for grants.

The grants awarded are typically up to 50% of the project’s expenditures, as determined by the IIA committee and subject

to the benefit track under which the grant was awarded.

A company that receives a grant from the IIA (a “Grant Recipient”),

is typically required to pay royalties to the IIA on income generated from products incorporating know-how developed using such

grants (including income derived from services associated with such products) or on all revenues of the Grant Recipient (depending

upon the terms of the approval letters issued by the IIA), until 100% of the U.S.

dollar-linked grant plus annual LIBOR interest

In general, the rate of such royalties varies between 3% to 5%.

obligation to pay royalties is contingent on actual revenues being generated from such products and services or actual revenues

being generated by the Grant Recipient in general (as the case may be).

In the absence of such revenues, no payment of royalties

It should be noted that the restrictions under the Innovation Law will continue to apply even after the repayment

of such royalties in full by the Grant Recipient including restrictions on the sale, transfer or licensing to a foreign entity

of know-how developed as part of the programs under which the grants were given.

terms of the grants under the Innovation Law also (generally) require that the products developed as part of the programs under

which the grants were given be manufactured in Israel and that the know-how developed thereunder may not be transferred outside

of Israel, unless prior written approval is received from the IIA (such approval is not required for the transfer of a portion

of the manufacturing capacity which does not exceed, in the aggregate, 10% of the portion declared to be manufactured outside

of Israel in the applications for funding (in which case only notification is required), and additional payments are required

to be made to IIA).

It should be noted that this does not restrict the export of products that incorporate the funded know-how.

In the context of such approvals, Cell Cure will be required to pay penalties in addition to the repayment of the

Such grants are applied for on a yearly basis and may not be available or only partially granted in the future, which would increase

Cure has received Israeli government grants for certain of its research and development activities.

The terms of these grants require

prior approval and the satisfaction of specified conditions to manufacture products and transfer or license technologies outside of Israel.

the Encouragement of Research, Development and Technological Innovation in the Industry Law 5744-1984 (formerly known as the Law for

the Encouragement of Research and Development in Industry 5744-1984), and the regulations, guidelines, rules, procedures and benefit

tracks thereunder (collectively, the “Innovation Law”), annual research and development programs that meet specified criteria

and are approved by a committee of the Israel Innovation Authority (“IIA”) are eligible for grants.

The grants awarded are

typically up to 50% of the project’s expenditures, as determined by the IIA committee and subject to the benefit track under which

the grant was awarded.

A company that receives a grant from the IIA (a “Grant Recipient”), is typically required to pay royalties

to the IIA on income generated from products incorporating know-how developed using such grants (including income derived from services

associated with such products) or on all revenues of the Grant Recipient (depending upon the terms of the approval letters issued by

the IIA), until 100% of the U.S.

dollar-linked grant plus annual LIBOR interest is repaid.

In general, the rate of such royalties varies

between 3% to 5%.

obligation to pay royalties is contingent on actual revenues being generated from such products and services or actual revenues being

generated by the Grant Recipient in general (as the case may be).

In the absence of such revenues, no payment of royalties is required.

It should be noted that the restrictions under the Innovation Law will continue to apply even after the repayment of such royalties in

full by the Grant Recipient including restrictions on the sale, transfer or licensing to a foreign entity of know-how developed as part

of the programs under which the grants were given.

terms of the grants under the Innovation Law also (generally) require that the products developed as part of the programs under which

the grants were given be manufactured in Israel and that the know-how developed thereunder may not be transferred outside of Israel,

unless prior written approval is received from the IIA (such approval is not required for the transfer of a portion of the manufacturing

capacity which does not exceed, in the aggregate, 10% of the portion declared to be manufactured outside of Israel in the applications

for funding (in which case only notification is required), and additional payments are required to be made to IIA).

It should be noted

that this does not restrict the export of products that incorporate the funded know-how.

Innovation Law restricts the ability to transfer or license know-how funded by IIA outside of Israel.

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A transfer or license for the purpose of the Innovation Law are generally

interpreted very broadly and include, inter alia, any actual sale or assignment of the IIA-funded know-how, any license to further

develop or otherwise exploit the IIA-funded know-how or the products resulting from such IIA-funded know-how or any other transaction,

which, in essence, constitutes a transfer of the IIA-funded know-how.

Generally, a mere license solely to market or distribute

products resulting from the IIA-funded know-how would not be deemed a transfer or license for the purpose of the Innovation Law.

of Cell Cure’s research and development efforts have been financed, partially, through grants that it has received from

the IIA and when we acquired our holdings in Cell Cure, we undertook in writing, vis-à-vis the IIA, to abide by, and to

ensure the abidance of Cell Cure to, the Innovation Law.

We therefore must comply with the requirements of the Innovation Law

and related regulations.

As of December 31, 2020, we received approximately $15.4 million of such grants.

restrictions under the Innovation Law may impair our ability to enter into agreements which involve IIA-funded products or know-how

without the approval of IIA.

We cannot be certain that any approval of IIA will be obtained on terms that are acceptable to us,

We may not receive the required approvals should we wish to transfer or license IIA-funded know-how, manufacturing

and/or development outside of Israel in the future.

Furthermore, in the event that we undertake a transaction involving the transfer

to a non-Israeli entity of know-how developed with IIA-funding pursuant to a merger or similar transaction, the consideration

available to our shareholders may be reduced by the amounts we are required to pay to the IIA.

Any approval, if given, will generally

be subject to additional financial obligations.

Failure to comply with the requirements under the Innovation Law may subject Cell

Cure to mandatory repayment of grants received by it (together with interest and penalties), as well as expose its directors and

management to criminal proceedings.

In addition, the IIA may from time to time conduct royalty audits.

Further grants may not

be approved or reduced in the future, which would increase our costs.

IIA approval is not required for the marketing or distribution

of products resulting from the IIA-funded research or development in the ordinary course of business.

international business exposes us to business, regulatory, political, operational, financial and economic risks associated with

doing business outside of the United States.

interpreted very broadly and include, inter alia, any actual sale or assignment of the IIA-funded know-how, any license to further develop

or otherwise exploit the IIA-funded know-how or the products resulting from such IIA-funded know-how or any other transaction, which,

in essence, constitutes a transfer of the IIA-funded know-how.

Generally, a mere license solely to market or distribute products resulting

from the IIA-funded know-how would not be deemed a transfer or license for the purpose of the Innovation Law.

of Cell Cure’s research and development efforts have been financed, partially, through grants that it has received from the IIA

and when we acquired our holdings in Cell Cure, we undertook in writing, vis-à-vis the IIA, to abide by, and to ensure the abidance

of Cell Cure to, the Innovation Law.

We therefore must comply with the requirements of the Innovation Law and related regulations.

of December 31, 2020, we received approximately $15.4 million of such grants.

restrictions under the Innovation Law may impair our ability to enter into agreements which involve IIA-funded products or know-how without

the approval of IIA.

We cannot be certain that any approval of IIA will be obtained on terms that are acceptable to us, or at all.

may not receive the required approvals should we wish to transfer or license IIA-funded know-how, manufacturing and/or development outside

of Israel in the future.

Furthermore, in the event that we undertake a transaction involving the transfer to a non-Israeli entity of

know-how developed with IIA-funding pursuant to a merger or similar transaction, the consideration available to our shareholders may

be reduced by the amounts we are required to pay to the IIA.

Any approval, if given, will generally be subject to additional financial

Failure to comply with the requirements under the Innovation Law may subject Cell Cure to mandatory repayment of grants

received by it (together with interest and penalties), as well as expose its directors and management to criminal proceedings.

the IIA may from time to time conduct royalty audits.

Further grants may not be approved or reduced in the future, which would increase

IIA approval is not required for the marketing or distribution of products resulting from the IIA-funded research or development

in the ordinary course of business.

international business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing

business outside of the United States.

Cure is our 99% owned subsidiary located in Jerusalem, Israel.

OpRegen is currently manufactured at Cell Cure and we anticipate

transitioning some or all of the manufacturing of OPC1 and VAC2 to Cell Cure as well.

A portion of our OpRegen Phase 1/2a clinical

trial has been conducted at sites in Israel.

OpRegen is currently manufactured at Cell Cure and we anticipate transitioning

some or all of the manufacturing of OPC1 and VAC2 to Cell Cure as well.

A portion of our OpRegen Phase 1/2a clinical trial has been conducted

at sites in Israel.

Conducting operations internationally involves a number of risks, including:

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risks, such as longer payment cycles and exposure to foreign currency exchange rate fluctuations;

and economic instability, including wars, terrorism, and political unrest, outbreak of disease, boycotts, curtailment of trade

and other business restrictions;

conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, data and

privacy laws, regulatory requirements and other governmental approvals, permits and licenses;

and economic instability, including wars, terrorism, and political unrest, outbreak of disease, boycotts, curtailment of trade and

other business restrictions;

conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, data and privacy

laws, regulatory requirements and other governmental approvals, permits and licenses;

and compliance risks that may fall within the purview of the U.S.

Foreign Corrupt Practices Act, UK Bribery Act, anti-boycott

laws and other anti-corruption laws.

Foreign Corrupt Practices Act, UK Bribery Act, anti-boycott laws

and other anti-corruption laws.

of these factors could significantly harm our international operations and, consequently, our results of operations.

any failure to comply with applicable legal and regulatory obligations could impact us in a variety of ways that include, but

are not limited to, significant criminal, civil and administrative penalties, including imprisonment of individuals, fines and

penalties, denial of export privileges, seizure of shipments, and restrictions on certain business activities.

Also, the failure

to comply with applicable legal and regulatory obligations could result in the disruption of our clinical trial activities.

international operations could be affected by changes in laws, trade regulations, labor and employment regulations, and procedures

and actions affecting approval, production, pricing, reimbursement and marketing of tests, as well as by inter-governmental disputes.

Any of these changes could adversely affect our business.

success internationally will depend, in part, on our ability to develop and implement policies and strategies that are effective

in anticipating and managing these and other risks in Israel.

Failure to manage these and other risks may have a material adverse

effect on our operations in Israel and on our business as a whole.

In addition, any

failure to comply with applicable legal and regulatory obligations could impact us in a variety of ways that include, but are not limited

to, significant criminal, civil and administrative penalties, including imprisonment of individuals, fines and penalties, denial of export

privileges, seizure of shipments, and restrictions on certain business activities.

Also, the failure to comply with applicable legal

and regulatory obligations could result in the disruption of our clinical trial activities.

international operations could be affected by changes in laws, trade regulations, labor and employment regulations, and procedures and

actions affecting approval, production, pricing, reimbursement and marketing of tests, as well as by inter-governmental disputes.

of these changes could adversely affect our business.

success internationally will depend, in part, on our ability to develop and implement policies and strategies that are effective in anticipating

and managing these and other risks in Israel.

Failure to manage these and other risks may have a material adverse effect on our operations

in Israel and on our business as a whole.

Related to our Intellectual Property

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as appropriate.

In addition to patenting our own technology and that of our subsidiaries, we have licensed patents and patent

applications for certain stem cell technology, hEPC, and hES cell lines, hydrogel technology and other technology from other companies.

patent positions of pharmaceutical and biotechnology companies, including ours, are generally uncertain and involve complex legal

and factual questions.

In addition to patenting our own technology and that of our subsidiaries, we have licensed patents and patent applications

for certain stem cell technology, hEPC, and hES cell lines, hydrogel technology and other technology from other companies.

patent positions of pharmaceutical and biotechnology companies, including ours, are generally uncertain and involve complex legal and

factual questions.

Our business could be negatively affected by any of the following:

claims of any patents that are issued may not provide meaningful protection, may not provide a basis for commercially viable

products or may not provide us with any competitive advantages;

claims of any patents that are issued may not provide meaningful protection, may not provide a basis for commercially viable products

or may not provide us with any competitive advantages;

patents may be challenged by third parties;

may have patents that relate to our technology or business that may prevent us from marketing our product candidates unless

we are able to obtain a license to those patents;

may have patents that relate to our technology or business that may prevent us from marketing our product candidates unless we are

able to obtain a license to those patents;

pending patent applications to which we have rights may not result in issued patents;

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may not be successful in developing additional proprietary technologies that are patentable.

addition, others may independently develop similar or alternative technologies, duplicate any of our technologies and, if patents

are licensed or issued to us, design around the patented technologies licensed to or developed by us.

As an example, Astellas’

patent portfolio with respect to the manufacture of its RPE products could adversely impact our rights to manufacture OpRegen.

Moreover, we could incur substantial costs in litigation if we have to defend ourselves in patent lawsuits brought by third parties

or if we initiate such lawsuits.

we are unable to obtain and enforce patents and to protect our trade secrets, others could use our technology to compete with

us, which could limit opportunities for us to generate revenues by licensing our technology and selling products.

success will depend in part on our ability to obtain and enforce patents and maintain trade secrets in the United States and in

other countries.

If we are unsuccessful at obtaining and enforcing patents, our competitors could use our technology and create

products that compete with our products, without paying license fees or royalties to us.

The preparation, filing, and prosecution

of patent applications can be costly and time consuming.

Our limited financial resources may not permit us to pursue patent protection

of all of our technology and products in all key markets.

Even if we are able to obtain issued patents covering our technology

or products, we may have to incur substantial legal fees and other expenses to enforce our patent rights to protect our technology

and products from infringing uses.

We may not have the financial resources to finance the litigation required to preserve our

patent and trade secret rights.

Litigation, interferences, oppositions, inter partes reviews or other proceedings are, have been

and may in the future be necessary in some instances to determine the validity and scope of certain of our proprietary rights,

and in other instances to determine the validity, scope or non-infringement of certain patent rights claimed by third parties

to be pertinent to the manufacture, use or sale of our products.

This means that patents owned or licensed by us may be lost if

the outcome of a proceeding is unfavorable to us.

addition, others may independently develop similar or alternative technologies, duplicate any of our technologies and, if patents are

licensed or issued to us, design around the patented technologies licensed to or developed by us.

As an example, Astellas’ patent

portfolio with respect to the manufacture of its RPE products could adversely impact our rights to manufacture OpRegen.

could incur substantial costs in litigation if we have to defend ourselves in patent lawsuits brought by third parties or if we initiate

such lawsuits.

we are unable to obtain and enforce patents and to protect our trade secrets, others could use our technology to compete with us, which

could limit opportunities for us to generate revenues by licensing our technology and selling products.

success will depend in part on our ability to obtain and enforce patents and maintain trade secrets in the United States and in other

If we are unsuccessful at obtaining and enforcing patents, our competitors could use our technology and create products that

compete with our products, without paying license fees or royalties to us.

The preparation, filing, and prosecution of patent applications

can be costly and time consuming.

Our limited financial resources may not permit us to pursue patent protection of all of our technology

and products in all key markets.

Even if we are able to obtain issued patents covering our technology or products, we may have to incur

substantial legal fees and other expenses to enforce our patent rights to protect our technology and products from infringing uses.

may not have the financial resources to finance the litigation required to preserve our patent and trade secret rights.

Litigation, interferences,

oppositions, inter partes reviews or other proceedings are, have been and may in the future be necessary in some instances to determine

the validity and scope of certain of our proprietary rights, and in other instances to determine the validity, scope or non-infringement

of certain patent rights claimed by third parties to be pertinent to the manufacture, use or sale of our products.

This means that patents

owned or licensed by us may be lost if the outcome of a proceeding is unfavorable to us.

is no certainty that our pending or future patent applications will result in the issuance of patents.

success depends in part on our ability to obtain and defend patent and other intellectual property rights that are important to

the commercialization of our products and product candidates.

The degree of patent protection that will be afforded to our products

and processes in the U.S.

and in other important markets remains uncertain and is dependent upon the scope of protection decided

upon by the patent offices, courts, administrative bodies and lawmakers in these countries.

We can provide no assurance that we

will successfully obtain or preserve patent protection for the technologies incorporated into our products and processes, or that

the protection obtained will be of sufficient breadth and degree to protect our commercial interests in all countries where we

conduct business.

If we cannot prevent others from exploiting our inventions, we will not derive the benefit from them that we

currently expect.

Furthermore, we can provide no assurance that our products will not infringe patents or other intellectual property

rights held by third parties.

success depends in part on our ability to obtain and defend patent and other intellectual property rights that are important to the commercialization

of our products and product candidates.

The degree of patent protection that will be afforded to our products and processes in the U.S.

and in other important markets remains uncertain and is dependent upon the scope of protection decided upon by the patent offices, courts,

administrative bodies and lawmakers in these countries.

We can provide no assurance that we will successfully obtain or preserve patent

protection for the technologies incorporated into our products and processes, or that the protection obtained will be of sufficient breadth

and degree to protect our commercial interests in all countries where we conduct business.

If we cannot prevent others from exploiting

our inventions, we will not derive the benefit from them that we currently expect.

Furthermore, we can provide no assurance that our

products will not infringe patents or other intellectual property rights held by third parties.

Europe, there is uncertainty about the eligibility of hES cell subject matter for patent protection.

The European Patent Convention

prohibits the granting of European patents for inventions that concern “uses of human embryos for industrial or commercial

purposes.” A recent decision at the Court of Justice of the European Union interpreted parthenogenetically produced hES

cells as patentable subject matter.

Consequently, the European Patent Office now recognizes that human pluripotent stem cells

(including human ES cells) can be created without a destructive use of human embryos as of June 5, 2003, and patent applications

relating to hES cell subject matter with a filing and priority date after this date are no longer automatically excluded from

patentability under Article 53 (a) EPC and Rule 28(c) EPC.

The European Patent Convention prohibits

the granting of European patents for inventions that concern “uses of human embryos for industrial or commercial purposes.”

A recent decision at the Court of Justice of the European Union interpreted parthenogenetically produced hES cells as patentable subject

Consequently, the European Patent Office now recognizes that human pluripotent stem cells (including human ES cells) can be created

without a destructive use of human embryos as of June 5, 2003, and patent applications relating to hES cell subject matter with a filing

and priority date after this date are no longer automatically excluded from patentability under Article 53 (a) EPC and Rule 28(c) EPC.

Patent Cooperation Treaty patent application related to OpRegen was filed on May 25, 2021, directed to the restoration of the anatomy

or functionality of a retina with OpRegen.

As with all patent applications, there is no certainty that this or any of our other pending

or future patent applications will result in the issuance of patents.

property we may develop using grants received from governments are subject to rights maintained by those governments.

and development we perform that is funded by grants from government, and any intellectual property that we create using those

grants, is subject to certain rights of the government entities to require that we license or grant rights to the intellectual

property developed using government funding in certain circumstances.

and development we perform that is funded by grants from government, and any intellectual property that we create using those grants,

is subject to certain rights of the government entities to require that we license or grant rights to the intellectual property developed

using government funding in certain circumstances.

is no certainty that we will be able to obtain licenses to intellectual property rights owned by third parties.

are no assurances that any of our intellectual property rights will guarantee protection or market exclusivity for our products

and product candidates.

In such cases, we may need to obtain enabling licenses from third parties to protect our products and

product candidates, try to secure market exclusivity or avoid infringing on the intellectual property rights of third parties.

If we are unable to fully protect our product candidates or achieve market exclusivity for our products and product candidates,

our financial success will be dependent, in part, on our ability to protect and enforce our intellectual property rights, to operate

without infringing upon the proprietary rights of others, or, when necessary, our ability to obtain enabling licenses.

are no assurances that any of our intellectual property rights will guarantee protection or market exclusivity for our products and product

In such cases, we may need to obtain enabling licenses from third parties to protect our products and product candidates,

try to secure market exclusivity or avoid infringing on the intellectual property rights of third parties.

If we are unable to fully

protect our product candidates or achieve market exclusivity for our products and product candidates, our financial success will be dependent,

in part, on our ability to protect and enforce our intellectual property rights, to operate without infringing upon the proprietary rights

of others, or, when necessary, our ability to obtain enabling licenses.

we fail to meet our obligations under license agreements, we may lose our rights to key technologies on which our business depends.

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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.

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.

Related to our Dependence on Third Parties

may become dependent on possible future collaborations to develop and commercialize many of our product candidates and to provide

the regulatory compliance, sales, marketing and distribution capabilities required for the success of our business.

may become dependent on possible future collaborations to develop and commercialize many of our product candidates and to provide the

regulatory compliance, sales, marketing and distribution capabilities required for the success of our business.

may enter into various kinds of collaborative research and development and product marketing agreements to develop and commercialize

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is a risk we could become dependent upon one or more collaborative arrangements.

A collaborative arrangement upon which we might

depend might be terminated by our collaboration partner or a partner might determine not to actively pursue the development or

commercialization of our products.

A collaboration partner also may not be precluded from independently pursuing competing products

and drug delivery approaches or technologies.

is a risk that a collaboration partner might fail to perform its obligations under the collaborative arrangements or may be slow

in performing its obligations.

In addition, a collaboration partner may experience financial difficulties at any time that could

prevent it from having available funds to contribute to the collaboration.

If a collaboration partner fails to conduct its product

development, commercialization, regulatory compliance, sales and marketing or distribution activities successfully and in a timely

manner, or if it terminates or materially modifies its agreements with us, the development and commercialization of one or more

product candidates could be delayed, curtailed or terminated because we may not have sufficient financial resources or capabilities

to continue such development and commercialization on our own.

A collaborative arrangement upon which we might depend

might be terminated by our collaboration partner or a partner might determine not to actively pursue the development or commercialization

of our products.

A collaboration partner also may not be precluded from independently pursuing competing products and drug delivery approaches

or technologies.

is a risk that a collaboration partner might fail to perform its obligations under the collaborative arrangements or may be slow in performing

its obligations.

In addition, a collaboration partner may experience financial difficulties at any time that could prevent it from having

available funds to contribute to the collaboration.

If a collaboration partner fails to conduct its product development, commercialization,

regulatory compliance, sales and marketing or distribution activities successfully and in a timely manner, or if it terminates or materially

modifies its agreements with us, the development and commercialization of one or more product candidates could be delayed, curtailed

or terminated because we may not have sufficient financial resources or capabilities to continue such development and commercialization

do not have the ability to independently conduct clinical trials required to obtain regulatory approvals for our product candidates.

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clinical investigators and contract laboratories to conduct any clinical trials we may undertake for our product candidates.

may also rely on third parties to assist with preclinical development of our product candidates.

If we outsource clinical trials,

we may not directly control the timing, conduct and expense of our clinical trials.

If we enlist third parties to conduct clinical

trials and they fail to perform their contractual duties or regulatory obligations or fail to meet expected deadlines, if they

need to be replaced or if the quality or accuracy of the data they obtain is compromised due to failing to adhere to our clinical

protocols or regulatory requirements or for other reasons, our preclinical development activities or clinical trials may be extended,

delayed, suspended or terminated, and we may not obtain regulatory approval for or successfully commercialize our product candidates.

addition, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other

restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact

personnel at these third parties, which could disrupt our clinical timelines, which could have a material adverse impact on our

business, prospects, financial condition and results of operations.

have relied on CIRM to fund past clinical trials of OPC1 and we do not know if they will provide additional funding for future

studies of OPC1.

rely on third parties to assist with preclinical development of our product candidates.

If we outsource clinical trials, we may not directly

control the timing, conduct and expense of our clinical trials.

If we enlist third parties to conduct clinical trials and they fail to

perform their contractual duties or regulatory obligations or fail to meet expected deadlines, if they need to be replaced or if the

quality or accuracy of the data they obtain is compromised due to failing to adhere to our clinical protocols or regulatory requirements

or for other reasons, our preclinical development activities or clinical trials may be extended, delayed, suspended or terminated, and

we may not obtain regulatory approval for or successfully commercialize our product candidates.

addition, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other restrictions

on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact personnel at these third

parties, which could disrupt our clinical timelines, which could have a material adverse impact on our business, prospects, financial

condition and results of operations.

have relied on CIRM to fund past clinical trials of OPC1 and we do not know if they will provide additional funding for future studies

received $14.3 million of funding from CIRM to support clinical development of OPC1.

We intend to apply for additional CIRM grants,

if available;

We intend to apply for additional CIRM grants, if

however, we cannot provide any assurance that such grants will be awarded.

If we are unable to obtain another CIRM

grant, we will need to raise funds through other mechanisms to support future clinical studies of OPC1, which may take additional

time and effort.

If capital is not immediately available, this may force us to amend, delay, or discontinue the clinical trial

and development work for OPC1 until funding is secured.

If we are unable to obtain another CIRM grant,

we will need to raise funds through other mechanisms to support future clinical studies of OPC1, which may take additional time and effort.

If capital is not immediately available, this may force us to amend, delay, or discontinue the clinical trial and development work for

OPC1 until funding is secured.

may need to rely on marketing partners or contract sales companies.

we are able to develop our product candidates and obtain necessary regulatory approvals, we may need to rely on marketing, selling

or distributing partners.

If we do not partner for commercial services, we will depend on our ability to build our own marketing,

selling and distribution capabilities, which would require the investment of significant financial and management resources, or

we will need to find collaborative marketing partners, sales representatives or wholesale distributors for the commercial sale

of our products.

we market products through arrangements with third parties, we may pay sales commissions to sales representatives or we may sell

or consign products to distributors at wholesale prices.

As a result, our gross profit from product sales may be lower than it

would be if we sold our products directly to end users at retail prices through our own sales force.

There can be no assurance

we will be able to negotiate distribution or sales agreements with third parties on favorable terms to justify our investment

in our products or achieve sufficient revenues to support our operations.

we are able to develop our product candidates and obtain necessary regulatory approvals, we may need to rely on marketing, selling or

distributing partners.

If we do not partner for commercial services, we will depend on our ability to build our own marketing, selling

and distribution capabilities, which would require the investment of significant financial and management resources, or we will need

to find collaborative marketing partners, sales representatives or wholesale distributors for the commercial sale of our products.

we market products through arrangements with third parties, we may pay sales commissions to sales representatives or we may sell or consign

products to distributors at wholesale prices.

As a result, our gross profit from product sales may be lower than it would be if we sold

our products directly to end users at retail prices through our own sales force.

There can be no assurance we will be able to negotiate

distribution or sales agreements with third parties on favorable terms to justify our investment in our products or achieve sufficient

revenues to support our operations.

Pertaining to Our Common Shares

we are engaged in the development of pharmaceutical and stem cell therapy products, the price of our common shares may rise and

fall rapidly.*

we are engaged in the development of pharmaceutical and stem cell therapy products, the price of our common shares may rise and fall

market price of our common shares, like that of the shares of many biotechnology companies, has been highly volatile.

of our common shares may rise rapidly in response to certain events, such as the commencement of clinical trials of an experimental

new therapy, even though the outcome of those trials and the likelihood of ultimate FDA approval of a therapeutic product remain

Similarly, prices of our common shares may fall rapidly in response to certain events such as unfavorable results of

clinical trials or a delay or failure to obtain FDA approval.

For example, from January 1, 2021 through May 7, 2021 the closing

price of our common shares has ranged between $1.77 and $3.10 per shares.

In addition, the failure of our earnings

to meet analysts’ expectations could result in a significant rapid decline in the market price of our common shares.

The price of our

common shares may rise rapidly in response to certain events, such as the commencement of clinical trials of an experimental new therapy,

even though the outcome of those trials and the likelihood of ultimate FDA approval of a therapeutic product remain uncertain.

prices of our common shares may fall rapidly in response to certain events such as unfavorable results of clinical trials or a delay

or failure to obtain FDA approval.

For example, from January 1, 2021 through August 6, 2021 the closing price of our common shares has

ranged between $1.77 and $3.10 per shares.

In addition, the failure of our earnings to meet analysts’ expectations could result

in a significant rapid decline in the market price of our common shares.

we do not pay cash dividends, our common shares may not be a suitable investment for anyone who needs to earn dividend income.

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will be used to finance the growth of our business and will not be paid out as dividends to holders of our common shares.

means that our common shares may not be a suitable investment for anyone who needs to earn income from their investments.

that our common shares may not be a suitable investment for anyone who needs to earn income from their investments.

continue to have substantial influence over our company, which could limit your ability to influence the outcome of key transactions,

including a change of control.*

directors, executive officers and their affiliates, in the aggregate, owned approximately 25.6% of our outstanding common shares

as of March 31, 2021.

As a result, these shareholders, if acting together, will be able to heavily influence or control matters

requiring approval by our shareholders, including the election of directors and the approval of mergers, acquisitions or other

extraordinary transactions.

They may also have interests that differ from yours and may vote in a way with which you disagree,

and which may be averse to your interests.

This concentration of ownership may have the effect of delaying, preventing or deterring

a change of control of our company, could deter certain public investors from purchasing our common shares and might ultimately

affect the market price of our common shares.

we or our subsidiaries issue additional common shares or preferred shares, investors in our common shares may experience dilution

of their ownership interests.*

and our subsidiaries may issue additional common shares or other securities convertible into or exercisable for common shares

to raise additional capital or to hire or retain employees or consultants, or in connection with future acquisitions of companies

or licenses to technology or rights, or for other business purposes.

The future issuance of additional securities may be dilutive

to our shareholders and may create downward pressure on the trading price of our common shares.

are currently authorized to issue an aggregate of 252,000,000 shares of capital stock consisting of 250,000,000 common shares

and 2,000,000 “blank check” preferred shares, which means we may issue, without stockholder approval, one or more

series of preferred stock having such designation, powers, privileges, preferences, including preferences over our common shares

respecting dividends and distributions, terms of redemption and relative participation, optional, or other rights, if any, of

the shares of each such series of preferred stock and any qualifications, limitations or restrictions thereof, as our board of

directors may determine.

The terms of one or more series of preferred stock could dilute the voting power or reduce the value

of our common shares.

Any preferred shares may also be convertible into common shares on terms that would be dilutive to holders

of common shares.

Our subsidiaries may also issue their own preferred shares with a similar impact on our ownership of the subsidiaries.

of March 31, 2021, Lineage had 162,066,897 common shares outstanding, 19,256,924 common shares reserved for issuance upon the

exercise of outstanding options under our employee stock option plans, 77,250 common shares reserved for issuance upon the vesting

and settlement of restricted stock units under our equity incentive plan, and 1,089,900 common shares subject to warrants.

May 1, 2020, Lineage entered into a Controlled Equity Offering SM Sales Agreement (the “Sales Agreement”)

with Cantor Fitzgerald & Co., as sales agent (“Cantor Fitzgerald”), pursuant to which Lineage may, but is not

obligated to, raise up to $25.0 million through the sale of common shares from time to time in at-the-market transactions under

the Sales Agreement.

As of March 31, 2021, Lineage had issued 11,035,444 common shares at a weighted average price per share of

$2.27 for gross proceeds of $25.0 million under the Sales Agreement.

On March 5, 2021, Lineage filed a prospectus supplement with

the SEC in connection with the offer and sale of an additional $25.0 million of common shares under the Sales Agreement increasing

the total offering to $50.0 million.

No sales of the additional $25.0 million shares have been conducted as of May 7, 2021.

directors, executive officers and their affiliates, in the aggregate, owned approximately 24.8% of our outstanding common shares as of

June 30, 2021.

As a result, these shareholders, if acting together, will be able to heavily influence or control matters requiring approval

by our shareholders, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions.

They may also have interests that differ from yours and may vote in a way with which you disagree, and which may be averse to your interests.

This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company, could deter

certain public investors from purchasing our common shares and might ultimately affect the market price of our common shares.

we or our subsidiaries issue additional common shares or preferred shares, investors in our common shares may experience dilution of

their ownership interests.*

and our subsidiaries may issue additional common shares or other securities convertible into or exercisable for common shares to raise

additional capital or to hire or retain employees or consultants, or in connection with future acquisitions of companies or licenses

to technology or rights, or for other business purposes.

The future issuance of additional securities may be dilutive to our shareholders

and may create downward pressure on the trading price of our common shares.

are currently authorized to issue an aggregate of 252,000,000 shares of capital stock consisting of 250,000,000 common shares and 2,000,000

“blank check” preferred shares, which means we may issue, without stockholder approval, one or more series of preferred stock

having such designation, powers, privileges, preferences, including preferences over our common shares respecting dividends and distributions,

terms of redemption and relative participation, optional, or other rights, if any, of the shares of each such series of preferred stock

and any qualifications, limitations or restrictions thereof, as our board of directors may determine.

The terms of one or more series

of preferred stock could dilute the voting power or reduce the value of our common shares.

Any preferred shares may also be convertible

into common shares on terms that would be dilutive to holders of common shares.

Our subsidiaries may also issue their own preferred shares

with a similar impact on our ownership of the subsidiaries.

of June 30, 2021, Lineage had 167,036,511 common shares outstanding, 17,176,498 common shares reserved for issuance upon the exercise

of outstanding options under our employee stock option plans, 61,800 common shares reserved for issuance upon the vesting and settlement

of restricted stock units under our equity incentive plan.

May 1, 2020, Lineage entered into a Controlled Equity Offering SM Sales Agreement (the “Sales Agreement”) with

Cantor Fitzgerald & Co., as sales agent (“Cantor Fitzgerald”), pursuant to which Lineage may, but is not obligated to,

raise up to $25.0 million through the sale of common shares from time to time in at-the-market transactions under the Sales Agreement.

On March 5, 2021, Lineage filed a prospectus supplement with the SEC in connection with the offer and sale of an additional $25.0 million

of common shares under the Sales Agreement increasing the total offering to $50.0 million.

As of March 31, 2021, Lineage issued 11,035,444

common shares at a weighted average price per share of $2.27 for gross proceeds of $25.0 million.

For the three months ended June 30,

2021, Lineage issued an additional 2,824,332 common shares at a weighted average price per share of $2.87 for gross proceeds of $8.1

As of June 30, 2021, Lineage had issued 13,859,776 common shares at a weighted average price per share of $2.39 for gross proceeds

of $33.1 million under the Sales Agreement.

operation of some of our subsidiaries has been financed in part through the sale of shares of capital stock and warrants to purchase

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Future sales of such securities by our subsidiaries could reduce our ownership

interest in the applicable subsidiary, and correspondingly dilute our shareholder’s ownership interests in our consolidated

Certain of our subsidiaries also have their own stock option plans and the exercise of stock options or the sale of

restricted stock under those plans would also reduce our ownership interest in the applicable subsidiary, with a resulting dilutive

effect on the ownership interest of our shareholders in our consolidated enterprise.

disruptions of information technology systems or data security breaches, including the theft of our intellectual property, could

adversely affect our business.

interest in the applicable subsidiary, and correspondingly dilute our shareholder’s ownership interests in our consolidated enterprise.

Certain of our subsidiaries also have their own stock option plans and the exercise of stock options or the sale of restricted stock

under those plans would also reduce our ownership interest in the applicable subsidiary, with a resulting dilutive effect on the ownership

interest of our shareholders in our consolidated enterprise.

disruptions of information technology systems or data security breaches, including the theft of our intellectual property, could adversely

affect our business.

are increasingly dependent on information technology systems and infrastructure to operate our business.

In the ordinary course

of our business, we collect, store, process and transmit large amounts of confidential information, including intellectual property,

proprietary business information and personal information.

It is critical that we do so in a secure manner to maintain the confidentiality,

integrity and availability of such information.

We have also outsourced some of our operations (including parts of our information

technology infrastructure) to a number of third-party vendors who may have, or could gain, access to our confidential information.

In addition, many of those third parties, in turn, subcontract or outsource some of their responsibilities to third parties.

In the ordinary course of our

business, we collect, store, process and transmit large amounts of confidential information, including intellectual property, proprietary

business information and personal information.

It is critical that we do so in a secure manner to maintain the confidentiality, integrity

and availability of such information.

We have also outsourced some of our operations (including parts of our information technology infrastructure)

to a number of third-party vendors who may have, or could gain, access to our confidential information.

In addition, many of those third

parties, in turn, subcontract or outsource some of their responsibilities to third parties.

information technology systems are large and complex and store large amounts of confidential information.

The size and complexity

of these systems make them potentially vulnerable to service interruptions or to security breaches from inadvertent or intentional

actions by our employees, third party vendors and/or business partners, or from cyber-attacks by malicious third parties.

of this nature are increasing in frequency, persistence, sophistication and intensity, and are being conducted by sophisticated

and organized groups and individuals with a wide range of motives (including, but not limited to, industrial espionage) and expertise,

including organized criminal groups, “hacktivists,” nation states and others.

In addition to the extraction of important

information, such attacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering

and other means to affect service reliability and threaten the confidentiality, integrity and availability of our information.

Although the aggregate impact on our operations and financial condition has not been material to date, we have been the target

of events of this nature and expect them to continue.

disruptions of our, our third party vendors’ and/or business partners’ information technology systems or security

breaches could adversely affect our business operations and/or result in the loss, misappropriation, and/or unauthorized access,

use or disclosure of, or the prevention of access to, confidential information (including trade secrets or other intellectual

property, proprietary business information and personal information), and could result in financial, legal, business and reputational

Any such event that leads to unauthorized access, use or disclosure of personal information, including personal information

regarding our patients or employees, could harm our reputation, compel us to comply with federal and/or state breach notification

laws and foreign law equivalents, subject us to mandatory corrective action, require us to verify the correctness of database

contents and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information,

which could disrupt our business, result in increased costs or loss of revenue, and/or result in significant legal and financial

In addition, security breaches and other inappropriate access can be difficult to detect, and any delay in identifying

them may further harm us.

Moreover, the prevalent use of mobile devices to access confidential information increases the risk

of security breaches.

While we have implemented security measures to protect our information technology systems and infrastructure,

there can be no assurance that such measures will prevent service interruptions or security breaches that could adversely affect

our business.

In addition, failure to maintain effective internal accounting controls related to security breaches and cybersecurity

in general could impact our ability to produce timely and accurate financial statements and subject us to regulatory scrutiny.

The size and complexity of

these systems make them potentially vulnerable to service interruptions or to security breaches from inadvertent or intentional actions

by our employees, third party vendors and/or business partners, or from cyber-attacks by malicious third parties.

Attacks of this nature

are increasing in frequency, persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups

and individuals with a wide range of motives (including, but not limited to, industrial espionage) and expertise, including organized

criminal groups, “hacktivists,” nation states and others.

In addition to the extraction of important information, such attacks

could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect

service reliability and threaten the confidentiality, integrity and availability of our information.

Although the aggregate impact on

our operations and financial condition has not been material to date, we have been the target of events of this nature and expect them

disruptions of our, our third party vendors’ and/or business partners’ information technology systems or security breaches

could adversely affect our business operations and/or result in the loss, misappropriation, and/or unauthorized access, use or disclosure

of, or the prevention of access to, confidential information (including trade secrets or other intellectual property, proprietary business

information and personal information), and could result in financial, legal, business and reputational harm to us.

Any such event that

leads to unauthorized access, use or disclosure of personal information, including personal information regarding our patients or employees,

could harm our reputation, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, subject

us to mandatory corrective action, require us to verify the correctness of database contents and otherwise subject us to liability under

laws and regulations that protect the privacy and security of personal information, which could disrupt our business, result in increased

costs or loss of revenue, and/or result in significant legal and financial exposure.

In addition, security breaches and other inappropriate

access can be difficult to detect, and any delay in identifying them may further harm us.

Moreover, the prevalent use of mobile devices

to access confidential information increases the risk of security breaches.

While we have implemented security measures to protect our

information technology systems and infrastructure, there can be no assurance that such measures will prevent service interruptions or

security breaches that could adversely affect our business.

In addition, failure to maintain effective internal accounting controls related

to security breaches and cybersecurity in general could impact our ability to produce timely and accurate financial statements and subject

us to regulatory scrutiny.

of our internal control over financial reporting could harm our business and financial results.

management is responsible for establishing and maintaining adequate internal control over financial reporting.

Because of its

inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement

of our financial statements would be prevented or detected.

Our growth and entry into new products, technologies and markets will

place significant additional pressure on our system of internal control over financial reporting.

Any failure to maintain an effective

system of internal control over financial reporting could limit our ability to report our financial results accurately and timely

or to detect and prevent fraud.

Operating our business through subsidiaries, some of which are located in foreign countries, also

adds to the complexity of our internal control over financial reporting and adds to the risk of a system failure, an undetected

improper use or expenditure of funds or other resources by a subsidiary, or a failure to properly report a transaction or financial

results of a subsidiary.

We allocate certain expenses among Lineage itself and one or more of our subsidiaries, which creates

a risk that the allocations we make may not accurately reflect the benefit of an expenditure or use of financial or other resources

by Lineage as the parent company and the subsidiaries among which the allocations are made.

An inaccurate allocation may impact

our consolidated financial results, particularly in the case of subsidiaries that we do not wholly own since our financial statements

include adjustments to reflect the minority ownership interests in our subsidiaries held by others.

we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements

of Section 404 of the Sarbanes-Oxley Act in a timely manner or assert that our internal control over financial reporting is effective,

or if our independent registered public accounting firm is unable to express an opinion or expresses a qualified or adverse opinion

about the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness

of our financial reports and the market price of our common shares could be negatively affected.

In addition, we could become

subject to investigations by the NYSE American, the Securities and Exchange Commission, and other regulatory authorities, which

could require additional financial and management resources.

Because of its inherent

limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial

statements would be prevented or detected.

Our growth and entry into new products, technologies and markets will place significant additional

pressure on our system of internal control over financial reporting.

Any failure to maintain an effective system of internal control

over financial reporting could limit our ability to report our financial results accurately and timely or to detect and prevent fraud.

Operating our business through subsidiaries, some of which are located in foreign countries, also adds to the complexity of our internal

control over financial reporting and adds to the risk of a system failure, an undetected improper use or expenditure of funds or other

resources by a subsidiary, or a failure to properly report a transaction or financial results of a subsidiary.

We allocate certain expenses

among Lineage itself and one or more of our subsidiaries, which creates a risk that the allocations we make may not accurately reflect

the benefit of an expenditure or use of financial or other resources by Lineage as the parent company and the subsidiaries among which

the allocations are made.

An inaccurate allocation may impact our consolidated financial results, particularly in the case of subsidiaries

that we do not wholly own since our financial statements include adjustments to reflect the minority ownership interests in our subsidiaries

held by others.

we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of

Section 404 of the Sarbanes-Oxley Act in a timely manner or assert that our internal control over financial reporting is effective, or

if our independent registered public accounting firm is unable to express an opinion or expresses a qualified or adverse opinion about

the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of

our financial reports and the market price of our common shares could be negatively affected.

In addition, we could become subject to

investigations by the NYSE American, the Securities and Exchange Commission, and other regulatory authorities, which could require additional

financial and management resources.

economic and stock market conditions may adversely affect the price of our common shares.

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without regard to the operating performance of the issuing companies.

Broad market fluctuations, as well as general economic,

political and other conditions (such as the recent coronavirus outbreak), may adversely affect the market price of our common

business could be negatively affected as a result of actions of activist shareholders, and such activism could affect the trading

value of our securities.

may, from time to time, engage in proxy solicitations or advance stockholder proposals, or otherwise attempt to effect changes

and assert influence on our board of directors and management.

Activist campaigns that contest or conflict with our strategic

direction or seek changes in the composition of our board of directors could have an adverse effect on our operating results and

financial condition.

A proxy contest would require us to incur significant legal and advisory fees, proxy solicitation expenses

and administrative and associated costs and require significant time and attention by our board of directors and management, diverting

their attention from the pursuit of our business strategy.

Any perceived uncertainties as to our future direction and control,

our ability to execute on our strategy, or changes to the composition of our board of directors or senior management team arising

from a proxy contest could lead to the perception of a change in the direction of our business or instability which may result

in the loss of potential business opportunities, make it more difficult to pursue our strategic initiatives, or limit our ability

to attract and retain qualified personnel and business partners, any of which could adversely affect our business and operating

If individuals are ultimately elected to our board of directors with a specific agenda, it may adversely affect our ability

to effectively implement our business strategy and create additional value for our stockholders.

We may choose to initiate, or

may become subject to, litigation as a result of the proxy contest or matters arising from the proxy contest, which would serve

as a further distraction to our board of directors and management and would require us to incur significant additional costs.

In addition, actions such as those described above could cause significant fluctuations in our stock price based upon temporary

or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of

our business.

analysts may not initiate coverage or continue to cover our common shares, and this may have a negative impact on the market price

of our common shares.

trading market for our common shares depends, in part, on the research and reports that securities analysts publish about our

business and our common shares.

Broad market fluctuations, as well as general economic, political

and other conditions (such as the recent coronavirus outbreak), may adversely affect the market price of our common shares.

business could be negatively affected as a result of actions of activist shareholders, and such activism could affect the trading value

of our securities.

may, from time to time, engage in proxy solicitations or advance stockholder proposals, or otherwise attempt to effect changes and assert

influence on our board of directors and management.

Activist campaigns that contest or conflict with our strategic direction or seek

changes in the composition of our board of directors could have an adverse effect on our operating results and financial condition.

proxy contest would require us to incur significant legal and advisory fees, proxy solicitation expenses and administrative and associated

costs and require significant time and attention by our board of directors and management, diverting their attention from the pursuit

of our business strategy.

Any perceived uncertainties as to our future direction and control, our ability to execute on our strategy,

or changes to the composition of our board of directors or senior management team arising from a proxy contest could lead to the perception

of a change in the direction of our business or instability which may result in the loss of potential business opportunities, make it

more difficult to pursue our strategic initiatives, or limit our ability to attract and retain qualified personnel and business partners,

any of which could adversely affect our business and operating results.

If individuals are ultimately elected to our board of directors

with a specific agenda, it may adversely affect our ability to effectively implement our business strategy and create additional value

for our stockholders.

We may choose to initiate, or may become subject to, litigation as a result of the proxy contest or matters arising

from the proxy contest, which would serve as a further distraction to our board of directors and management and would require us to incur

significant additional costs.

In addition, actions such as those described above could cause significant fluctuations in our stock price

based upon temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and

prospects of our business.

analysts may not initiate coverage or continue to cover our common shares, and this may have a negative impact on the market price of

our common shares.

trading market for our common shares depends, in part, on the research and reports that securities analysts publish about our business

and our common shares.

We do not have any control over these analysts.

There is no guarantee that securities analysts

will cover our common shares.

If securities analysts do not cover our common shares, the lack of research coverage may adversely

affect the market price of those shares.

If securities analysts do cover our common shares, they could issue reports or recommendations

that are unfavorable to the price of our common shares, and they could downgrade a previously favorable report or recommendation,

and in either case our share prices could decline as a result of the report.

If one or more of these analysts does not initiate

coverage, ceases to cover our common shares or fails to publish regular reports on our business, we could lose visibility in the

financial markets, which could cause our share prices or trading volume to decline.

There is no guarantee that securities analysts will cover our

common shares.

If securities analysts do not cover our common shares, the lack of research coverage may adversely affect the market price

of those shares.

If securities analysts do cover our common shares, they could issue reports or recommendations that are unfavorable

to the price of our common shares, and they could downgrade a previously favorable report or recommendation, and in either case our share

prices could decline as a result of the report.

If one or more of these analysts does not initiate coverage, ceases to cover our common

shares or fails to publish regular reports on our business, we could lose visibility in the financial markets, which could cause our

share prices or trading volume to decline.

Unregistered Sales of Equity Securities and Use of Proceeds

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors