Lineage Cell Therapeutics, Inc.LCTX

Lineage Cell Therapeutics, Inc. Goodwill & Intangibles Disclosure

10-KFiled Mar 5, 20262 min read

6. Goodwill and Intangible Assets, Net

At December 31, 2025 and December 31, 2024, goodwill and intangible assets, net consisted of the following (in thousands):

 

 

 

December 31, 2025

 

 

December 31, 2024

 

Goodwill (1)

 

$

10,672

 

 

$

10,672

 

 

 

 

 

 

 

 

Intangible assets:

 

 

 

 

 

 

Acquired IPR&D – OPC1 (from the Asterias Merger) (2)

 

$

31,700

 

 

$

31,700

 

Acquired IPR&D – VAC (from the Asterias Merger) (2)

 

 

—

 

 

 

14,840

 

 

 

31,700

 

 

 

46,540

 

Intangible assets subject to amortization:

 

 

 

 

 

 

Acquired patents

 

 

18,953

 

 

 

18,953

 

Acquired royalty contracts (3)

 

 

650

 

 

 

650

 

Accumulated amortization (4)

 

 

(19,603

)

 

 

(19,603

)

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

Intangible assets, net

 

$

31,700

 

 

$

46,540

 

 

(1)
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and liabilities assumed in connection with our acquisition of Asterias Biotherapeutics, Inc. (“Asterias”) in March 2019 (the “Asterias Merger”). The Company conducted a qualitative goodwill assessment for the second quarter of 2025 and took into consideration the impairment of the VAC indefinite-lived intangible asset. After assessing the totality of relevant events and circumstances, there was no impairment to the goodwill carrying value as of June 30, 2025, and through December 31, 2025, the Company has not recognized any goodwill impairment.
(2)
Asterias had two IPR&D intangible assets that were valued at $46.5 million as part of the purchase price allocation that was performed in connection with the Asterias Merger. The fair value of these assets at the acquisition date consisted of $31.7 million pertaining to the OPC1 program and $14.8 million pertaining to the VAC platform. As of June 30, 2025, the VAC platform was deemed to be abandoned. As the Company has abandoned the VAC platform and its related research and development efforts, and the IPR&D asset has no alternative future use, the Company derecognized the intangible asset and recorded a non-cash pre-tax impairment charge during the quarter ending June 30, 2025 of $14.8 million, within total operating expenses of the consolidated statement of operations. See Note 13 (Commitments and Contingencies) for additional information.
(3)
Asterias had royalty cash flows under patent families it acquired from Geron Corporation. Such patent families are expected to continue to generate revenue, are not used in the other acquired IPR&D intangible assets, and are considered to be separate intangible assets under ASC Topic 805, Business Combinations.
(4)
Lineage recognized $22,000 in amortization expense of intangible assets during the three months ended March 31, 2024 and did not recognize any amortization expense in subsequent periods as the acquired patents and acquired royalty contracts were fully amortized as of March 31, 2024.

Historical Timeline

Fiscal YearFiled
2025Mar 5, 2026Showing above
2024Mar 10, 2025
2023Mar 7, 2024
2022Mar 9, 2023
2021Mar 10, 2022
2020Mar 11, 2021
2019Mar 12, 2020
2018Mar 14, 2019
2017Mar 15, 2018
2016Mar 16, 2017
2015Mar 15, 2016

About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.

Other Available Disclosures

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