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Item 3. Legal Proceedings

2022-03-10 compared with 2021-03-11 · 28 added, 61 removed, 6 unchanged (94% of the section changed)

1 unchanged sentence

While management presently believes

that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our financial position,

cash flows, or overall trends in results of operations, legal proceedings are subject to inherent uncertainties, and unfavorable

rulings or outcomes could occur that have individually or in aggregate, a material adverse effect on our business, financial condition

or operating results.

Except as described below, we are not currently subject to any pending material litigation, other than ordinary

routine litigation incidental to our business, as described above.

February 19, 2019, a putative shareholder class action lawsuit was filed (captioned Lampe v.

Asterias Biotherapeutics, Inc.

et al ., Case No.

RG19007391) in the Superior Court of the State of California, County of Alameda challenging the Asterias

On March 1, 2019, Asterias made certain amendments and supplements to its public disclosures regarding the Asterias Merger

(the “Supplemental Disclosures”).

On May 3, 2019, an amended class action complaint (the “Amended Complaint”)

The Amended Complaint named Lineage, Patrick Merger Sub, Inc., the Asterias board of directors, one member of Lineage’s

board of directors, and certain stockholders of both Lineage and Asterias.

The action was brought by two purported stockholders

of Asterias, on behalf of a putative class of Asterias stockholders, and asserted breach of fiduciary duty and aiding and abetting

claims under Delaware law.

The Amended Complaint alleged, among other things, that the process leading up to the Asterias Merger

was conflicted and inadequate, and that the proxy statement filed by Asterias with the Commission omitted certain material information,

which allegedly rendered the information disclosed materially misleading.

The Amended Complaint sought, among other things, that

a class be certified, the recovery of monetary damages, and attorneys’ fees and costs.

June 3, 2019, defendants filed demurrers to the Amended Complaint.

On August 13, 2019, the parties submitted a stipulation to

the court seeking dismissal of the action with prejudice as to the named Plaintiffs and without prejudice as to the unnamed putative

class members, and disclosing to the court the parties’ agreement to resolve, for $200,000, Plaintiffs’ claim for

an award of attorneys’ fees and expenses in connection with the purported benefit conferred on Asterias stockholders by

the Supplemental Disclosures.

The court granted the stipulation and dismissed the action August 14, 2019.

Lineage continues to

believe that the claims and allegations in the action lack merit, but believed that it was in Lineage’s shareholders’

best interest for the action to be dismissed and to resolve the fee claim in a timely manner without additional costly litigation

October 14, 2019, another putative class action lawsuit was filed challenging the Asterias Merger.

This action (captioned Ross

Lineage Cell Therapeutics, Inc., et al.

2019-0822) was filed in Delaware Chancery Court and names Lineage, the

Asterias board of directors, one member of Lineage’s board of directors, and certain stockholders of both Lineage and Asterias

as defendants.

The action was brought by a purported stockholder of Asterias, on behalf of a putative class of Asterias stockholders,

and asserts breach of fiduciary duty and aiding and abetting claims under Delaware law.

The complaint alleges, among other things,

that the process leading up to the Asterias Merger was conflicted, that the Asterias Merger consideration was inadequate, and

that the proxy statement filed by Asterias with the Commission omitted certain material information, which allegedly rendered

the information disclosed materially misleading.

The complaint seeks, among other things, that a class be certified, the recovery

of monetary damages, and attorneys’ fees and costs.

that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our financial position, cash

flows, or overall trends in results of operations, legal proceedings are subject to inherent uncertainties, and unfavorable rulings or

outcomes could occur that have individually or in aggregate, a material adverse effect on our business, financial condition or operating

Except as described below, we are not currently subject to any pending material litigation, other than ordinary routine litigation

incidental to our business, as described above.

October 14, 2019, a putative class action lawsuit was filed challenging the Asterias Merger.

This action (captioned Ross v.

Cell Therapeutics, Inc., et al.

2019-0822) was filed in Delaware Chancery Court and names Lineage, the Asterias board of

directors, one member of Lineage’s board of directors, and certain stockholders of both Lineage and Asterias as defendants.

action was brought by a purported stockholder of Asterias, on behalf of a putative class of Asterias stockholders, and asserts breach

of fiduciary duty and aiding and abetting claims under Delaware law.

The complaint alleges, among other things, that the process leading

up to the Asterias Merger was conflicted, that the Asterias Merger consideration was inadequate, and that the proxy statement filed by

Asterias with the Commission omitted certain material information, which allegedly rendered the information disclosed materially misleading.

The complaint seeks, among other things, that a class be certified, the recovery of monetary damages, and attorneys’ fees and costs.

On December 20, 2019, the defendants moved to dismiss the complaint.

On February 10, 2020, the plaintiff filed an opposition.

Defendants filed their replies on March 13, 2020.

On June 23, 2020, a

hearing on the motions to dismiss occurred.

On September 21, 2020, the Chancery Court denied the motion to dismiss as to Lineage

and certain members of the Asterias board of directors, and it granted the motion to dismiss as to all other defendants.

30, 2020, the remaining defendants filed an answer to the complaint.

filed their replies on March 13, 2020.

On June 23, 2020, a hearing on the motions to dismiss occurred.

On September 21, 2020, the Chancery

Court denied the motion to dismiss as to Lineage and certain members of the Asterias board of directors, and it granted the motion to

dismiss as to all other defendants.

On October 30, 2020, the remaining defendants filed an answer to the complaint.

The parties are currently

engaged in discovery.

A five-day trial before the Chancery Court is currently scheduled for October 17-21, 2022.

believes the allegations in the action lack merit and intends to vigorously defend the claims asserted.

It is impossible at this

time to assess whether the outcome of this proceeding will have a material adverse effect on Lineage’s consolidated results

of operations, cash flows or financial position.

Therefore, in accordance with ASC 450, Contingencies, Lineage has not

recorded any accrual for a contingent liability associated with this legal proceeding based on its belief that a liability, while

possible, is not probable nor estimable, and any range of potential contingent liability amounts cannot be reasonably estimated

at this time.

Lineage records legal expenses as incurred.

It is impossible at this time

to assess whether the outcome of this proceeding will have a material adverse effect on Lineage’s consolidated results of operations,

cash flows or financial position.

SAFETY DISCLOSURES

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-K

Item 3. Legal Proceedings