Lineage Cell Therapeutics(LCTX) - 2022 Q1 - Quarterly Report

Financial Position - As of March 31, 2022, cash and cash equivalents increased to $78.1 million as of March 31, 2022, compared to $55.7 million as of December 31, 2021[58]. - As of March 31, 2022, net accounts receivable amounted to $50.6 million, with an allowance for doubtful accounts of approximately $74,000[54]. - The total shareholders' equity as of March 31, 2022, was $85,218,000, down from $90,898,000 as of December 31, 2021[96]. - The fair value of Lineage's financial instruments approximates their carrying amounts due to their short-term nature[86]. - Lineage's marketable equity securities include shares in OncoCyte and Hadasit Bio-Holdings Ltd, with fair values quoted on respective stock exchanges[37]. Revenue and Collaboration Agreements - Lineage recorded $44.8 million and $0.8 million of deferred revenue related to collaboration agreements with Roche and Immunomic Therapeutics, Inc. as of March 31, 2022[53]. - For the three months ended March 31, 2022, Lineage recognized $4.9 million of revenue from the Roche collaboration agreement[53]. - For the three months ended March 31, 2022, total revenue was $5.2 million, a significant increase from $391,000 in the same period of 2021, primarily driven by a $4.9 million recognition from collaboration revenues related to a $50 million upfront licensing payment from Roche[66]. - Lineage is eligible to receive up to $620 million in milestone payments from Roche for the development and commercialization of OpRegen[43]. - Lineage is entitled to upfront licensing fees totaling up to $2 million and up to $67 million in development and commercial milestones from Immunomic Therapeutics, Inc.[44]. Expenses and Liabilities - The company reported accounts payable and accrued liabilities totaling $8.96 million as of March 31, 2022, a decrease from $27.97 million at the end of 2021, largely due to a $21 million payment related to the Roche Agreement[79]. - Lineage incurred approximately $620,000 in legal expenses related to shareholder class action lawsuits through March 31, 2022[87]. - The company has recorded an accrual for a liability associated with a proposed settlement, acknowledging a probable liability with an estimable loss amount[145]. - The company expects to contribute approximately $3.5 million towards a settlement of approximately $10.7 million related to Asterias litigation, with the balance covered by insurance[151]. Assets and Intangible Assets - Goodwill and intangible assets, net, were valued at $46.79 million as of March 31, 2022, with no change from December 31, 2021[74]. - The company recognized approximately $32,000 in amortization expense for intangible assets during the three months ended March 31, 2022[76]. - Lineage's property and equipment, net, decreased to $4.55 million as of March 31, 2022, from $4.87 million at the end of 2021[72]. Stock and Equity - As of March 31, 2022, Lineage had 169,727,395 common shares issued and outstanding, an increase from 169,477,347 as of December 31, 2021[89]. - The 2021 Equity Incentive Plan allows for the issuance of up to 15,000,000 shares, with 9,628,055 shares available for grant as of March 31, 2022[101]. - Stock-based compensation expense for the three months ended March 31, 2022, totaled $1,106,000, compared to $539,000 for the same period in 2021[106]. - Total unrecognized compensation costs related to unvested stock options and RSUs were $12.9 million as of March 31, 2022, expected to be recognized over approximately 3.0 years[106]. Lease Commitments - Lineage's lease for office space in Carlsbad, California, has a base rent of $23,959 per month, increasing by 3% on August 1, 2022[119]. - Future minimum lease commitments for operating leases total $2.871 million, with the largest commitment of $763,000 due in 2022[128]. - The weighted average remaining lease term for operating leases is 3.4 years, with a discount rate of 7.7%[127]. Legal and Insurance Matters - Lineage has entered into employment agreements that may incur severance obligations for changes in control and involuntary terminations[146]. - The company maintains various liability insurance policies to limit financial exposure related to indemnification agreements, which have historically not resulted in claims[148]. - Lineage has not recorded any liabilities for indemnification agreements as of March 31, 2022, and 2021[148]. Market and Risk Disclosures - Under SEC rules, as a smaller reporting company, Lineage is not required to provide certain market risk disclosures[193].