Stock-Based Awards

9 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

11. Stock-Based Awards

Equity Incentive Plan Awards

In September 2021, our shareholders approved the Lineage Cell Therapeutics, Inc. 2021 Equity Incentive Plan, and our shareholders approved amendments to increase the number of common shares that may be issued thereunder by 19,500,000 in September 2023 and by an additional 19,500,000 in June 2025 (as amended to date, the “2021 Plan”). The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), and other stock awards. Generally, all of our employees (including those of our affiliates), non-employee directors and consultants are eligible to participate in the 2021 Plan.

Subject to adjustment for certain changes in our capitalization, the aggregate number of our common shares that may be issued under the 2021 Plan will not exceed the sum of (i) 54,000,000 shares and (ii) the number of shares subject to awards granted under the Lineage Cell Therapeutics Inc. 2012 Equity Incentive Plan (the “2012 Plan”) that were outstanding when the 2021 Plan initially became effective in 2021 and are not issued because such awards expire or otherwise terminate. As a result of the approval of the 2021 Plan by our shareholders in 2021, no additional awards will be granted under the 2012 Plan. As of September 30, 2025, there were 35,338,755 shares available for grant under the 2021 Plan.

A summary of activity under the 2021 Plan is as follows (in thousands, except per share amounts):


	Number of Options Outstanding (in thousands)			Weighted Average Exercise Price (per share)		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2024		16,658		$	1.30		8.23	$	—
Options granted		7,823		$	0.56
Options exercised		(181	)	$	1.22
Options expired/forfeited/cancelled		(324	)	$	1.05
Balance at September 30, 2025		23,976		$	1.06		8.10	$	15,061
Options exercisable at September 30, 2025		10,148		$	1.34		7.16	$	3,570
Options exercisable and expected to vest at September 30, 2025		23,976		$	1.06		8.10	$	15,061


	Number of RSUs Outstanding (in thousands)			Weighted Average Grant Date Fair Value (per share)
Balance at December 31, 2024		501		$	1.24
RSUs forfeited		(100	)	$	0.21
RSUs vested		(67	)	$	1.50
Balance at September 30, 2025		334		$	1.50

A summary of activity of the 2012 Plan, and the 2018 inducement option (which was issued to a Lineage executive outside of Lineage’s equity plans), is as follows (in thousands, except per share amounts):


	Number of Options Outstanding (in thousands)			Weighted Average Exercise Price (per share)
Balance at December 31, 2024		10,068		$	1.84
Options exercised		(441	)	$	0.97
Options expired/forfeited/cancelled		(1,311	)	$	2.33
Balance at September 30, 2025		8,316		$	1.81

Stock-based Compensation Expense

Operating expenses within the condensed consolidated statements of operations include stock-based compensation expense as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Research and development	$	179	$	172	$	531	$	476
General and administrative		1,020		1,158		3,123		3,286
Total stock-based compensation expense	$	1,199	$	1,330	$	3,654	$	3,762

As of September 30, 2025, total unrecognized compensation costs related to unvested stock options and unvested RSUs under all equity plans, was $7.5 million, which is expected to be recognized as expense over a weighted average period of approximately 2.5 years for stock options and 0.8 years for RSUs.

Basic and diluted net income (loss) per share attributable to common shareholders

Basic earnings per share is calculated by dividing net income or loss attributable to Lineage common shareholders by the weighted average number of common shares outstanding, net of stock options and RSUs, subject to repurchase by Lineage, if any, during the period. Diluted earnings per share is calculated by dividing the net income or loss attributable to Lineage common shareholders by the weighted average number of common shares outstanding, adjusted for the effects of potentially dilutive common shares issuable under outstanding stock options, restricted stock awards and warrants, using the treasury-stock method, convertible preferred stock, if any, using the if-converted method, and treasury stock held by subsidiaries, if any.

For the three and nine months ended September 30, 2025 and 2024, Lineage reported a net loss attributable to common shareholders, and therefore, all potentially dilutive common shares were considered antidilutive for those periods.

The following common share equivalents were excluded from the computation of diluted net loss per common share for the periods presented because including them would have been antidilutive (in thousands):


	Three and Nine Months Ended September 30,
	2025		2024
Stock options		32,292		26,876
Restricted stock units		334		501
Warrants		41,097		—