Item 3. Legal Proceedings
ITEM
3.
LEGAL
PROCEEDINGS
From
time to time, we are subject to legal proceedings and claims in the ordinary course of business. 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.
65 | P a g e
On
October 14, 2019, a putative class action lawsuit was filed challenging the Asterias Merger. This action (captioned Ross v. Lineage
Cell Therapeutics, Inc., et al. , C.A. No. 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.
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. 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.
Lineage
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.
ITEM
4.
MINE
SAFETY DISCLOSURES
Not
applicable.
66 | P a g e
PART
II