Company: LCTX
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0000950170-25-036309
Chunk: 76

Company: Lineage Cell Therapeutics, Inc.
Filing Date: 2025-03-10
Form: 10-K
Item: Item 1A
Chunk 76
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 condition, results of operations and cash flows.

Because a portion of our expenses are incurred in currencies other than the U.S. Dollar, our results of operations may be harmed by currency fluctuations. 

Our reporting and functional currency is the United States Dollar, but a material portion of our research and development and other operating expenses are incurred in Israeli New Shekels through our subsidiary CCN. As a result, we are exposed to some currency fluctuation risks. We do not currently manage our foreign currency exposure in a manner that would eliminate the effects of changes in foreign exchange rates. For example, we do not engage in any active hedging techniques, and we do not employ any derivative instruments. Unfavorable fluctuations in the exchange rate between Israeli New Shekels and U.S. dollar may adversely affect our comprehensive loss and cash flows.

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Disruptions at the FDA, SEC and other government agencies, including due to a lack of funding, changes in leadership or significant personnel turnover, could delay or disrupt clinical and preclinical development and potential marketing approval of our product candidates and hinder our ability to raise additional capital.

Twice in the past decade, the previous appropriations legislation deadline was reached and Congress failed to pass a new appropriations bill or continuing resolution to temporarily extend funding, resulting in U.S. government shutdowns that caused federal agencies to halt non-essential operations. The federal government came very close to another shutdown in late 2023. Political polarization among lawmakers may lead to a higher frequency and longer duration of government shutdowns in the future. A federal government shutdown could prevent or delay staff at federal agencies from performing key functions that may adversely affect our business. 

In addition, considerable uncertainty exists regarding how federal government policy and budget decisions will unfold, including the regulatory and spending priorities of the new U.S. presidential administration and Congress, and what challenges potential policy changes and budget reductions will present for us and our industry generally. Government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. The new U.S. presidential administration may institute significant changes to certain federal regulatory agencies including the FDA and SEC, including reductions in funding levels or restructuring of such agencies that could adversely impact us. For example, the ability of the FDA to review and approve new product applications or take action with respect to other regulatory matters can be affected by a variety of factors, including funding levels, ability to accept the payment of user fees, ability to hire and retain key personnel, and statutory, regulatory and policy changes, and