What changed in this filing

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Item 1A. Risk Factors

2021-11-10 compared with 2021-08-12 · 209 added, 180 removed, 1226 unchanged (24% of the section changed)

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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 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

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

ended September 30, 2021 were $21.0 million, and we had an accumulated deficit of $308.1 million as of September 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.

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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.

We incurred research and development expenses amounting to approximately $9.1 million during the nine

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

If we successfully develop a new technology

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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.

September 30, 2021, we had $65.1 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

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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.

We believe that our cash, cash equivalents and marketable securities as of September 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

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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$169.9 million and $118.6 million, respectively.

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.

In addition, the Company has U.S.

federal and California research and development (R&D)

credit carryforwards of $3.2 million and $5.7 million, respectively.

Included in these amounts are NOLs and R&D credits 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

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.

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.

The federal R&D

credits expire in varying amounts between 2021 and 2040, the California credits have no expiration date.

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.

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.

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.

As the merger triggered an ownership change, the acquired

net operating loss carryforwards and credit are subject to limitation under Section 382 of the Internal Revenue Service Code.

Lineage will only be able to utilize 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.

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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regulatory and other risks applicable to them.*

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

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

publicly traded company.

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.

As of September 30, 2021, the value of

our investment in OncoCyte was approximately $4.0 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

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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;

federal Anti-Kickback Statute, which prohibits, among other things, persons and entities 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

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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.

which began February 15, 2021 and remained 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.

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

Additionally,

Congress is considering additional health reform measures as part of the budget reconciliation process.

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

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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.

As a result of litigation

challenging the Most Favored Nation model, on August 10, 2021, CMS published a proposed rule that seeks to rescind the Most Favored Nation

model interim final rule.

Further, in July 2021, the Biden administration released an executive order that included multiple provisions

aimed at prescription drugs.

In response to President Biden’s executive order, on September 9, 2021, the U.S.

of Health and Human Services, or HHS, released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug

pricing reform.

The plan sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative

actions HHS can take to advance these principles.

No legislation or administrative actions have been finalized to implement these principles.

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 in response to 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,

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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.

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

Our current and future interactions

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

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:

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

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

September 2021, we provided updates 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.

restoration of retinal tissue previously reported in three patients had been maintained for up to 9 months in the two most recent restoration

patients and for up to 33 months in the first case of restoration.

These three patients exhibited optical coherence tomography (OCT)

evidence of newly integrated RPE cells, and layers of retinal tissue (i.e.

outer plexiform, outer nuclear layer, ellipsoid zone) in areas

that previously showed no presence of these structures at baseline.

All three of these patient’s visual acuities increased above

baseline levels within 6 months post-transplant.

Overall, the best corrected visual acuity of the better vision Cohort 4 patients has

improved or remained stable in 8/12 (67%) OpRegen treated eyes while decreasing in 9/12 (75%) of their respective fellow eyes.

these patients are being closely monitored for additional evidence of clinical benefit.

Specifically,

additional data presented showed that as patients continued to progress into post-operative follow-up, eyes receiving OpRegen trended

toward improvement in visual acuity, a secondary objective under the study, while their untreated eyes typically lost visual acuity,

as expected with this progressive disease.

As additional patients have reached longer periods post-treatment, differences in visual acuity

between treated and untreated eyes across Cohort 4 patients became statistically significant beginning at month 9 (P = 0.0085), as well

as months 12 (P = 0.0220) and 15 (P = 0.0273) as determined via 2-sided Wilcoxon Signed Rank (using NCSS, LLC statistical software).

These results, when combined with the OCT findings, suggest that both a structural and functional benefit is possible with OpRegen therapy.

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

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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.

product candidates too expensive to compete in the medical marketplace 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.

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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.

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

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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

Cell Cure to seek approvals and to satisfy specified conditions to manufacture products, or 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

Such grants are applied for on a yearly basis and may not be available or only partially granted in the future, which would increase

In the context of such approvals, Cell Cure will be required to make substantial monetary payments 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.*

Cure has received Israeli government grants for certain of its research and development activities.

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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.

full by the Grant Recipient including restrictions on the sale, transfer or licensing to a non-Israeli 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

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Transfer of IIA-funded know-how

outside of Israel requires prior approval and is subject to approval and payment of a redemption fee to the IIA calculated according

to the relevant formulas provided under the Innovation Law.

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.

outside of Israel requires prior approval and is subject to approval and payment of a redemption fee, which can be substantial, to the

IIA calculated according to the relevant formulas provided under the Innovation Law.

A transfer or license for the purpose of the Innovation

Law is 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

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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.

the approval of IIA, or limit the economic benefit that we might derive under such agreements.

We cannot be certain that any approval

of IIA will be obtained on terms that are acceptable to us, or at all.

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 significantly 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

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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.

For example, from January 1, 2021 through November 5, 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

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directors, executive officers and their affiliates, in the aggregate, owned approximately 24.6% 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.

September 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.

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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 September 30, 2021, Lineage had 168,465,000 common shares outstanding, 17,207,345 common shares reserved for issuance upon the exercise

of outstanding options under our employee stock option plans, 46,350 common shares reserved for issuance upon the vesting and settlement

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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

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.

For the three months ended June 30,

For the three months ended September

30, 2021, Lineage issued an additional 1,048,959 common shares at a weighted average price per share of $2.62 for gross proceeds of $2.7

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.

As of September 30, 2021, Lineage had issued 14,908,735 common shares at a weighted average price per share of $2.41 for gross

proceeds of $35.9 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

124 unchanged sentences

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What changed 10-Q

Item 1A. Risk Factors