Company: LCTX
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0000950170-25-036309
Chunk: 235

Company: Lineage Cell Therapeutics, Inc.
Filing Date: 2025-03-10
Form: 10-K
Item: Item 7
Chunk 235
---
 are recorded in the consolidated statements of operations and we expect this fair value to fluctuate each reporting period. For the year ended December 31, 2024, the Company recorded a $2.1 million change in the fair value of the warrants. There was no comparable change recorded in 2023.

Foreign currency transaction loss, net. Foreign currency transaction loss, net, for each of the years ended December 31, 2024 and 2023 consisted of net foreign currency transaction gains and losses primarily recognized by our subsidiaries CCN and ES Cell International Pte. Ltd. (“ESI”). The functional currency of CCN and ESI is the Israeli New Shekel (“ILS”) and the Singapore Dollar (“SGD”), respectively. For the years ended December 31, 2024 and 2023, the net foreign currency transaction losses were $0.3 million and $0.5 million, respectively. The majority of the net foreign currency transaction losses were generated by CCN’s intercompany notes payable and notes receivable with Lineage, which is U.S. dollar-denominated. The year-over-year net decrease in foreign currency transaction losses was the result of the combined impact of: (i) changes in intercompany balances in 2024 as compared to 2023, and (ii) volatility of the ILS and SGD as compared to the U.S. dollar during 2024 and 2023. 

88

Other income (expenses), net. For the year ended December 31, 2024, the Company recorded $0.7 million related to the allocated transaction costs for warrants issued in connection with the November 2024 registered direct offering. No comparable expense was recorded in the prior year. For the year ended December 31, 2023, the Company recorded an employee retention credit of $0.5 million, and no comparable credit was recorded in 2024. The employee retention credit is a payroll tax refund per employee, under the Coronavirus Aid, Relief, and Economic Security Act which was designed by the U.S. Treasury Department to assist businesses that retained employees during the COVID pandemic. The Company qualified for this credit due to a decline in the quarterly revenue during 2020 and 2021 as compared to the same quarterly period in 2019.

Income Taxes

Under ASC 740, Income Taxes, a valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. We established a full valuation allowance as of December