Item 9A. Controls and Procedures
ITEM 9A.
CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
It
is management’s responsibility to establish and maintain adequate internal control over all financial reporting pursuant to Rule
13a-15 under the Securities Exchange Act of 1934 (“Exchange Act”). Our management, including our principal executive officer
and our principal financial officer, as amended, have reviewed and evaluated the effectiveness of our disclosure controls and procedures
as of the end of our fourth quarter. Following this review and evaluation , management collectively determined that our disclosure
controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under
the Exchange Act: (i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission
rules and forms; and (ii) is accumulated and communicated to management, including our chief executive officer and our chief financial
officer, as appropriate to allow timely decisions regarding required disclosure.
Changes
in Internal Control over Financial Reporting
There were no changes in our
internal control over financial reporting that occurred during the fourth quarter of 2021 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
Management’s
Report on Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over
financial reporting, as defined in Exchange Act Rule 13a-15(f), is a process designed by, or under the supervision of, our principal
executive officer, our principal operations officer, and our principal financial officer, and effected by our Board of Directors, management,
and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures
that:
●
Pertain to the maintenance
of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
●
Provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;
and
●
Provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material
effect on the financial statements.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed,
have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect
to financial statement preparation and presentation. The scope of management’s assessment of the effectiveness of internal control
over financial reporting includes our consolidated subsidiaries.
Our
management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021, based on criteria established
in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on this assessment, management believes that, as of that date, our internal control over financial reporting was effective.
ITEM 9B.
OTHER INFORMATION
On March 9, 2022, our board
of directors set June 16, 2022 as the date of our 2022 annual meeting of shareholders (the “2022 Annual Meeting”). This date
is more than 30 days before the one-year anniversary of our 2021 annual meeting of shareholders, which was held on September 13, 2021.
In light of the foregoing, and in accordance with our amended and restated bylaws (the “Bylaws”), in order for any business
to be brought before the 2022 Annual Meeting by a shareholder and for any person to be nominated for election to our board of directors
at the 2022 Annual Meeting, by a shareholder, such shareholder must notify us of such intention by notice received at our principal executive
offices not later than the close of business on March 31, 2022. Shareholder proposals intended for inclusion in our proxy statement for
the 2022 Annual Meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
must be received at our principal executive offices no later than the close of business on March 31, 2022, which we believe is a reasonable
time before we begin to print and mail proxy materials for the 2022 Annual Meeting. In addition, all such shareholder notices and shareholder
proposals must conform to the applicable requirements of the Bylaws, the rules and regulations promulgated under the Exchange Act and
other applicable law. All such notices and shareholder proposals should be directed to: “2173 Salk Avenue, Suite 200, Carlsbad,
CA 92008, Attention: Secretary.”
ITEM 9C.
Disclosure
Regarding Foreign Jurisdictions that Prevent Inspections
Not
applicable
121 | P a g e
PART
III
ITEM
10.
DIRECTORS,
EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
The
name, age, and background of each of our directors are contained under the caption “Board of Directors” in our Proxy Statement
for our 2022 Annual Meeting of Shareholders (the “2022 Proxy Statement”) and are incorporated herein by reference. Information
about our executive officers, committees of the Board of Directors, and compensation of directors is reported under the captions “Executive
Officers” and “Corporate Governance” in our 2022 Proxy Statement and is incorporated herein by reference.
We
have a written Code of Ethics that applies to our principal executive officer, our principal financial officer and accounting officer,
our other executive officers, and our directors. The purpose of the Code of Ethics is to promote (i) honest and ethical conduct, including
the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate,
timely, and understandable disclosure in reports and documents that we file with or submit to the Securities and Exchange Commission
and in our other public communications; (iii) compliance with applicable governmental rules and regulations; (iv) prompt internal reporting
of violations of the Code of Ethics to an appropriate person or persons identified in the Code; and (v) accountability for adherence
to the Code. A copy of our Code of Ethics has been posted on our internet website and can be found at www.lineagecell.com . If
we amend or waive a provision of our Code of Ethics that applies to our chief executive officer or chief financial officer, we will post
the amended Code of Ethics or information about the waiver on our internet website.
Information
about our compliance with Section 16(a) of the Securities Exchange Act of 1934 is reported under the caption “Delinquent Section
16(a) Reports” in our 2022 Proxy Statement and is incorporated herein by reference.
ITEM
11.
EXECUTIVE
COMPENSATION
Information
on compensation of our executive officers is reported under the caption “Executive Compensation” in our 2022 Proxy Statement
and is incorporated herein by reference.
ITEM
12.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS
Information
on the number of common shares of Lineage beneficially owned by: (i) each shareholder known by us to be the beneficial owner of 5% or
more of our common shares; (ii) each of our directors; (iii) each of our named executive officers; and (iv) all of our current directors
and executive officers as a group is contained under the caption “Principal Shareholders” in our 2022 Proxy Statement and
is incorporated herein by reference.
ITEM
13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information
about transactions with related persons; review, and approval or ratification of transactions with related persons; and director independence
is reported under the captions “Board of Directors” and “Certain Relationships and Related Transactions” in our
2022 Proxy Statement and is incorporated herein by reference.
ITEM
14.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
Information
about our Audit Committee’s pre-approval policy for audit services, and information on our principal accounting fees and services
is reported under the caption “Ratification of the Selection of Our Independent Registered Public Accounting Firm” in our
2022 Proxy Statement and is incorporated herein by reference.
122 | P a g e
PART
IV
ITEM 15.
EXHIBITS AND, FINANCIAL
STATEMENT SCHEDULES
(a)(1)
Financial Statements.
The
following financial statements of Lineage are filed in this Report:
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Loss
Consolidated Statements of Changes in Shareholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
(a)(2)
Financial Statement Schedules
There
are no financial statement schedules provided because the information called for is either not required or is shown either in the financial
statements or the notes thereto.
(a)(3)
Exhibits.
Incorporation by
Reference
Exhibit
Number
Description
Exhibit
Number
Filing
Filing Date
File No.
2.1^
Agreement and Plan of Merger dated November 7, 2018, among Registrant, Patrick Merger Sub, Inc. and Asterias Biotherapeutics, Inc. (“Asterias”)
2.1
8-K
November 8, 2018
001-12830
3.1
Restated Articles of Incorporation, as amended
3.1
10-Q
May 10, 2018
001-12830
3.2
Certificate of Ownership
3.1
8-K
August 12, 2019
001-12830
3.3
Amended and Restated Bylaws
3.2
8-K
August 12, 2019
001-12830
4.1
Specimen of Common Share Certificate
S-1
December 18, 1991
033-44549
4.2
Description of Capital Stock of the Registrant
4.2
10-K
March 11, 2021
001-12830
10.1
Commercial License and Option Agreement between Registrant and Wisconsin Alumni Research Foundation (“WARF Agreement”)
10.1
8-K
January 9, 2008
001-12830
10.1(a)
First Amendment of WARF Agreement dated March 11, 2009
10.38
10-K
March 23, 2009
001-12830
10.2+
Lineage Cell Therapeutics 2012 Equity Incentive Plan, as amended July 2015 (“2012 Plan”)
4.1
S-8
July 15, 2015
333-205661
10.2(a)+
Amendment to 2012 Plan effective June 2017
4.2
S-8
July 7, 2017
333-219204
10.2(b)+
Amendment to 2012 Plan effective July 2019
99.3
S-8
August 8, 2019
333-233132
10.2(c)+
Amendment to 2012 Plan effective August 2019
10.1
10-Q
November 12, 2019
001-12830
10.2(d)+
2012 Plan Form of Employee Incentive Stock Option Agreement
10.7
10-Q
November 12, 2013
001-12830
10.2(e)+
2012 Plan Form of Non-employee Director Stock Option Agreement
10.8
10-Q
November 12, 2013
001-12830
10.2(f)+
2012 Plan Stock Option Grant Agreement
10.2
10-Q
November 12, 2019
000-12830
10.2(g)+
2012 Plan Form of Restricted Stock Unit
10.6
10-K
March 12, 2020
001-12830
10.3+
Inducement Stock Option Agreement between Registrant and Brian Culley
10.38
10-K
March 14, 2019
001-12830
10.4†
Second Amended and Restated License Agreement dated June 15, 2017, between Cell Cure Neurosciences, Ltd. and Hadasit Medical Research Services and Development Ltd. (“Hadasit License”)
10.2
10-Q
August 9, 2017
001-12830
123 | P a g e
10.4(a)
Amendment to Hadasit License dated January 8, 2018
10.38
10-K
March 15, 2018
001-12830
10.4(b) * ††
Second Amendment to Hadasit License dated December 1, 2019
10.4(c) * ††
Side Letter Agreement dated December 17, 2021 between Hadasit Medical Research Services and Development Ltd., Cell Cure Neurosciences Ltd., Genentech, Inc. and F. Hoffmann-La Roche Ltd
10.4(d) * ††
Second Side Letter Agreement dated December 17, 2021 between Hadasit Medical Research Services and Development Ltd. and Cell Cure Neurosciences Ltd.
10.5†
Debt and Note Purchase Agreement dated June 16, 2017, as amended June 29, 2017, between Registrant and HBL-Hadasit Bio-Holdings Ltd.
10.3
10-Q
August 9, 2017
001-12830
10.6†
Share Purchase and Transfer Agreement dated June 16, 2017, by and among Registrant and HBL-Hadasit Bio-Holdings Ltd. and Cell Cure Neurosciences Ltd.
10.4
10-Q
August 9, 2017
001-12830
10.7+
Employment Agreement effective September 17, 2018, between Registrant and Brian Culley
10.1
8-K
September 18, 2018
001-12830
10.8
Royalty Agreement dated October 1, 2013, between Asterias and Geron Corporation
10.6
Asterias S-1/A
August 13, 2013
333-187706
10.9
Exclusive Sublicense Agreement between Geron Corporation and Asterias
10.7
Asterias S-1/A
August 13, 2013
333-187706
10.10†
Non-exclusive License Agreement dated October 7, 2013, between WARF and Asterias
10.5
Asterias 10-Q
November 12, 2013
000-55046
10.11†
Clinical Trial and Option Agreement dated September 8, 2014, between Asterias and Cancer Research UK and Cancer Research Technology Limited
10.1
Asterias 10-Q/A
January 13, 2015
001-36646
10.11(a) ††
Second Amendment to Clinical Trial and Option Agreement dated May 6, 2020 between Cancer Research UK, Cancer Research Technology Limited, Asterias Biotherapeutics, Inc. and Registrant
10.1
10-Q
August 6, 2020
001-12830
10.12 ††
Agreement dated May 6, 2020 between CRT and Registrant
10.2
10-Q
August 6, 2020
001-12830
10.13* ††
Collaboration and License Agreement dated December 17, 2021 between F.
Hoffmann-La Roche Ltd, Genentech, Inc., Cell Cure Neurosciences Ltd., and Registrant
21.1*
List of Subsidiaries
23.1*
Consent of WithumSmith+Brown, PC
23.2*
Consent of OUM & Co. LLP
31.1*
Certification of Chief Executive Officer and
Interim Chief Financial Officer pursuant to Form of Rule 13a-14(a), as Adopted Pursuant to Section 302(a) of the Sarbanes-Oxley Act
of 2002
32.1#
Certification of Chief Executive Officer and
Interim Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
101*
Interactive Data File
101.INS*
XBRL Instance Document
101.SCH*
XBRL Taxonomy Extension Schema
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase
101.DEF*
XBRL Taxonomy Extension Definition Document
101.LAB*
XBRL Taxonomy Extension Label Linkbase
101.PRE*
XBRL Taxonomy Extension Presentation Linkbase
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained
in Exhibit 101)
^ The schedules and exhibits to the merger agreement
have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the
Securities and Exchange Commission upon request.
* Filed herewith
# Furnished herewith
+ Indicates management contract or compensatory plan
† Portions
of this exhibit have been omitted pursuant to a request for confidential treatment
††
Certain information in this exhibit has been omitted pursuant to Item 601 of Regulation S-K.
ITEM
16. FORM 10-K SUMMARY
None
124 | P
a g e
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form
10-K to be signed on its behalf by the undersigned, thereunto duly authorized on the 10 th day of March 2022.
LINEAGE CELL THERAPEUTICS, INC.
By:
/s/
Brian M. Culley
Brian M. Culley
Chief Executive Officer
Signature
Title
Date
/s/
Brian M. Culley
Chief Executive Officer
and Director
March
10, 2022
BRIAN M. CULLEY
(Principal Executive)
/s/
Kevin Leon Cook
Chief Financial Officer
March
10, 2022
KEVIN LEON COOK
(Principal Financial and
Accounting Officer)
/s/
Deborah Andrews
Director
March
10, 2022
DEBORAH ANDREWS
/s/ Dipti Amin
Director
March
10, 2022
DIPTI AMIN
/s/
Don M. Bailey
Director
March
10, 2022
DON M. BAILEY
/s/
Neal C. Bradsher
Director
March
10, 2022
NEAL C. BRADSHER
/s/
Alfred D. Kingsley
Director
March
10, 2022
ALFRED
D. KINGSLEY
/s/ Anula Jayasuriya
Director
March 10, 2022
ANULA JAYASURIYA
/s/
Michael H. Mulroy
Director
March
10, 2022
MICHAEL H. MULROY
/s/
Angus C. Russell
Director
March
10, 2022
ANGUS C. RUSSELL
125 | P a g e