Shareholders’ Equity

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Shareholders’ Equity

10. Shareholders’ Equity

Preferred Shares

Lineage is authorized to issue 2,000,000 preferred shares, no par value. The preferred shares may be issued in one or more series as the Lineage board of directors may determine by resolution. The Lineage board of directors is authorized to fix the number of shares of any series of preferred shares and to determine or alter the rights, preferences, privileges, and restrictions granted to or imposed on the preferred shares as a class, or upon any wholly unissued series of any preferred shares. The Lineage board of directors may, by resolution, increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series of preferred shares subsequent to the issue of shares of that series. As of June 30, 2022 and December 31, 2021, there were no preferred shares issued or outstanding.

Common Shares

Lineage is authorized to issue 250,000,000 common shares, no par value. As of June 30, 2022 and December 31, 2021, there were 169,748,493 and 169,477,347 common shares issued and outstanding, respectively.

At The Market Offering Program

In May 2020, Lineage entered into a Controlled Equity Offering^SM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co., as sales agent (“Cantor Fitzgerald”), pursuant to which Lineage may sell its common shares from time to time through an “at the market offering” (“ATM”) program under the Sales Agreement.

In March 2021, Lineage filed a prospectus supplement with the SEC in connection with the offer and sale of $25.0 million of common shares through the ATM program under the Sales Agreement (“March 2021 Prospectus Supplement”).

In December 2021, Lineage filed a prospectus supplement with the SEC in connection with the offer and sale of up to $64.1 million of common shares (which included $14.1 million of its common shares which then remained unsold under the March 2021 Prospectus Supplement) through the ATM program under the Sales Agreement (“December 2021 Prospectus Supplement”). No further sales will be made under the March 2021 Prospectus Supplement.

As of June 30, 2022, Lineage had sold 108,200 common shares under the December 2021 Prospectus Supplement at a weighted average price per share of $2.55 for gross proceeds of $0.3 million. As of June 30, 2022, $63.8 million remained available for sale under the December 2021 Prospectus Supplement.

The shares offered under the December 2021 Prospectus Supplement are registered pursuant to Lineage’s effective shelf registration statement on Form S-3 (File No. 333-237975), which was filed with the SEC on May 1, 2020 and declared effective on May 8, 2020, and Lineage’s effective shelf registration statement on Form S-3 (File No. 333-254167), which was filed with the SEC on March 5, 2021 and declared effective on March 19, 2021.

Lineage agreed to pay Cantor Fitzgerald a commission of 3.0% of the aggregate gross proceeds from the sale of shares under the Sales Agreement, reimburse its legal fees and disbursements, and provide Cantor Fitzgerald with customary indemnification and contribution rights. The Sales Agreement may be terminated by Cantor Fitzgerald or Lineage at any time upon notice to the other party, or by Cantor Fitzgerald at any time in certain circumstances, including the occurrence of a material and adverse change in Lineage’s business or financial condition that makes it impractical or inadvisable to market the shares or to enforce contracts for the sale of the shares.

Reconciliation of Changes in Shareholders’ Equity

The following tables document the changes in shareholders’ equity for the three and six months ended June 30, 2022 and 2021 (unaudited and in thousands):

	Preferred Shares				Common Shares								Noncontrolling			Accumulated Other			Total
	Number				Number					Accumulated			Interest/			Comprehensive			Shareholders’
	of Shares		Amount		of Shares		Amount			Deficit			(Deficit)			Income/(Loss)			Equity
BALANCE AT DECEMBER 31, 2021		-	$	-		169,477	$	434,529		$	(337,097	)	$	(1,323	)	$	(5,211	)	$	90,898
Shares issued upon vesting of restricted stock units, net of shares retired to pay employees’ taxes		-		-		10		(8	)		-			-			-			(8	)
Shares issued upon exercise of stock options		-		-		240		189			-			-			-			189
Subsidiary warrant exercise		-		-		-		2			-			-			-			2
Stock-based compensation		-		-		-		1,106			-			-			-			1,106
Foreign currency translation gain		-		-		-		-			-			-			124			124
NET LOSS		-		-		-		-			(7,087	)		(6	)		-			(7,093	)
BALANCE AT MARCH 31, 2022		-	$	-		169,727	$	435,818		$	(344,184	)	$	(1,329	)	$	(5,087	)	$	85,218
Shares issued upon vesting of restricted stock units, net of shares retired to pay employees’ taxes		-		-		10		(9	)		-			-			-			(9	)
Shares issued upon exercise of stock options		-		-		11		10			-			-			-			10
Subsidiary warrant exercise, net		-		-		-		97			-			-			-			97
Stock-based compensation		-		-		-		1,235			-			-			-			1,235
Foreign currency translation gain		-		-		-		-			-			-			1,730			1,730
NET LOSS		-		-		-		-			(6,763	)		(19	)		-			(6,782	)
BALANCE AT JUNE 30, 2022		-	$	-		169,748	$	437,151		$	(350,947	)	$	(1,348	)	$	(3,357	)	$	81,499

	Preferred Shares				Common Shares								Noncontrolling			Accumulated Other			Total
	Number				Number					Accumulated			Interest/			Comprehensive			Shareholders’
	of Shares		Amount		of Shares		Amount			Deficit			(Deficit)			Income/(Loss)			Equity
BALANCE AT DECEMBER 31, 2020		-	$	-		153,096	$	393,944		$	(294,078	)	$	(1,072	)	$	(3,667	)	$	95,127
Shares issued through ATM		-		-		7,941		19,008			-			-			-			19,008
Shares issued for services		-		-		78		202			-			-			-			202
Shares issued upon vesting of restricted stock units, net of shares retired to pay employees’ taxes		-		-		10		(12	)		-			-			-			(12	)
Shares issued upon exercise of stock options		-		-		942		1,751												1,751
Financing related fees		-		-		-		(173	)		-			-			-			(173	)
Stock-based compensation		-		-		-		539			-			-			-			539
Foreign currency translation gain		-		-		-		-			-			-			1,576			1,576
NET LOSS		-		-		-		-			(1,416	)		(32	)		-			(1,448	)
BALANCE AT MARCH 31, 2021		-	$	-		162,067	$	415,259		$	(295,494	)	$	(1,104	)	$	(2,091	)	$	116,570
Shares issued through ATM		-		-		2,824		7,874			-			-			-			7,874
Shares issued upon vesting of restricted stock units, net of shares retired to pay employees’ taxes		-		-		10		(15	)		-			-			-			(15	)
Shares issued upon exercise of stock options		-		-		2,116		4,033												4,033
Financing related fees		-		-		-		(26	)		-			-			-			(26	)
Stock-based compensation		-		-		-		919			-			-			-			919
Shares issued for retirement of stock warrants		-		-		20		2			-			-			-			2
Foreign currency translation gain		-		-		-		-			-			-			(960	)		(960	)
NET LOSS		-		-		-		-			(4,788	)		(8	)		-			(4,796	)
BALANCE AT JUNE 30, 2021		-	$	-		167,037	$	428,046		$	(300,282	)	$	(1,112	)	$	(3,051	)	$	123,601

Warrants

Cell Cure Warrants – Liability Classified

In July 2017, Cell Cure issued to HBL a warrant to purchase 24,566 ordinary shares at an exercise price of $40.54 per share which expire in July 2022. In March 2022, HBL was issued 50 shares following its cash exercise for those shares, and an additional 50 shares were transacted as a net exercise. In April 2022, HBL was issued 2,467 shares followings its cash exercise for those shares. In July 2022, HBL cash exercised the remaining outstanding warrant to purchase 21,999 shares (see Note 15 (Subsequent Events) for additional information).

An additional warrant to purchase 2,000 ordinary shares issued to Cell Cure consultants is outstanding as of June 30, 2022, the warrant has an exercise price of $40.00 which expire in January 2024.