Filed 2026-03-26 · Period ending 2024-12-31 · 93,926 words · SEC EDGAR
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# Orgenesis Inc. (ORGS) — 10-K **Filed:** 2026-03-26 **Period ending:** 2024-12-31 **Accession:** 0001493152-26-012845 **Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1460602/000149315226012845/) **Origin leaf:** da464f47bcf769e0a73dd8666065593675e9f87ab90cd4046288cadd159995cc **Words:** 93,926 --- ** ** **UNITED STATES** **SECURITIES AND EXCHANGE COMMISSION** **Washington, D.C. 20549** **FORM 10-K** (Mark One) ** ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** For the fiscal year ended **December 31, 2024** or **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** For the transition period from __________________________ to __________________________ Commission file number **001-38416** * **ORGENESIS INC.** (Exact name of registrant as specified in its charter) | Nevada | | 98-0583166 | | | State or other jurisdiction | | (I.R.S. Employer | | | of incorporation or organization | | Identification No.) | | **** **20271 Goldenrod Lane, Germantown, MD 20876** (Address of Principal Executive Offices) (Zip Code) Registrants telephone number, including area code: **(480) 659-6404** Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: | Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered | | | Common Stock, par value $0.0001 per share | | ORGS | | OTC Expert Market* | | * On October 17, 2024, the Nasdaq Stock Market (Nasdaq) notified Orgenesis Inc. (the Company) that it planned to file a notification of removal from listing (Form 25) with the Securities and Exchange Commission (the SEC) to delist the Companys common stock from Nasdaq upon the completion of all applicable procedures. Nasdaq filed the Form 25 on May 8, 2025. The deregistration of the Companys common stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), occurred 90 days following the filing of the Form 25. Upon deregistration of the Companys common stock under Section 12(b) of the Exchange Act, the Companys common stock remained registered under Section 12(g) of the Exchange Act. The Companys common stock began trading on the OTCQX operated by the OTC Markets Group, Inc. (OTC Markets) beginning on October 21, 2024. On June 3, 2025, OTC Markets moved the Companys common stock from OTCQX to the Pink Limited tier. On July 29, 2025, OTC Markets moved the Companys common stock from Pink Limited to the OTC Expert Market tier. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No **** Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No **** Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No **** Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes **** No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act. | Large accelerated filer | Accelerated filer | | | Non-accelerated filer | Smaller reporting company | | | Emerging growth company | | | If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b). Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No **** The aggregate market value of the common stock held by non-affiliates of the registrant as of the last business day of the registrants most recently completed second fiscal quarter (June 30, 2024) was $7,649,760, as computed by reference to the closing price of such common stock on the Nasdaq Capital Market on such date. The registrant had 9,799,538 shares of common stock outstanding as of March 26, 2026. **DOCUMENTS INCORPORATED BY REFERENCE** None. | | | **** **ORGENESIS INC.** **2024 FORM 10-K ANNUAL REPORT** **TABLE OF CONTENTS** **** | | Page | | | PART I | | | | | | | | ITEM 1. BUSINESS | 5 | | | | | | | ITEM 1A. RISK FACTORS | 23 | | | | | | | ITEM 1B. UNRESOLVED STAFF COMMENTS | 48 | | | | | | | ITEM 1C. CYBERSECURITY | 48 | | | | | | | ITEM 2. PROPERTIES | 50 | | | | | | | ITEM 3. LEGAL PROCEEDINGS | 51 | | | | | | | ITEM 4. MINE SAFETY DISCLOSURES | 51 | | | | | | | PART II | | | | | | | | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 51 | | | | | | | ITEM 6. [RESERVED] | 53 | | | | | | | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 53 | | | | | | | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 68 | | | | | | | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | 68 | | | | | | | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE | 68 | | | | | | | ITEM 9A. CONTROLS AND PROCEDURES | 69 | | | | | | | ITEM 9B. OTHER INFORMATION | 70 | | | | | | | ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | 70 | | | | | | | PART III | | | | | | | | ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | 71 | | | | | | | ITEM 11. EXECUTIVE COMPENSATION | 75 | | | | | | | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 81 | | | | | | | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE | 84 | | | | | | | ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES | 84 | | | | | | | PART IV | | | | | | | | ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | 85 | | | | | | | ITEM 16. FORM 10-K SUMMARY | 88 | | | | | | | SIGNATURES | 89 | | **** | 2 | | **** **SPECIAL CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS** The following discussion should be read in conjunction with the financial statements and related notes contained elsewhere in this Annual Report on Form 10-K. Certain statements made in this discussion are forward-looking statements within the meaning of 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based upon beliefs of, and information currently available to, the Companys management as well as estimates and assumptions made by the Companys management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used herein, the words anticipate, believe, estimate, expect, forecast, future, intend, plan, predict, project, target, potential, will, would, could, should, continue or the negative of these terms and similar expressions as they relate to the Company or the Companys management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Companys business, industry, and the Companys operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results. Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report. Unless otherwise indicated or the context requires otherwise, the words we, us, our, the Company, our Company or Orgenesis refer to Orgenesis Inc., a Nevada corporation, and our majority or wholly-owned subsidiaries: Orgenesis Belgium SRL, a Belgian-based entity (the Belgian Subsidiary); Orgenesis Ltd., an Israeli corporation (the Israeli Subsidiary); Orgenesis Switzerland Sarl, (the Swiss Subsidiary); Koligo Therapeutics Inc., a Kentucky corporation (Koligo); Orgenesis CA, Inc. (the California Subsidiary); Mida Biotech BV (Mida); Orgenesis Italy SRL (the Italian Subsidiary), Orgenesis Austria GmbH, an Austrian corporation (Orgenesis Austria), Octomera LLC, a Delaware entity (Octomera) and its wholly or majority owned subsidiaries, Orgenesis Korea Co. Ltd., a Korean based entity; Orgenesis Services SRL, a Belgian-based entity; Orgenesis Maryland LLC a Maryland entity; Orgenesis Biotech Israel Ltd. (OBI), an Israeli entity; Tissue Genesis International LLC (Tissue Genesis) a Texas limited liability company; Orgenesis Germany GmbH, a German entity; Orgs POC CA Inc, a Californian entity; Orgenesis Australia PTY LTD an Australian entity, Theracell Laboratories IKE (Theracell Laboratories), a Greek company, and OCTO Services LLC, a Delaware limited liability company. Forward-looking statements made in this Annual Report on Form 10-K include statements about: Corporate and Financial* ** | | our ability to service our operations and expenses and other liquidity needs and to address our ability to continue as a going concern; | | | | our ability to generate revenue from the commercialization of our point-of-care cell therapy (POCare) to reach patients and to increase such revenues; | | | | our ability to achieve profitability; | | | | our ability to manage our research and development programs that are based on novel technologies; | | | | our ability to grow the size and capabilities of our organization through further collaboration and strategic alliances to expand our point-of-care cell therapy business; | | | 3 | | | | our ability to control key elements relating to the development and commercialization of therapeutic product candidates with third parties; | | | | our ability to manage potential disruptions as a result of the continued impact of the coronavirus outbreak; | | | | our ability to manage the growth of our company; | | | | our ability to attract and retain key scientific or management personnel and to expand our management team; | | | | the accuracy of estimates regarding expenses, future revenue, capital requirements, profitability, and needs for additional financing; and | | | | our belief that our therapeutic related developments have competitive advantages and can compete favorably and profitably in the cell and gene therapy industry. | | *Cell & Gene Therapy Business (CGT)* | | our ability to adequately fund and scale our various collaboration, license, partnership and joint venture agreements for the development of therapeutic products and technologies; | | | | our ability to advance our therapeutic collaborations in terms of industrial development, clinical development, regulatory challenges, commercial partners and manufacturing availability; | | | | our ability to implement our POCare strategy in order to further develop and advance autologous therapies to reach patients; | | | | expectations regarding our ability to obtain and maintain existing intellectual property protection for our technologies and therapies; | | | | our ability to commercialize products in light of the intellectual property rights of others; | | | | our ability to obtain funding necessary to start and complete such clinical trials; | | | | our ability to further our CGT development projects, either directly or through our JV partner agreements, and to fulfill our obligations under such agreements; | | | | our belief that our systems and therapies are as at least as safe and as effective as other options; | | | | our relationship with Tel Hashomer Medical Research Infrastructure and Services Ltd. (THM) and the growing risk that THM may cancel or, at the very least continue to challenge, the License Agreement with the Israeli Subsidiary; | | | | the outcome of certain legal proceedings that we are or may become involved in; | | | | our license agreements with other institutions; | | | | expenditures not resulting in commercially successful products; | | | | our dependence on the financial results of our POCare business; | | | | our ability to generate sufficient revenue from our POCare services and grow our POCare business and to develop additional joint venture relationships in order to produce demonstrable revenues. | | These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled Risk Factors set forth in this Annual Report on Form 10-K for the year ended December 31, 2024, any of which may cause our Companys or our industrys actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks may cause the Companys or its industrys actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The Company is under no duty to update any forward-looking statements after the date of this report to conform these statements to actual results. | 4 | | **** PART I ITEM 1. BUSINESS (All monetary amounts are expressed in thousands of US dollars (unless stated otherwise), except for share and loss per share amounts.) On September 20, 2024, the Company implemented a 1-for-10 reverse stock split (the Reverse Split) of its authorized and outstanding shares of Common Stock. All share and per share amounts in these financial statements have been retroactively adjusted to reflect the Reverse Split as if it had been effected prior to the earliest financial statement period included herein. **Business Overview** We are a global biotech company working to unlock the promise of cell and gene therapies (CGTs) in an affordable and accessible offering. CGTs can use the patients own cells (autologous), or use donor cells (allogeneic), and, for regulatory purposes, are classified as Advanced Therapy Medicinal Products (ATMPs). We are primarily focused on pioneering a paradigm-shifting decentralized approach to CGT therapies utilizing an automated and/or closed approach validated for compliant production at or near the patient care site (Decentralized Cell Processing or DCP Platform). This approach has the potential to overcome the limitations of traditional centralized processing methods due to their complex logistics and inefficient unscalable processing methods leading to cost prohibitive products that currently limit the number of patients that can have access to these therapies. **Advanced Therapy Medicinal Products and POCare Overview** ATMP means one of any of the following medicinal products that are developed and commercialized for human use: | | A somatic cell therapy medicinal product (STMP) that contains cells or tissues that have been manipulated to change their biological characteristics or cells or tissues not intended to be used for the same essential functions in the body; | | | | A tissue engineered product (TEP) that contains cells or tissues that have been modified so that they can be used to repair, regenerate, or replace human tissue; or | | | | A gene therapy medicinal product (GTMP) that engineers genes that lead to a therapeutic, prophylactic, or diagnostic effect and, in many cases, work by inserting recombinant genes into the body, usually to treat a variety of diseases, including genetic disorders, cancer, or long-term diseases. In this case, a recombinant gene is a stretch of DNA that is created in the laboratory, bringing together DNA from different sources. | | It is important to note that, although STMPs and GTMPs currently dominate the market, in order to access the market potential and trends in the future, other cell products are likely to be essential in all of these categories. We believe that autologous therapies represent a substantial segment of the ATMP market. Autologous therapies are produced from a patients own cells versus allogeneic therapies that are mass-cultivated from donor cells via the construction of master and working cell banks and are then produced on a large scale. Developers and manufacturers of ATMPs (both autologous and allogeneic) currently rely heavily on production using traditional centralized supply chains and manufacturing sites. CGTs are costly and complex to produce. We also refer to CGTs as living drugs since they are based on maintaining the cells vitality. Therefore, there is no possibility to sterilize the products, since such a process involves killing any living organism. Many of these therapies require sourcing of the patients cells, engineering them in a sterile environment and then transplanting them back to the patient (so-called autologous CGT). This presents multiple logistic challenges as each patient requires their own production batch, and the current processes involve complex laboratory-based types of manipulations requiring highly trained lab technicians. To overcome these challenges, we have designed and implemented our DCP Platform - a scalable hub and spoke infrastructure of analytical centers overseeing standardized production platforms, technology and services governed by a central quality system, focusing on replicability and standardization of infrastructure and equipment with centralized monitoring and data management. Features of the DCP Platform include a locally implemented quality system, Standard Operating Procedures (SOPs), Good Manufacturing Practices (GMP), training procedures, quality-control testing and hub oversight of the actual production. We are leveraging our unique approach to therapy production using our DCP Platform and various manufacturing platforms to address some of the quality, supply chain, scale-up and production challenges, adapting these therapies to validated manufacturing platforms that are adapted to standardized production units that can be placed quickly and a low cost throughout our DCP network. | 5 | | Our activity is based on partnerships with hospital, research centers and leading centers of excellence for the supply of products. Partnerships include both developing or adapting potential cell and gene therapies to the platform and providing our own standardized production platforms on a commercial basis. Over the past year, we have focused on validating advanced production platforms for various cell types. These platforms are designed to deliver high-quality, regulatory-compliant cell and gene therapies through a decentralized, automated, and scalable approach, significantly reducing costs and time-to-market. With integrated quality control and regulatory compliance features, they ensure the highest standards of safety and efficacy, enabling faster and more efficient delivery of CGT treatments to patients. We are working to commercialize these platforms by targeting healthcare institutions and industry partners. Our business strategy includes out-licensing, related services and shared revenue opportunities. Our production platforms, either developed in-house or acquired, includes the following: | | 1. | Pancreatic Islets: The FDA-cleared Koligo platform, with over 80 patients treated at hospitals across the US. | | | | 2. | Chimeric Antigen Receptor T-cells (CAR-T): The CAR-T8-TOR platform: Over 200 patients have been treated utilizing this platform in Asia. | | | | 3. | Stromal Vascular Fraction (SVF) - Icellator2 platform: Over 70 patients treated in the USA in FDA-approved clinical trials, and over 1,750 patients treated in the rest of the world in eleven indications. | | | | 4. | MSC Oncolytic virus - TROJAN Platform: 16 pediatric and adult patients with relapsed or refractory solid tumors in Europe. | | | | 5. | Tumor-infiltrating lymphocytes (TILs) - LYMVADOR platform: Approved for clinical trials in Israel. | | | | 6. | Hematopoietic stem cells (HSCs) - HEMOSTART platform which may be eligible for EU support covering the cost of clinical trials. | | | | 7. | Dendritic vaccines IdenTT platform | | | | 8. | Induced Pluripotent Stem Cells (iPSc) Mida platform | | | | 9. | Exosomes production platform | | Furthermore, we are expanding our pipeline of innovative therapies specifically designed to optimize and align with our production platforms. We believe that DCP platform addresses many of the challenges facing the supply of CGT, such as production capacity, logistics and efficient availability. The platforms target significantly lower production costs and potentially allow us to make progress toward our vision of improved access and outcomes in healthcare. ** **CGT market overview** The global CGT market is growing at a rapid pace with 1894 active clinical trials (ARM 2024 State of the Industry Briefing H1). 2023 was a breakthrough year for CGT. Seven CGTs were approved by the FDA in 2023, with 11+ decisions expected in 2024 (ARM 2024 State of the Industry Briefing H1). Several biotech companies developing CGTs have been acquired by large pharma (Gilead Sciences acquired Kite Pharma for $11.9 billion, Roche acquired Spark Therapeutics for $4.8 billion and Bayer acquired AskBio for $2 billion upfront and up to $2 billion in success-based milestone payments) before generating their first revenues. 2023 and 2024 brought more significant interest from large pharma and large biotech with Roche leading the way signing a definitive agreement to acquire Poseida Therapeutics for $1.5B with the lead program being an allogenic CAR-T, AstraZeneca acquired China-based CAR-T company Gracell Biotechnologies for $1B up-front, and investing $245M in Cellectis; other significant deals include Eli Lilly acquiring Sigilon Therapeutics for $345M+ and BioNTech agreeing to invest $200M into Autolus for access to their CAR-T programs. According to the 2023 Pharma R&D annual review by Informa, there are 21,292 drugs or therapies in development and roughly 19.4% are CGTs (4,132), this is up from 2020 when McKinsey & Company reported CGT products accounted for 12% of the industrys clinical and 16% of the preclinical pipeline. | 6 | | This is a relatively new field, developing quickly in the last decade. The initial development of these therapies began at clinical research centers, based on attempts of researchers and clinicians to incorporate the scientific knowledge that accumulated from the biotechnology industry, including advancements in genetic engineering of cells, cell sourcing, tissue engineering and the medical advancements of immunology. In the early years of development, it was not even clear if such therapies would be considered a clinical treatment (such as a bone marrow transplant) or drug product such as a recombinant protein. In the last decade there has been much development in the regulatory framework required to bring such products to market, but still there is vagueness in some markets and unique regulatory pathways such as the legal framework in the EU for hospital exemption allowing hospitals who wish to provide such therapies to their patients to take responsibility for treating patients, and still a major portion of products are supplied directly by hospitals to patients utilizing clinical trials and unique regulatory pathways. Though the biotech industry has embraced this new modality of drug development, they face many challenges. The pharma and biotech companies are used to centralized production and providing shelf products that can be stored and made available on demand. Their development and production teams are eager to fit these therapies into the existing well-known paradigms. This has proven to be extremely challenging, and the result has been approvals of products such as CAR-Ts for blood cancers and products for treatment of genetic diseases costing hundreds of thousands of dollars, or even over two million dollars per patient. The capacity to produce such products is limited and, though they are considered a breakthrough in terms of clinical results, the high cost has severely restricted market adoption. While the biotech industry struggles to determine the best way to lower costs of goods and enable CGTs to scale, the scientific community continues to advance and push the development of such therapies to new heights. Clinicians and researchers are excited by all the new tools such as new generations of industrial viruses, big data analysis for genetic and molecular data and technologies including CRISPR, mRNA, etc. available, often at a low cost, to perform advanced research in small labs. Most new therapies arise from academic institutes or small spinouts from such institutes. Though such research efforts may manage to progress into a clinical stage, utilizing lab based or hospital-based production solutions, they lack the resources to continue the development of such drugs to market approval. Historically, drug/therapeutic development has required investments of hundreds of millions of dollars to be successful. One significant cause for the high cost is that each therapy often requires unique production facilities and technologies that must be subcontracted or designed and built based on expensive subcontracting serves. Further, the cost of production during the clinical stage is extremely expensive. Given these financial restraints, researchers and institutes hope to out- license their therapeutic products to large biotech companies or spin-out new companies which is usually an option at a de-risked stage. **Orgenesis subsidiaries** **** The following is a description of our subsidiaries, all of which are wholly owned, and their area of expertise: | | Koligo Therapeutics, Inc., a Kentucky corporation, which is a regenerative medicine company, specializing in developing personalized cell therapies. It is currently focused on commercializing its metabolic pipeline via the POCare Network throughout the United States and in international markets. | | | | | | | | Orgenesis CA, Inc. a Delaware corporation, which is currently focused on development of our technologies and therapies in California. | | | | | | | | Orgenesis Switzerland Sarl, which is currently focused on providing group management services. | | | | | | | | MIDA Biotech BV, which is currently focused on research and development activities, was granted a 4 million Euro grant under the European Innovation Council Pathfinder Challenge Program which supports cutting-edge science and technology. The grant is for technologies enabling the production of autologous induced pluripotent stem cells (iPSCs) using microfluidic technologies and artificial intelligence (AI). | | | | | | | | Orgenesis Italy SRL which is currently focused on R&D activities. | | | | | | | | Orgenesis Ltd., an Israeli subsidiary which was focused on R&D and was a provider of R&D management services for out licenced products. (Declared bankrupt by Israeli district court in August 2025. | | **** | 7 | | | | Orgenesis Austria GmbH, which is currently focused on the development of the Companys technologies and therapies. | | | | | | | | Octomera LLC, a Delaware corporation, which specializes in providing processing services within the Orgenesis group and to third party customers. Octomeras current operating subsidiaries, all of which are wholly owned, are: | | | | | | | | Orgenesis Maryland LLC, which is the center of POCare Services activity in North America and is currently focused on setting up and providing POCare Services and cell-processing services to the POCare Network. | | | | | | | | Tissue Genesis International LLC, a Texas limited liability company currently focused on development of our technologies and therapies. | | | | | | | | Orgenesis Germany GmbH, a German entity. | | | | | | | | Theracell Laboratories IKE (Theracell Labs), a Greek company currently focused on expanding our POCare Network. | | | | | | | | ORGS POC CA Inc, which is currently focussed on expanding our POCare Network in California. | | | | | | | | Octo Services LLC, a Delaware entity. | | During 2024, liquidation activities at the following subsidiaries commenced (See note 20): | | | Orgenesis Korea Co. Ltd | | | | | Orgenesis Biotech Israel Ltd | | | | | Orgenesis Australia PTY LTD | | | | | Orgenesis Belgium SRL | | | | | Orgenesis Services SRL | | | 8 | | **** **Therapies in Development** Subject to obtaining sufficient capital, we are attempting to advance a diverse pipeline of cell and gene therapies, consisting of investigational treatments and next-generation technologies aimed at addressing cancer and other unmet clinical needs. Central to this pipeline are personalized autologous cell therapies, where cells are derived from the patients own body, significantly minimizing the risk of immune rejection. Our Advanced Therapy Medicinal Products (ATMPs) are developed through a combination of proprietary research, strategic joint ventures, and in-licensing agreements with biotech companies and leading research institutions. These therapies have been specifically adapted and validated to integrate seamlessly with our advanced production platforms, ensuring efficient manufacturing and delivery. **** The following table summarizes the therapies that are included in our future development plans, which are discussed in detail below: | Therapy | | Development Stage | | Indication | | | Immuno-Oncology | | | | | | | | | | | | | | HiCAR-T | | Hospital exemption/ | | B-ALL, B-cell Lymphoma | | | | | IND enabling studies | | | | | T-LOOP | | IND enabling studies | | Solid Tumors | | | MDVAC | | IND enabling studies | | Solid Tumors | | | Intra Nasal Delivery of Cell based Immunotherapy | | Pre-clinical | | Drug delivery technology, Glioblastoma | | | | | | | | | | Metabolic Diseases | | | | | | | | | | | | | | KYSLECEL | | Clinical use | | TP-IAT | | | CellFix | | Clinical use | | Cartilage Defects | | | AutoSVF | | Clinical development | | Systemic ARDS, vascular disorders | | | | | | | | | | Anti-Viral | | | | | | | | | | | | | | Autovac | | Pre-clinical | | Autologous viral vaccine | | Immuno-Oncology *HiCAR-T (CD 19)* Chimeric antigen receptor T cells (CAR-T cells) are genetically engineered T-cells designed for cancer immunotherapy. They are modified to produce artificial T-cell receptors (CARs) that recognize and target cancer cells. CAR-T cells can be derived either from a patients own blood (autologous) or from a healthy donor (allogeneic). The process involves harvesting T cells, genetically engineering them to express a CAR targeting specific tumor antigens and infusing them back into the patient. These engineered T cells act as a living drug that binds to cancer cells upon encountering their target antigen, activating them to proliferate and destroy the tumor. We are developing an advanced anti-CD19 CAR-T therapy for the treatment of B-cell Acute Lymphoblastic Leukemia (ALL) and other B-cell lymphomas. This therapy leverages a novel processing technology that enables rapid delivery at a significantly reduced cost. This year, we reported promising real-world clinical data from 233 patients in Asia with CD19+ Acute Lymphoblastic Leukemia (B-cell ALL), showcasing the performance of our CAR-T CD19 therapy. The study highlights its strong safety profile, efficacy, and cost-effectiveness compared to existing treatments. | 9 | | **** **Key Real-World Clinical Outcomes of the Therapy:** **** | | | Efficacy: The therapy demonstrated outstanding complete response (CR) rates, achieving 82% in adults and 93% in pediatric patients, underscoring its effectiveness across age groups. | | | | | Safety: Severe Cytokine Release Syndrome (CRS) occurred in only 2% of adult patients and 6% of pediatric patients, reflecting a significant safety advantage over conventional CAR-T therapies. | | We believe that these compelling findings support the broader potential of the therapy in treating B-cell ALL, B-cell lymphomas, and other related conditions. In addition to its clinical performance, the cost-effectiveness of our therapy is further enhanced by our DCP platform. This platform reduces CAR-T production costs from $152,500 to $41,750 per batcha 73% reduction compared to traditional centralized manufacturing (see graph below). These advancements make our therapy not only clinically superior but also economically accessible, broadening its potential to transform the treatment landscape for B-cell ALL, B-cell lymphomas, and other related conditions. CAR-T Centralized versus Decentralized Production (DCP) * *Management estimates based on internal costing of development batches; Hodgson et. al., Cellares Cost-Benefit, 2023 Analysis T-LOOP (Tumor Infiltrating Lymphocytes (TIL)* TIL therapy is a clinically validated personalized cancer treatment based on infusion of autologous TILs expanded ex vivo from tumors. Once expanded, the TILs are infused back into the patient where they attack the cancer cells with a high degree of specificity. We have developed a GMP-compliant, reproducible and efficient production approach that is performed in a fully closed system enabling the generation of functional TILs from various solid tumor biopsies. The expanded TILs lead to a more robust therapeutic response especially for solid tumors such as lung cancer. We have received approval from the Israeli Ministry of Health to conduct clinical research, marking an important milestone in advancing our TILs (Tumor-Infiltrating Lymphocytes) therapy development. *MDVAC* ** MDVAC (Dual Vaccine Cell-Based Cancer Immunotherapy) is a novel cell-based immunotherapy licensed from Columbia University, designed to target a wide range of solid tumors. It consists of two pre-activated antigen-presenting cells (APCs)dendritic cells (DCs) and macrophagesloaded with allogeneic whole cancer cell lines, thereby maximizing the repertoire of cancer antigen presentation. MDVAC leverages the immune systems natural ability to recognize and respond to cancer neo-antigens, enhancing the efficacy of cancer immunotherapy. The parallel presentation of cancer antigens promotes improved immune education and enhances the immune systems ability to recognize tumors, leading to tumor growth arrest and reduced metastasis. | 10 | | Metabolic Diseases *KYSLECEL (Autologous Pancreatic Islets)* ** The patients own pancreatic islets, comprised of the cells that secrete insulin to regulate blood sugar, form KYSLECEL, a minimally manipulated autologous cell-based product produced according to current good tissue practices (cGTP). The therapy has been allowed by the U.S. Food and Drug Administration (FDA) and is available in the US. The target population of KYSLECEL, as an islet autologous transplant after total pancreatectomy (TP-IAT), is chronic or acute recurrent pancreatitis patients who are in need of insulin secretory capacity preservation. Anti viral *Autovac* AutoVac is an autologous, pan-antigenic cell-based vaccine platform designed to combat viral infections through the ex vivo induction of immune responses. Utilizing specific target antigens, AutoVac enables a rapid and adaptable response during viral outbreaks. As part of our initial proof of concept, we are focusing on validating this novel vaccine platform against Coronavirus Disease 2019 (COVID-19). Preliminary in vitro findings demonstrated successful immune cell activation correlating with antigen expression, confirming its immunogenic potential. Further testing against additional viral pathogens has validated the platforms specificity, robustness, and versatility. This year, we expanded our research to explore additional viral targets, including Zika virus, further demonstrating AutoVacs potential to address a wide range of viral threats. *Strategic CGT Therapeutics Collaborations* **** Collaborations, partnerships, joint ventures and license agreements are key components of our POCare strategy. Our POCare technology collaborators and partners include Columbia University in the City of New York, , UC Davis, For more information, see note 12, Collaboration and Licensing Agreements of the Notes to the Financial Statements included in Item 8 of this Annual Report on Form 10-K. ** **Current Development and processing facilities** Koligo Koligo has closed down its commercial production facilities for KYSLECEL at an FDA-registered establishment in Indiana. Koligo is currently focusing on upgrading its production to modular units and identifying additional locations. Mida Mida specializes in developing and validating proprietary and licensed advanced cell and gene therapies such IPS based therapies and AI in its development labs in the Netherlands. Tissue Genesis International The Tissue Genesis Icellator is used to isolate stromal and vascular fraction cells (SVF) from a patients own (autologous) adipose tissue (fat). The Tissue Genesis Icellators, associated disposable kits, and our proprietary enzyme Adipase, are made by contract manufacturers and warehoused at our ISO 13485-certified and FDA-registered facility in Texas. From this facility we fill orders for our customers all around the world and maintain research and development labs to support continued product development. | 11 | | Tissue Genesis International (TGI) has expanded its development pipeline from the Icellator to additional systems for automation of Cell and Gene Therapy and incorporation of these various platforms into the Decentralized Production Units. On the Icellator front, in 2024 TGI continued to service our existing customers both domestically and abroad, added new customers, increased revenue from sales, extended shelf-life of existing Icellator inventory, continued Adipase development, and engaged in production of a new lot of disposables. TGI includes the integration of our development projects, foremost among them the Control Tower for automation of cGMP cell and gene therapy inside Decentralized Production Units. In 2024 TGI brought this project into the ISO quality system and engaged with contract engineering firms with the requisite experience and that meet our stringent quality assurance standards. Theracell Laboratories Theracell Laboratories, located in Greece, specializes on developing and processing innovative cell therapies for our customers. It was designated as a Priority Investment of Strategic National Importance by Enterprise Greece, the official Greek national investment and trade promotion agency, which is responsible for the allocation of Greek government funding. As a result of this designation, Theracell will be inducted into Greeces fast-track licensing and approval process. This is expected to help advance development and clinical use of our CGT, subject to regulatory requirements. ** **Services offered by Octomera** The services that Octomera offers include: | | Development, adaptation, and optimization of therapy production processes within decentralized production platforms, including bio-isolators, prefabricated clean rooms. | | | | Adaptation of automation and closed systems to serviced therapies. | | | | Incorporation of the serviced therapies compliant with GMP in the Decentralized Production Units that we designed and built. | | | | Tech transfers and training of local teams for the serviced therapies. | | | | Processing and supply of the therapies and required supplies under GMP conditions within our DCP including required quality control testing; and | | The processing services are performed throughout our decentralized hubs that provide harmonized and standardized services to customers. We believe this approach is in line with current regulatory guidelines regarding decentralized production and provides an efficient and scalable pathway for CGT therapies to reach patients rapidly at lowered costs. Our Services are designed to allow rapid capacity expansion while integrating new technologies to bring together patients, doctors and industry partners with a goal of achieving standardized, regulated clinical development and production of therapies. | 12 | | Integration of Custom Fit Solutions within the POCare Center * Our aim is to provide a pathway to bring ATMPs in the cell and gene therapy industry from research to patients worldwide through our POCare Platform. We define point of care as a process of collecting, processing, and administering cells as close as possible to the clinical setting. We believe that this approach is an attractive proposition for CGT during the clinical development stage and even more so upon market approval therapies. This will potentially help to minimize or eliminate the need for cell transportation, which is a high-risk and costly aspect of the supply chain, further allowing flexible production and patient treatment and reduce the cost and lengthy timelines associated with building additional clean rooms and complex tech transfers between production sites. We believe that the existing industry paradigm in which each therapy developer invests in setting up unique infrastructure such as specialized clean rooms and production facilities is inefficient. The cost of construction, regulatory authorization and maintenance of these facilities is not only prohibitive but extremely difficult and lengthy to replicate, allowing no economies of scale. We have based the design of our POCare Platform on the concept of standardizing infrastructure by providing flexible building blocks through the POCare Centers, Decentralized Production Platforms, which allows for quick expansion at multiple locations. Global Harmonization: The POCare Platform overcomes conventional processing challenges by enabling high quality standards and sterile, scalable onsite processing of CGTs orchestrated by the POCare Centers to service local hospitals. Processing infrastructure is harmonized and reproducible using our platform. The use of our platform can shorten implementation time from approximately 18-24 months to approximately 3-9 months, offers a more cost-effective environment and enables local scalability by connecting additional Decentralized Production Units. The network structure is supported and connected by the centralization of the harmonized best industry practices and standards to meet the highest quality standards (QMS, Quality Management System). Further global harmonization is implemented through standardization of the training programs, centralized data management and a unified supply chain. Integrated closed and automated processing systems require fewer full-time employees (FTEs) to produce GMP batches, resulting in lower cost of goods and a process that has the ability to scale in sync with market demand. Full automation may not be necessary for all clinical phases, but it is important to plan for future incorporation. To this end, we have invested time and capital into evaluating relevant technology for CGT processing and have developed proprietary equipment that did not exist in the marketplace. We aim to build value in various aspects of our company ranging from supply related processes including development and distribution systems, clinical and regulatory services, engineering and devices such as Decentralized Production Units and OMPULs discussed below and delivery systems. Therapies serviced include immuno-oncology, anti-aging, metabolic, dermatology, orthopedic, as well as regenerative technologies. The POCare Platform is a unique globally harmonized and decentralized CGT-processing infrastructure that offers cost-effective processing capacities with ease for scalability and reproducibility. By producing personalized cell and gene therapies (CGTs) utilizing the POCare Platform, we are able to add new capacity within months instead of years. Over time, we have worked to develop and validate POCare Technologies that can be combined within mobile production units for advanced therapies. | 13 | | **** **Notable 2024 Activities** * On January 29, 2024, the Company and Metalmark Capital Partners (Metalmark or MM) entered into a Unit Purchase Agreement (the MM UPA), pursuant to which the Company acquired all of the preferred units of Octomera LLC (Octomera) previously owned by MM (the MM Acquisition), and effective that date, reconsolidated Octomera into its accounts. The Company currently owns 100% of the equity interests of Octomera. The Company had previously, from June 30, 2023 (date of deconsolidation), deconsolidated Octomera from its consolidated financial statements. On April 5, 2024, the Company entered into an Asset Purchase and Strategic Collaboration Agreement (the Purchase Agreement) with Griffin Fund 3 BIDCO, Inc., (Germfree), for the sale by the Company of five OMPULs to Germfree, which will be incorporated into Germfrees lease fleet and leased back to the Company or to third-party lessees designated by the Company. On November 5, 2024, Germfree notified the Company of its intention not to lease any OMPULS back to the Company. Germfree confirmed that it has satisfied its obligations to the Company under the Purchase Agreement. On June 13, 2025 the Company and Germfree resolved all remaining differences between themselves. On May 21, 2024, the Company entered into debt exchange agreements with three convertible debt holders pursuant to which a total of $16,007,372 of outstanding principal and accrued interest was exchanged for an aggregate of 1,577,695 shares of common stock of the Company. On July 10, 2024, the Company entered into an Asset Purchase Agreement (the Purchase Agreement) with Broaden Bioscience and Technology Corp. (Broaden) for the purchase by the Company of the following assets (the Assets): The process and algorithms developed by Broaden for processing CAR-T, RACE CAR-T and all oncology products that will enable the Company to develop and sell treatments to third parties, which include Broadens rights, title and interests in and to all intellectual property, including, but not limited to, patents, patent applications, know-how, materials, licenses, permits and approvals related thereto. On July 12, 2024, the Company entered into an Asset Purchase Agreement (the Purchase Agreement) with Theracell Advanced Biotechnology S.A, Theracell Advanced Biotechnology LTD and IDNA Genomics Public Limited (collectively, Theracell) for the purchase by the Company of the following assets (the Assets) owned by Theracell: 1) 50% of the outstanding ownership rights and equity interests in Theracell Laboratories IKE (Theracell IKE) not currently owned by the Company so that the Company shall own 100% of the outstanding equity interests of Theracell IKE; and 2) Certain products (the Products), which include: (i) the manufacturing processes, algorithms, work instructions, test methods, standard operating procedures and specifications for producing Tumor Infiltrating Lymphocytes (TILs) that meet current Good Manufacturing Practice (cGMP) requirements that will enable the Company to potentially use this product as a platform for treating a wide variety of solid tumors; (ii) a 3rd generation GMP lentivirus production process, which is part of a therapy manufacturing process that will enable the Company to potentially treat Beta Thalassemia therapies; (iii) an oncolytic virus cell carrier platform which will enable the Company to potentially develop treatments for an array of cancers; (iv) a process for the potential treatment of mesenchymal stem cells for kidney disorders; (v) a process for controlled isolation of regenerative EVs derived from mesenchymal stem cells for the potential treatment of kidney disorders; and (vi) bioxome encapsulated APIs for improved transdermal delivery and bioavailability for the potential treatment of atopic dermatitis/wound healing; including Theracells rights, title and interests in and to all intellectual property, including, but not limited to, patents, patent applications, know-how, materials, licenses, permits and approvals. On October 19, 2024, Mark Goodman resigned as a director of the Company, On October 28, 2024, the Board of Directors of the Company, following the recommendation of the Nominating and Corporate Governance Committee of the Board, elected Adam Pelavin, Jagannathan Bhalaji, and Santhosh Nagaraj to serve as members of the Board. On December 24, 2024, Jagannathan Bhalaji resigned as a director of the Company. On August 9, 2025, Yaron Adler and Adam Pelavin resigned as directors of the Company. On August 18, 2025, Santhosh Nagaraja resigned as a director of the Company. On August 8, 2025, Mr. Victor Miller, the Chief Financial Officer, Treasurer and Secretary of the Company resigned. Vered Caplan assumed the role of the principal financial and accounting officer following his resignation. | 14 | | On March 10, 2026, the Company appointed Douglas Karriker as its Chief Financial Officer, Treasurer and Secretary, effective March 10, 2026. On November 8, 2024, the two Belgian subsidiaries of the Company, viz. Orgenesis Belgium SRL and Orgenesis Services SRL (the Belgian subsidiaries), petitioned the Lige Business Court in Belgium (Court) for allowing their judicial reorganization pursuant to Article XX.41 of the Belgian Code of Economic Law. The petition follows the current inability of the Belgian subsidiaries to pay employee payroll expenses and accounts payable. The Court ordered the liquidation of the two subsidiaries, which were deconsolidated from the Companys accounts. **Revenue Model, Business Development and Licenses** Our POCare Platform is comprised of three enabling components: a multitude of licensed cell based POCare Therapies to be produced in closed, automated POCare Technology systems across a collaborative POCare Network. Our therapies include, but are not limited to, autologous, cell-based immunotherapies, therapeutics for metabolic diseases, anti-viral diseases, and tissue regeneration. We are establishing and positioning the business to bring point-of-care therapies to patients in a scalable way working directly with hospitals and through regional partners and organizations active in autologous cell therapy product development, including facilities in various countries in North America, Europe, Asia, the Middle East, and Australia. Our goal through the POCare Platform is to enable a rapid, globally harmonized pathway for these therapies to reach large numbers of patients at lowered costs through efficient, and decentralized production. Our POCare Network brings together industry partners, research institutes and hospitals worldwide to achieve harmonized, regulated clinical development and production of the therapies. We are focused on technology in licensing and therapeutic collaborations, and we out-license therapies marketing rights and manufacturing rights to partners. In many cases, the partners are responsible for the preparation of clinical trials, local regulatory approvals and regional marketing activities. Such licensing includes exclusive or nonexclusive, sublicensable, royalty bearing rights and license to the Orgenesis Background IP as required to manufacture, distribute and market and sell Orgenesis products within the relevant territories. In consideration of the rights and the licenses so granted, we receive a royalty in the range of ten percent of the net sales generated by the partners and/or licensees or sublicensees (as applicable) with respect to the Orgenesis products. Our business model of partnering with regional partners for initial clinical development of licensed POCare Therapies allows us to de-risk our clinical development plans. We have access to the development and clinical data generated by our partners based on which we can make informed decisions as to which of our assets have the most promising value for development in major markets such as the US and EU. Our goal is once we have proof of concept and clinical data from our regional partners, we can focus on developing such therapeutic products. Further to revenues generated from out-licensing, we generate revenues from POCare Services and sales which is comprised of: | | R&D development services provided to out-licensing partners | | We have signed POCare development services Master Services Agreements (MSAs) with our partners. In terms of the MSAs, we provide certain broadly defined development services that relate to our licensed therapies designed to develop or enhance the therapy with the objective of preparing it for clinical use. Such services, per therapy, include regulatory services, pre-clinical studies, intellectual property services, development services, and GMP process translation. We also provide support services to our customers. | | Hospital supply | | Hospital services includes the sale or lease of products and the performance of processing services to our POCare hospitals or other medical providers. We either work directly with hospitals or receive payments through our regional partnerships. | | Cell process development revenue | | | 15 | | We provide cell process development services in some regions to third party customers. Those services are unique to the customers who retain the ownership of the intellectual property created through the process. | | POCare cell processing | | We provide distributed cell processing services for third party customers at POCare Centers in close proximity to patients. Our POCare revenue is as follows: | | | Years Ended December 31, | | | | Revenue stream: | | 2024 | | | 2023 | | | | | | (in thousands) | | | | POCare development services | | $ | | | | $ | - | | | Cell process development services and hospital services | | | 1,020 | | | | 515 | | | | License fees | | | 15 | | | | 15 | | | | Total | | $ | 1,035 | | | $ | 530 | | | **** **Liquidity** We do not currently have sufficient funds to service our operations and our expenses and other liquidity needs and require additional capital immediately, and our independent registered public accountants and management have expressed substantial doubt as to our ability to continue as a going concern. As of December 31, 2024 and 2023, we had cash and cash equivalents of approximately $0.1 million and $0.8 million, respectively, and working capital deficits of approximately $26 million and $12 million, respectively. We continue to incur significant expenses in connection with operating as a public company. As of December 31, 2024 and 2023, we had accounts payable and accrued expenses of $12.8 million and $8.7 million, respectively. We had approximately $65.8 million in outstanding debts as of December 31, 2024, inclusive of the calculated fair market value, and not the actual repayment amount, of our convertible loans, revolving line of credit, loans with related parties, and other debt obligations. In September 2025, we repaid $6.3 million of this outstanding debt. We intend to continue to seek delays on certain payments and explore other ways of potentially reducing expenses with the goal of preserving cash until additional financing is secured. These efforts may not be successful or sufficient in amount or on a timely basis to meet our ongoing capital requirements. We continue to actively seek additional financing. In the absence of additional sources of liquidity, we do not have sufficient existing cash resources to meet operating and liquidity needs. However, there is no assurance that we will be able to timely secure such additional liquidity or be successful in raising additional funds or that such required funds, if available, will be available on acceptable terms or that they will not have a significant dilutive effect on our existing stockholders. In addition, we are unable to determine at this time whether any of these potential sources of liquidity will be adequate to support our operations or provide sufficient cash flows to us to meet our obligations as they become due and continue as a going concern. In the event we determine that additional sources of liquidity will not be available to us or will not allow us to meet our obligations as they become due, we may need to file a voluntary petition for relief under the United States Bankruptcy Code in order to implement a restructuring plan or liquidation. In addition, substantial doubt about our ability to continue as a going concern may cause investors or other financing sources to be unwilling to provide funding to us on commercially reasonable terms, if at all. If sufficient funds are not available, we will have to delay, reduce the scope of, or eliminate some or all of our business activities, which would adversely affect our business prospects and our ability to continue our operations. | 16 | | **** **Competition in the Cell Therapy Field** The biopharmaceutical industry is intensely competitive. There is continuous demand for innovation and speed, and as the cell-based therapies market evolves, there is always the risk that a competitor may be able to develop other compounds or drugs that are able to achieve similar or better results for indications. Potential competition includes major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, and other research institutions. Many of these competitors have substantially greater financial, technical, and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations with established sales forces. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Currently, we are not aware of any other companies pursuing a business model similar to what we are developing under our POCare Platform. However, our competitors in the CGT field who are significantly larger and better capitalized than us could undertake strategies similar to what we are pursuing and even develop them at a much more rapid rate. These potential competitors include the same multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, and other research institutions that are operating in the CGT field. In that respect, smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. **Intellectual Property** We will be able to protect our technology and products from unauthorized use by third parties only to the extent it is covered by valid and enforceable claims of our patents or is effectively maintained as trade secrets. Patents and other proprietary rights are thus an essential element of our business. Our success will depend in part on our ability to obtain and maintain proprietary protection for our product candidates, technology, and know-how, to operate without infringing on the proprietary rights of others, and to prevent others from infringing our proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, filing U.S. and foreign patent applications related to our proprietary technology, inventions, and improvements that are important to the development of our business. We also rely on trade secrets, know-how, continuing technological innovation, and in-licensing opportunities to develop and maintain our proprietary position. In addition, we own or have exclusive rights to nineteen (19) United States patents, twenty one (21) foreign-issued patents, sixteen (16) pending patent applications in the United States, twenty seven (27) pending patent applications in foreign jurisdictions, including Australia, Brazil, Canada, China, Europe, Hong Kong, India, Israel, Japan, Mexico, New Zealand, Korea, Panama, Russia, Singapore, and South Africa. These patents and patent applications relate, among others, to (1) dendritic cell based (whole cell) vaccines, and their use for treating cancer and viral diseases; (2) compositions comprising Ranpirnase and other ribonucleases and their use for treating viral diseases; (3) tumor infiltrating lymphocytes (TILs) and their use for treating cancer; (4) compositions comprising immune cells for treating COVID-19; (5) therapeutic compositions comprising exosomes, bioxomes, and redoxomes; (6) Sterile bio-processing system for culturing cells; (7) chimeric antigen receptors (CARs); (8) Mobile Processing Units; (9) Cell-delivery devices; and (10) skin diseases treatment and anti-aging compositions. We have two granted U.S. patents and a pending U.S. patent application directed, among others, to dendritic cell-based (whole cell) vaccines, and their use for treating cancer and viral diseases. The granted U.S. patents will expire in 2037. We have granted and pending U.S. patent applications directed, among others, to compositions comprising Ranpirnase and other ribonucleases for the treatment of viral diseases. Granted U.S. patents and if issued, any patents based on these applications will expire between 2024 and 2042. Counterpart granted patents and patents applications were filed in Australia, Canada, China, Europe, Hong Kong, Japan, Mexico, New Zealand, South Korea, Russian Federation, Singapore, and South Africa. If issued, any patents based on these applications will expire between 2035 and 2042. These expiration dates do not include any patent term extensions that might be available following the grant of marketing authorizations. | 17 | | We have pending U.S. patent applications directed, among others, to therapeutic compositions comprising exosomes, bioxomes, and redoxomes. If issued, any patents based on these applications will expire between 2029 and 2041. Counterpart patents applications were filed in, China, Europe, India, Israel, and Japan, . If issued, any patents based on these applications will expire in 2039 and 2041. These expiration dates do not include any patent term extensions that might be available following the grant of marketing authorizations. We have a pending U.S. patent application directed, among others, to immune cell-based vaccines comprising antigens against Coronavirus Disease 2019 (COVID-19). A counterpart patent application was also filed in Europe. If issued, any patents based on these applications will expire in 2043, without including any patent term extensions that might be available following the grant of marketing authorizations. We have granted U.S. patent and a pending U.S. patent application, directed, among others, to bioreactors for cell culture and automated devices for supporting cell therapies. The granted U.S. patents will expire in 2027. If issued, any patents based on pending applications will expire in 2041. Counterpart patent applications were filed in Israel, Japan, and Mexico. Patents were granted in Korea, China and Canada and will expire in 2027. We have a pending U.S. patent application directed, among others, to tumor infiltrating lymphocytes (TILs) and their use for treating cancer. If issued, patents will expire in 2042, without including any patent term extension that might be available following the grant of marketing authorizations. We have pending U.S. patent application directed, among others, to a sterile bio-processing system for culturing cells and methods for culturing cells, such as tumor infiltrating lymphocytes (TILs). Counterpart patent applications were filed in China and Europe. If issued, any patent based on this application would expire in 2044, without including any patent term extensions that might be available following the grant of marketing authorizations. We have a pending U.S. patent application directed, among others, to compositions comprising mesenchymal stem cells, and their use for treating solid tumors. If issued, any patent based on this application would expire in 2040. Counterpart patent applications were filed in Europe, and Israel. If issued, any patents based on these applications would expire in 2040. These expiration dates do not include any patent term extensions that might be available following the grant of marketing authorizations. We have a pending U.S. patent application directed, among others, to methods of treating cancer or CNS-related diseases by intranasal administration of an oncolytic virus. If converted into national phase applications and issued, any patents based on these applications will expire in 2043, without including any patent term extensions that might be available following the grant of marketing authorizations. A counterpart patent application was filed in Europe. We have two pending U.S. patent applications and a pending European patent application, directed, among others, to chimeric antigen receptors (CARs), and their use for treating malignancies. Counterpart patent applications were filed in China and Hong-Kong. If issued, any patents based on the U.S. applications would expire in 2042 or 2043, without including any patent term extensions that might be available following the grant of marketing authorizations. We have a pending U.S. patent application directed, among others, to a composition comprising topiramate and bioxome, redoxome, HA, extracellular vesicles (EV), or PRP extracellular vesicles and its use for the treatment of a dermatological condition. If issued, any patents based on this application would expire in 2042, without including any patent term extensions that might be available following the grant of marketing authorizations. We also own IP and related Extracellular Vesicle (EV) Technology pursuant to an EV purchase agreement (the EV Agreement). Pursuant to the EV Agreement, we received all of the rights in EV technology purchased. In addition, we received an exclusive worldwide license to use the EV IP technology for any purpose. We have one U.S. patent application relating to hydrogel compositions (co-applicants). We have two U.S. patent applications and two EP patent applications relating to adipose derived treatments (co-applicants). | 18 | | We have a pending U.S. patent application and a pending EP patent application directed, among others, to Mobile Processing Units. **Government Regulation** **Development Business** We are required to comply with the regulatory requirements of various local, state, national and international regulatory bodies having jurisdiction in the countries or localities where we manufacture products, where our OMPULs are established or where we plan to supply products. In particular, we are subject to laws and regulations concerning research and development, testing, manufacturing processes, equipment and facilities, including compliance with GMPs, labeling and distribution, import and export, facility registration or licensing, and product registration and listing. As a result, our facilities are subject to regulation in Israel and South Korea. We are also required to comply with environmental, health and safety laws and regulations, as discussed below. These regulatory requirements impact many aspects of our operations, including manufacturing, developing, labeling, packaging, storage, distribution, import and export and record keeping related to customers products. Noncompliance with any applicable regulatory requirements can result in government refusal to approve facilities for manufacturing products or products for commercialization. Both of our products and our customers products must undergo pre-clinical and clinical evaluations relating to product safety and efficacy before they are approved as commercial therapeutic products. The regulatory authorities that have jurisdiction in the countries in which our and our customers products are intended to be marketed may delay or put on hold clinical trials, delay approval of a product or determine that the product is not approvable. The regulatory agencies can delay approval of a drug if our manufacturing facilities or OMPULs are not able to demonstrate compliance with cGTPs, pass other aspects of pre-approval inspections (i.e., compliance with filed submissions) or properly scale up to produce commercial supplies. The government authorities having jurisdiction in the countries in which our customers intend to market their products have the authority to withdraw product approval or suspend manufacture if there are significant problems with raw materials or supplies, quality control and assurance or the product is deemed adulterated or misbranded. In addition, if new legislation or regulations are enacted or existing legislation or regulations are amended or are interpreted or enforced differently, we may be required to obtain additional approvals or operate according to different manufacturing or operating standards or pay additional fees. This may require a change in our manufacturing techniques or additional capital investments in our facilities. Certain products manufactured by us involve the use, storage and transportation of toxic and hazardous materials. Our operations are subject to extensive laws and regulations relating to the storage, handling, emission, transportation and discharge of materials into the environment and the maintenance of safe working conditions. We maintain environmental and industrial safety and health compliance programs and training at our facilities. Prevailing legislation tends to hold companies primarily responsible for the proper disposal of their waste even after transfer to third party waste disposal facilities. Other future developments, such as increasingly strict environmental, health and safety laws and regulations, and enforcement policies, could result in substantial costs and liabilities to us and could subject the handling, manufacture, use, reuse or disposal of substances or pollutants at our facilities to more rigorous scrutiny than at present. Our development operations involve the controlled use of hazardous materials and chemicals. Although we believe that our procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we may incur significant additional costs to comply with applicable laws in the future. Also, even if we are in compliance with applicable laws, we cannot completely eliminate the risk of contamination or injury resulting from hazardous materials or chemicals. As a result of any such contamination or injury, we may incur liability or local, city, state or federal authorities may curtail the use of these materials and interrupt our business operations. In the event of an accident, we could be held liable for damages or penalized with fines, and the liability could exceed our resources. Compliance with applicable environmental laws and regulations is expensive, and current or future environmental regulations may impair our contract manufacturing operations, which could materially harm our business, financial condition and results of operations. | 19 | | The costs associated with complying with the various applicable local, state, national and international regulations could be significant and the failure to comply with such legal requirements could have an adverse effect on our results of operations and financial condition. See Risk Factors Risks Related to Development and Regulatory Approval of Our Therapies and Product Candidates Extensive industry regulation has had, and will continue to have, a significant impact on our business, especially our product development, manufacturing and distribution capabilities. for additional discussion of the costs associated with complying with the various regulations. **POCare Therapies Portfolio** Our therapeutic product portfolio pipeline is diverse and addresses various unmet clinical needs. It is predominantly comprised of personalized autologous cell therapies, implying that patients receive cells that originate from their own body, virtually eliminating the risk of an immune response and rejection and thus easing various regulatory hurdles. In addition, by leveraging our vast experience and proven track record in developing and optimizing cell processing, these selective therapies are adapted to be produced in closed, automated systems, reducing the need for health care provider in-house, high-grade and expensive cleanroom environments. The systems enable each stage of the manufacturing process (cell sorting, expansion, genetic modifications, quality control) to be optimized in order to substantially reduce the cost burden for patients and making the therapies widely accessible. Notably, some of our therapeutic pipeline is developed by researchers from our network and is subsequently out-licensed to the researcher for its territory and validated in multi-center clinical trials conducted across point of care partner sites leveraging the robustness of our POCare Network. Having access to a portfolio of therapeutics, for the most attractive products, the Company intends to than seek additional regulatory approvals and offer the products for sale to medical institutions globally within our network In exchange, the inventors will receive a royalty. **Regulatory Process in the United States** Our potential product candidates are subject to regulation as a biological product under the Public Health Service Act and the Food, Drug and Cosmetic Act. The FDA generally requires the following steps for pre-market approval or licensure of a new biological product: | | Pre-clinical laboratory and animal tests conducted in compliance with Good Laboratory Practice, or GLP, requirements to assess a drugs biological activity and to identify potential safety problems, and to characterize and document the products chemistry, manufacturing controls, formulation, and stability; | | | | Submission to the FDA of an Investigational New Drug, or IND, application, which must become effective before clinical testing in humans can start; | | | | Obtaining approval of Institutional Review Boards, or IRBs, of research institutions or other clinical sites to introduce biologic drug candidates into humans in clinical trials; | | | | Conducting adequate and well-controlled clinical trials to establish the safety and efficacy of the product for its intended indication conducted in compliance with Good Clinical Practice, or GCP, requirements; | | | | Compliance with current GMP regulations and standards; | | | | Submission to the FDA of a Biologics License Application (BLA) for marketing that includes adequate results of pre-clinical testing and clinical trials; | | | | The FDA reviews the marketing application in order to determine, among other things, whether the product is safe, effective and potent for its intended uses; and | | | | Obtaining FDA approval of the BLA, including inspection and approval of the product manufacturing facility as compliant with GMP requirements, prior to any commercial sale or shipment of the pharmaceutical agent. The FDA may also require post marketing testing and surveillance of approved products or place other conditions on the approvals. | | In 2024, the FDAs regulatory landscape for cell and gene therapies (CGTs) continues to evolve with an increased emphasis on accelerated approval pathways and flexibility in clinical trial endpoints. The FDAs Center for Biologics Evaluation and Research (CBER) is prioritizing fast-track approval options, particularly for rare diseases, through the use of surrogate or intermediate clinical endpoints supported by biomarker data and animal models. https://www.fda.gov/ | 20 | | **** **Regulatory Process in Europe** In the European Union (EU) somatic cell and gene therapy products are called Advanced Therapy Medicinal Product (ATMPs). Since January 2022 the Clinical Trial Regulation (EU) 536/2014 regulates the application of medicinal products including ATMPs to humans immediately effective in all member states. In conjunction with Regulation 536/2014 the EU commission has released two delegated acts regulating manufacturing of investigational as well as marketed AMPs. For products that are regulated as an ATMP, Regulation requires: | | Compliance with current GMP regulations and standards, as described in the delegated acts; | | | | Filing a Clinical Trial Application (CTA); | | | | in EU member states and EEA countries according to regulation 536/2014 via CTIS (Clinical Trial Information System) allowing a harmonized approval process among all member states (including multinational clinical trials); | | | | Obtaining approval by ethic committees responsible for medical institutions; | | | | Adequate and well-controlled clinical trials according to GCP standards protecting the well-being of a study participant and establishing the safety and efficacy of the product for its intended use; | | | | Centralized submission procedure for ATMPs via EMA for Marketing Authorization; and | | | | Review and approval of the Marketing Authorization Application. | | Exemption from the centralized procedure was introduced into the ATMP Regulation to allow marketing of certain ATMPs in individual EU member states. The so-called hospital exemption can only be applied for custom-made ATMPs used in a hospital setting for a specific patient by a treating physician. In addition, a competent authority must authorize hospital exemption for ATMPs. Hospital exemption products must comply with the same national requirements concerning quality, traceability and pharmacovigilance that apply to authorized medicinal products. The hospital exemption has to be applied for individually in each EU member state according to national procedures and control measures. In 2024, the European regulatory framework for cell and gene therapies (CGTs) continues to emphasize innovation while maintaining rigorous standards to ensure safety and efficacy. The European Medicines Agency (EMA) remains focused on adaptive pathways and flexibility in approving CGTs, particularly through mechanisms such as conditional marketing authorizations and adaptive licensing to expedite patient access while awaiting full clinical validation. *https://core-reference.org/news-summaries/march-2024/* **** **Clinical Trials** Typically, both in the U.S. and the EU, clinical testing involves a three-phase process, although the phases may overlap. In Phase I, clinical trials are conducted with a small number of healthy volunteers or patients and are designed to provide information about product safety and to evaluate the pattern of drug distribution and metabolism within the body. In Phase II, clinical trials are conducted with groups of patients afflicted with a specific disease in order to determine preliminary efficacy, optimal dosages and expanded evidence of safety. In some cases, an initial trial is conducted in diseased patients to assess both preliminary efficacy and preliminary safety and patterns of drug metabolism and distribution, in which case it is referred to as a Phase I/II trial. Phase III clinical trials are generally large-scale, multi-center, comparative trials conducted with patients afflicted with a target disease in order to provide statistically valid proof of efficacy, as well as safety and potency. In some circumstances, the FDA or EMA may require Phase IV or post-marketing trials if it feels that additional information needs to be collected about the drug after it is on the market. During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, as well as clinical trial investigators. An agency may, at its discretion, re-evaluate, alter, suspend, or terminate the testing based upon the data that have been accumulated to that point and its assessment of the risk/benefit ratio to the patient. Monitoring all aspects of the study to minimize risks is a continuing process. All adverse events must be reported to the FDA or EMA. | 21 | | **** **Human Capital Resources** As of December 31, 2024, we had an aggregate of 77 employees working at our company and Subsidiaries. In addition, we retain the services of outside consultants for various functions including clinical work, finance, accounting and business development services. Most of our senior management and professional employees have had prior experience in pharmaceutical or biotechnology companies. None of our employees are covered by collective bargaining agreements. We believe that we have good relations with our employees. **Compensation and Benefits** We believe that our future success largely depends upon our continued ability to attract and retain highly skilled employees. Biotechnology companies both large and small compete for a limited number of qualified applicants to fill specialized positions. To attract qualified applicants, we offer a total rewards package consisting of base salary and cash target bonus, a comprehensive benefit package and equity compensation to select employees. Bonus opportunity and equity compensation increase as a percentage of total compensation based on level of responsibility. Actual bonus payout is based on performance. ** **Diversity, Equity and Inclusion** Much of our success is rooted in the diversity of our teams and our commitment to inclusion. We value diversity at all levels. We believe that our business benefits from the different perspectives a diverse workforce brings, and we pride ourselves on having a strong, inclusive and positive culture based on our shared mission and values. This is reflected in our numbers with our total workforce being approximately 44% women, 14% ethnically diverse and 61% over the age of 40. **Environmental, Social and Governance** Our commitment to integrating sustainability across our organization begins with our Board of Directors, or the Board. The Nominating and Governance Committee of the Board has oversight of strategy and risk management related to Environmental, Social and Governance, or ESG. All employees are responsible for upholding our core values, including to communicate, collaborate, innovate and be respectful, as well as for adhering to our Code of Ethics and Business Conduct, including our policies on bribery, corruption, conflicts of interest and our whistleblower program. We encourage employees to come to us with observations and complaints, ensuring we understand the severity and frequency of an event in order to escalate and assess accordingly. Our Chief Compliance Officer strives to ensure accountability, objectivity, and compliance with our Code of Conduct. If a complaint is financial in nature, an Audit Committee member is notified concurrently, which triggers an investigation, action, and report. We are committed to protecting the environment and attempt to mitigate any negative impact of our operations. We monitor resource use, improve efficiency, and at the same time, reduce our emissions and waste. We are systematically addressing the environmental impacts of the buildings we rent as we make improvements, including adding energy control systems and other energy efficiency measures. Waste in our own operation is minimized by our commitment to reduce both single-use plastics and operating paper-free, primarily in a digital environment. We have safety protocols in place for handling biohazardous waste in our labs, and we use third-party vendors for biohazardous waste and chemical disposal. **Corporate and Available Information** **** Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports are available free of charge though our website (*http://www.orgenesis.com*) as soon as practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the SEC). Except as otherwise stated in these documents, the information contained on our website or available by hyperlink from our website is not incorporated by reference into this report or any other documents we file, with or furnish to, the SEC. | 22 | | During 2024 and 2025, we experienced significant changes in the trading status of our common stock. Following the delisting of our common stock from the Nasdaq Capital Market, our common stock began trading on the OTCQX operated by the OTC Markets Group, Inc. (OTC Markets) beginning on October 21, 2024. On June 3, 2025, following delays in our Exchange Act filings and the expiration of the applicable grace period, OTC Markets moved the trading of our common stock from OTCQX to the Pink Limited tier. On July 29, 2025, due to further delays in our Exchange Act filings, OTC Markets moved the trading of our common stock from OTC Pink Limited to the OTC Expert Market tier. As a result, public access to bid and ask prices and trading volume information became restricted, and most investors are not able to easily trade our common stock during this period. Despite these developments, our common stock remains tradable, with pricing information accessible to brokers and market makers. We are actively working to complete and file all required periodic reports to regain compliance with our Exchange Act reporting obligations. We intend to reapply for listing on the OTCQX Market as soon as we become current in our SEC filings. Our common stock is currently traded on the OTC Expert Market under the symbol ORGS. As used in this Annual Report on Form 10-K and unless otherwise indicated, the term Company refers to Orgenesis Inc. and its Subsidiaries. Unless otherwise specified, all amounts are expressed in United States Dollars. **** **ITEM 1A. RISK FACTORS** **** *Summary of Risk Factors* Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading Risk Factors and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the SEC, before making an investment decision regarding our common stock. | | Our management, as of December 31, 2024, and our independent registered public accounting firm, in its report on our financial statements as of and for the fiscal year ended December 31, 2024, have concluded that there is substantial doubt as to our ability to continue as a going concern. | | | | | | | | Our POCare business has a limited operating history and an unproven business model and faces significant challenges as the cell therapy industry is rapidly evolving. Our prospects may be considered speculative and any failure to execute our business strategy could adversely impact our business. | | | | | | | | We are not profitable as of December 31, 2024, have limited cash flow and, unless we increase revenues and take advantage of any commercial opportunities that arise to expand our POCare business, the perceived value of our company may decrease and our stock price could be affected accordingly. | | | | | | | | Our research and development efforts on novel technology using cell-based therapy and our future success is highly dependent on the successful development of that technology. | | | | | | | | We require additional capital to support our business, and this capital may not be available on acceptable terms or at all. | | | | | | | | We have entered into collaborations and may form or seek collaborations or strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements. | | | | | | | | Our success will depend on strategic collaborations with third parties to develop and commercialize therapeutic product candidates, and we may not have control over a number of key elements relating to the development and commercialization of any such product candidate. | | | | | | | | Our success depends on our ability to protect our intellectual property and our proprietary technologies. | | | | | | | | Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business. | | | 23 | | | | Our success depends on our ability to develop and grow our paradigm-shifting decentralized approach to CGT therapies utilizing an automated and/or closed approach validated for compliant production at or near the patient care site (Decentralized Cell Processing or DCP Platform) and Octomeras cell processing business. | | | | | | | | Our success depends on our ability to develop and roll out our Decentralized Production Units and OMPULs. | | | | | | | | If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates. | | | | | | | | We are increasingly dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity and data storage risks. | | | | | | | | There can be no assurance that we will be able to develop in-house sales and commercial distribution capabilities or establish or maintain relationships with third-party collaborators to successfully commercialize any product in the United States or overseas, and as a result, we may not be able to generate product revenue. | | | | | | | | Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences. | | | | | | | | Our product candidates are biologics, and the manufacture of our product candidates is complex, and we may encounter difficulties in production, particularly with respect to process development or scaling-out of our manufacturing capabilities. | | | | | | | | Cell-based therapies rely on the availability of reagents, specialized equipment, and other specialty materials, which may not be available to us on acceptable terms or at all. For some of these reagents, equipment, and materials, we rely or may rely on sole source vendors or a limited number of vendors, which could impair our ability to manufacture and supply our products. | | | | | | | | We currently have no marketing and sales organization and have no experience in marketing therapeutic products. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to generate product revenue. | | | | | | | | There can be no assurance that we will be able to develop in-house sales and commercial distribution capabilities or establish or maintain relationships with third-party collaborators to successfully commercialize any product in the United States or overseas, and as a result, we may not be able to generate product revenue. | | | | | | | | We face significant competition from other biotechnology and pharmaceutical companies, many of which have substantially greater financial, technical and other resources, and our operating results will suffer if we fail to compete effectively. | | | | | | | | We are highly dependent on key personnel who would be difficult to replace, and our business plans will likely be harmed if we lose their services or cannot hire additional qualified personnel. | | | | | | | | Extensive industry regulation has had, and will continue to have, a significant impact on our business, especially our product development, manufacturing and distribution capabilities. | | | | | | | | Third parties to whom we may license or transfer development and commercialization rights for products covered by intellectual property rights may not be successful in their efforts and, as a result, we may not receive future royalty or other milestone payments relating to those products or rights. | | | | | | | | Conditions in Israel, including the October 7, 2023 attack by Hamas and other terrorist organizations from the Gaza Strip and Israels war against them, may affect certain of our operations. | | | 24 | | | | We have identified a material weakness in our internal control over financial reporting. Failure to achieve and maintain effective internal controls over financial reporting could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner, which could have an adverse impact on our business. | | | | | | | | Our securities have been delisted from Nasdaq and currently trade on the OTC Expert Market, which could make it difficult to trade our common stock. | | | | | | | | We have not been able, and may continue to be unable, to timely file periodic reports with the SEC. | | *Risk Factors* **** An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this report in evaluating our company and its business before purchasing shares of our companys common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. You could lose all or part of your investment due to any of these risks. ** **Risks Related to Our Company and POCare Business** **** **We do not currently have sufficient funds to service our operations and our expenses and other liquidity needs and require additional capital immediately. Our management, as of December 31, 2024, and our independent registered public accounting firm, in its report on our financial statements as of and for the fiscal year ended December 31, 2024, have concluded that there is substantial doubt as to our ability to continue as a going concern.** We do not currently have sufficient funds to service our operations and our expenses and other liquidity needs beyond [DATE] and require additional capital immediately, and our independent registered public accountants and management have expressed substantial doubt as to our ability to continue as a going concern. Our audited financial statements for the fiscal year ended December 31, 2024 were prepared assuming that we will continue as a going concern. The going concern basis of the presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and satisfy our liabilities in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from our inability to continue as a going concern. As of December 31, 2024, our management concluded that, based on expected operating losses and negative cash flows, there is substantial doubt about our ability to continue as a going concern for the twelve months after the date the financial statements were issued. Our ability to continue as a going concern is subject to our ability to raise additional capital through equity offerings or debt financings. However, we may not be able to secure additional financing in a timely manner or on favorable terms, if at all. If we cannot continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements, and it is likely that our stockholders may lose some or all of their investment in us. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms or at all. We are reliant on Alpha Prosperity Fund SPC for our immediate capital needs and will require shareholder approval to receive up to an additional $2,750,000 upon the exercise of certain warrants, which we may not be able to obtain. We intend to continue to seek delays on certain payments and explore other ways of potentially reducing expenses with the goal of preserving cash until additional financing is secured. These efforts may not be successful or sufficient in amount or on a timely basis to meet our ongoing capital requirements. We continue to actively seek additional financing. In the absence of additional sources of liquidity, we do not have sufficient existing cash resources to meet operating and liquidity needs. However, there is no assurance that we will be able to timely secure such additional liquidity or be successful in raising additional funds or that such required funds, if available, will be available on acceptable terms or that they will not have a significant dilutive effect on our existing stockholders. In addition, we are unable to determine at this time whether any of these potential sources of liquidity will be adequate to support our operations or provide sufficient cash flows to us to meet our obligations as they become due and continue as a going concern. In the event we determine that additional sources of liquidity will not be available to us or will not allow us to meet our obligations as they become due, we may need to file a voluntary petition for relief under the United States Bankruptcy Code in order to implement a restructuring plan or liquidation. In addition, substantial doubt about our ability to continue as a going concern may cause investors or other financing sources to be unwilling to provide funding to us on commercially reasonable terms, if at all. If sufficient funds are not available, we will have to delay, reduce the scope of, or eliminate some or all of our business activities, which would adversely affect our business prospects and our ability to continue our operations. | 25 | | **** **Our POCare business has a limited operating history and an unproven business model and faces significant challenges as the cell therapy industry is rapidly evolving. Our prospects may be considered speculative and any failure to execute our business strategy could adversely impact our operations and the price of our common stock.** Our POCare business has a limited operating history and an unproven business model. Our plans to continue to grow our POCare cell therapy business and to further the development of ATMPs are subject to significant challenges, including having sufficient cash resources to support our operations. In addition, we may not be able to implement our POCare business or commence clinical trials or respond to competitive pressures due to other non-financial factors beyond our control. Our failure to effectively execute our business strategy could adversely affect our ability to successfully grow our POCare business and develop cell therapy product candidates, which could cause the value of your investment in our common stock to decline. **We are not profitable as of****December 31, 2024, have limited cash flow and, unless we increase revenues and take advantage of any commercial opportunities that arise to expand our POCare business, the perceived value of our company may decrease and our stock price could be affected accordingly.** For the year ended December 31, 2024 and as of the date of this report, we assessed our financial condition and concluded that based on current and projected cash resources and commitments, there is a substantial doubt about our ability to continue as a going concern to meet our current operations for the next 12 months from the date of this report. Our auditors report for the year ended December 31, 2024 includes a going concern opinion on the matter. Management is unable to predict if and when we will be able to generate significant revenues or achieve profitability. Our plan regarding these matters is to continue improving the net results in our POCare business into fiscal year 2025. There can be no assurance that we will be successful in increasing revenues, improving our POCare results or that the perceived value of our company will increase. In the event that we are unable to generate significant revenues in our POCare business, our business and stock price could be adversely affected. **Our research and development programs are based on novel technologies and are inherently risky.** We are subject to the risks of failure inherent in the development of products based on new technologies. The novel nature of our cell therapy technology creates significant challenges with respect to product development and optimization, manufacturing, government regulation and approval, third-party reimbursement and market acceptance. For example, the FDA and EMA have relatively limited experience with the development and regulation of cell therapy products and, therefore, the pathway to marketing approval for our cell therapy product candidates may accordingly be more complex, lengthy and uncertain than for a more conventional product candidate. The indications of use for which we choose to pursue development may have clinical effectiveness endpoints that have not previously been reviewed or validated by the FDA or EMA, which may complicate or delay our effort to ultimately obtain FDA or EMA approval. Because this is a new approach to treating diseases, developing and commercializing our product candidates subjects us to a number of challenges, including: | | obtaining regulatory approval from the FDA, EMA and other regulatory authorities that have very limited experience with the commercial development of our technology for treating different diseases; | | | | developing and deploying consistent and reliable processes for removing the cells from the patient engineering cells ex vivo and infusing the engineered cells back into the patient; | | | | developing processes for the safe administration of these products, including long-term follow-up for all patients who receive our products; | | | 26 | | | | sourcing clinical and, if approved, commercial supplies for the materials used to manufacture and process our products; | | | | developing a manufacturing process and distribution network with a cost of goods that allows for an attractive return on investment; | | | | establishing sales and marketing capabilities after obtaining any regulatory approval to gain market acceptance; and | | | | maintaining a system of post marketing surveillance and risk assessment programs to identify adverse events that did not appear during the drug approval process. | | Our efforts to overcome these challenges may not prove successful, and any product candidate we seek to develop may not be successfully developed or commercialized. **Kyslecel may not achieve patient or market acceptance, which could have a material adverse effect on our business.** Our commercialization strategy for Kyslecel relies on medical specialists, medical facilities and patients adopting TP-IAT with Kyslecel as an accepted treatment for chronic pancreatitis. However, medical specialists are historically slow to adopt new treatments, regardless of perceived merits, when older treatments continue to be supported by established providers. Overcoming such resistance often requires significant marketing expenditure or definitive product performance and/or pricing superiority. The cost of allocating resources for such requirements might severely impact the potential for profitability of Kyslecel. There is no guarantee that physician or patient acceptance of TP-IAT with Kyslecel will be substantial. Further, there is no guarantee that Koligo will be able to achieve patient acceptance or obtain enough customers (clinical providers) to meet its sales objectives. If we do not meet our sales objectives, our business prospects and financial performance will be materially and adversely affected. Further, we are partially reliant on published clinical trials and scientific research conducted by third parties to justify the patient benefit and safety of TP-IAT with Kyslecel and, as such, we rely, in part, on the accuracy and integrity of those third-parties to have reported the results and correctly collected and interpreted the data from all clinical trials conducted to date. If published data turn out to later be incorrect or incomplete, our business prospects and financial performance may be materially and adversely affected. **The therapeutic efficacy of Ranpirnase and our other product candidates is unproven in humans, and we may not be able to successfully develop and commercialize Ranpirnase or any of our other product candidates.** **** Ranpirnase and our other product candidates are novel compounds and their potential benefit as antiviral drugs or immunotherapies is unproven. Ranpirnase and our other product candidates may not prove to be effective against the indications for which they are being designed to act and may not demonstrate in clinical trials any or all of the pharmacological effects that have been observed in preclinical studies. As a result, our clinical trial results may not be indicative of the results of future clinical trials. **** Ranpirnase and our other product candidates may interact with human biological systems in unforeseen, ineffective or harmful ways. If Ranpirnase or any of our other product candidates is associated with undesirable side effects or have characteristics that are unexpected, we may need to abandon the development of such product candidate or limit development to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Because of these and other risks described herein that are inherent in the development of novel therapeutic agents, we may never successfully develop or commercialize Ranpirnase or any of our other product candidates, in which case our business will be harmed. **** | 27 | | **** **We will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.** As of December 31, 2024, we employed 77 employees. As our development and commercialization plans and strategies develop, we must add a significant number of additional managerial, operational, sales, marketing, financial, and other personnel. Future growth will impose significant added responsibilities on members of management, including: | | identifying, recruiting, integrating, maintaining, and motivating additional employees; | | | | managing our internal development efforts effectively, including the clinical and FDA review process for our product candidates, while complying with our contractual obligations to contractors and other third parties; and | | | | improving our operational, financial and management controls, reporting systems, and procedures. | | Our future financial performance and our ability to commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities. This lack of long-term experience working together may adversely impact our senior management teams ability to effectively manage our business and growth. We currently rely, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors and consultants to provide certain services. There can be no assurance that the services of these independent organizations, advisors and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed, or terminated, and we may not be able to obtain regulatory approval of our product candidates or otherwise advance our business. There can be no assurance that we will be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, if at all. If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, development, and commercialization goals. **We require additional capital to support our business, and this capital may not be available on acceptable terms or at all.** We intend to continue to make investments to support our business growth and require additional funds to respond to business challenges and to grow our POCare cell therapy business and to further the development of ATMPs. Accordingly, we will need to engage in equity or debt financings to secure additional funds. Capital and credit market conditions, adverse events affecting our business or industry, the tightening of lending standards, rising interest rates, negative actions by regulatory authorities or rating agencies, the lack of liquidity in our common stock or other factors also could negatively impact our ability to obtain future financing on terms acceptable to us or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to support our business growth and respond to business challenges could be significantly limited. In addition, the terms of any additional equity or debt issuances may adversely affect the value and price of our common stock, our results of operations, financial condition and cash flows. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any financing secured by us in the future could include restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. | 28 | | **** **We conduct certain of our operations in Israel. Conditions in Israel, including the October 7, 2023 attack by Hamas and other terrorist organizations from the Gaza Strip and Israels war against them, may affect certain of our operations.** Because we conduct certain operations in the State of Israel, some of our business and operations may be affected by economic, political, geopolitical and military conditions in Israel. In October 2023, Hamas terrorists infiltrated Israels southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israels border with the Gaza Strip and in other areas within the State of Israel. Following the attack, Israels security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. Moreover, the clash between Israel and Hezbollah in Lebanon, may escalate in the future into a greater regional conflict. Any hostilities involving Israel, or the interruption or curtailment of trade within Israel or between Israel and its trading partners could adversely affect certain of our operations and results of operations and could make it more difficult for us to raise capital. The conflict in Israel could also result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements. There have been travel advisories imposed relating to travel to Israel, and restriction on travel, or delays and disruptions as related to imports and exports may be imposed in the future. Additionally, certain members of our management and employees are located and reside in Israel. Shelter-in-place and work-from-home measures, government-imposed restrictions on movement and travel and other precautions taken to address the ongoing conflict may temporarily disrupt our management and employees ability to effectively perform their daily tasks. The Israel Defense Force (the IDF), the national military of Israel, is a conscripted military service, subject to certain exceptions. Several of our employees are subject to military service in the IDF and have been, or may be, called to serve. It is possible that there will be further military reserve duty call-ups in the future, which may affect our business due to a shortage of skilled labor and loss of institutional knowledge, and necessary mitigation measures we may take to respond to a decrease in labor availability, such as overtime and third-party outsourcing, for example, may have unintended negative effects and adversely impact our results of operations, liquidity or cash flows. It is currently not possible to predict the duration or severity of the ongoing conflict or its effects on our business, operations and financial conditions. The ongoing conflict is rapidly evolving and developing, and could disrupt certain of our business and operations, among others. **Currency exchange fluctuations may impact the results of our operations.** The results of our operations are affected by fluctuations in currency exchange rates in both sourcing and selling locations. Our results of operations may still be impacted by foreign currency exchange rates, primarily, the euro-to-U.S. dollar exchange rate. In recent years, the euro-to-U.S. dollar exchange rate has been subject to substantial volatility which may continue, particularly in light of recent political events regarding the European Union, or EU. Because we do not hedge against all of our foreign currency exposure, our business will continue to be susceptible to foreign currency fluctuations. **We have entered into collaborations and joint ventures and may form or seek collaborations or strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements.** We have entered into collaborations and joint ventures and may form or seek strategic alliances, create joint ventures or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to our product candidates and any future product candidates that we may develop. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business. In addition, we face significant competition in seeking appropriate strategic partners for which the negotiation process is time-consuming and complex. Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy. Further, collaborations involving our product candidates, such as our collaborations with third-party research institutions, are subject to numerous risks, which may include the following: | | collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration; | | | 29 | | | | collaborators may not perform their obligations as expected; | | | | collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities; | | | | collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; | | | | collaborators could fail to make timely regulatory submissions for a product candidate; | | | | collaborators may not comply with all applicable regulatory requirements or may fail to report safety data in accordance with all applicable regulatory requirements; | | | | collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates; | | | | product candidates developed in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; | | | | a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to their marketing and distribution; | | | | collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; | | | | disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our product candidates, or that result in costly litigation or arbitration that diverts management attention and resources; | | | | collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; and | | | | collaborators may own or co-own intellectual property covering our products that results from our collaborating with them and, in such cases, we would not have the exclusive right to commercialize such intellectual property. | | As a result, if we enter into collaboration agreements and strategic partnerships or license our products or businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture, which could delay our timelines or otherwise adversely affect our business. The success of our existing and future collaboration arrangements and strategic partnerships, which include research and development services by our collaborators to improve our intellectual property, will depend heavily on the efforts and activities of our collaborators and may not be successful. We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction. Any delays in entering into new collaborations or strategic partnership agreements related to our product candidates could delay the development and commercialization of our product candidates in certain geographies for certain indications, which would harm our business prospects, financial condition, and results of operations. **Our success will depend on strategic collaborations with third parties to develop and commercialize therapeutic product candidates, and we may not have control over a number of key elements relating to the development and commercialization of any such product candidate.** A key aspect of our strategy is to seek collaborations with partners, such as a large pharmaceutical organization, that are willing to further develop and commercialize a selected product candidate. To date, we have entered into a number of collaborative arrangements with cell therapy organizations. By entering into any such strategic collaborations, we may rely on our partner for financial resources and for development, regulatory and commercialization expertise. Our partner may fail to develop or effectively commercialize our product candidate because they: | | do not have sufficient resources or decide not to devote the necessary resources due to internal constraints such as limited cash or human resources; | | | | decide to pursue a competitive potential product developed outside of the collaboration; | | | 30 | | | | cannot obtain the necessary regulatory approvals; | | | | determine that the market opportunity is not attractive; or | | | | cannot manufacture or obtain the necessary materials in sufficient quantities from multiple sources or at a reasonable cost. | | We may not be able to enter into additional collaborations on acceptable terms, if at all. We face competition in our search for partners from other organizations worldwide, many of whom are larger and are able to offer more attractive deals in terms of financial commitments, contribution of human resources, or development, manufacturing, regulatory or commercial expertise and support. If we are not successful in attracting a partner and entering into a collaboration on acceptable terms, we may not be able to complete development of or commercialize any product candidate. In such event, our ability to generate revenues and achieve or sustain profitability would be significantly hindered and we may not be able to continue operations as proposed, requiring us to modify our business plan, curtail various aspects of our operations or cease operations. **Our success depends on our ability to protect our intellectual property and our proprietary technologies.** Our commercial success depends in part on our ability to obtain and maintain patent protection and trade secret protection for our product candidates, proprietary technologies, and their uses as well as our ability to operate without infringing upon the proprietary rights of others. We can provide no assurance that our patent applications or those of our licensors will result in additional patents being issued or that issued patents will afford sufficient protection against competitors with similar technologies, nor can there be any assurance that the patents issued will not be infringed, designed around or invalidated by third parties. Even issued patents may later be found unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. The degree of future protection for our proprietary rights is uncertain. Only limited protection may be available and may not adequately protect our rights or permit us to gain or keep any competitive advantage. Composition-of-matter patents on the biological or chemical active pharmaceutical ingredients are generally considered to offer the strongest protection of intellectual property and provide the broadest scope of patent protection for pharmaceutical products, as such patents provide protection without regard to any method of use or any method of manufacturing. While we have issued patents in the United States, we cannot be certain that the claims in our issued patent will not be found invalid or unenforceable if challenged. **We cannot be certain that the claims in our issued United States methods of use patents will not be found invalid or unenforceable if challenged.** We cannot be certain that the pending applications covering among others the bioconjugates comprising sulfated polysaccharides; Ranpirnase and other ribonucleases for treating viral diseases; therapeutic compositions comprising exosomes, bioxomes, and redoxomes; bioreactors for cell culture, automated devices for supporting cell therapies, and point-of-care systems; immune cells, ribonucleases, or antibodies for treating COVID-19; or chimeric antigen receptors (CARs); will be considered patentable by the United States Patent and Trademark Office (USPTO), and courts in the United States or by the patent offices and courts in foreign countries, nor can we be certain that the claims in our issued patents will not be found invalid or unenforceable if challenged. Even if our patent applications covering these inventions issue as patents, the patents protect specific products and may not be enforced against competitors making and marketing a product that has the same activity. Method-of-use patents protect the use of a product for the specified method or for treatment of a particular indication. These types of patents may not be enforced against competitors making and marketing a product that provides the same activity but is used for a method not included in the patent. Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products off-label. Although off-label prescriptions may infringe or contribute to the infringement of method-of-use patents, the practice is common and such infringement is difficult to prevent or prosecute. The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our future development partners will be successful in protecting our product candidates by obtaining and defending patents. These risks and uncertainties include the following: | | the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case; | | | 31 | | | | patent applications may not result in any patents being issued; | | | | patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; | | | | our competitors, many of whom have substantially greater resources and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use, and sell our potential product candidates; | | | | there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and | | | | countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates. | | In addition, we rely on the protection of our trade secrets and proprietary know-how. Although we have taken steps to protect our trade secrets and unpatented know-how, including entering into confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants and advisors, we cannot provide any assurances that all such agreements have been duly executed, and third parties may still obtain this information or may come upon this or similar information independently. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating its trade secrets. If any of these events occurs or if we otherwise lose protection for our trade secrets or proprietary know-how, our business may be harmed. **Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.** **** Our commercial success depends upon our ability and the ability of our collaborators to develop, manufacture, market and sell our product candidates and use our proprietary technologies without infringing, misappropriating or otherwise violating the intellectual property and proprietary rights of third parties. There is considerable patent and other intellectual property litigation in the pharmaceutical and biotechnology industries. We may become party to, or threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our technology and product candidates, including interference proceedings, post grant review, *inter partes* review, and derivation proceedings before the USPTO and similar proceedings in foreign jurisdictions such as oppositions before the European Patent Office. The legal threshold for initiating litigation or contested proceedings is low, so that even lawsuits or proceedings with a low probability of success might be initiated and require significant resources to defend. Litigation and contested proceedings can also be expensive and time-consuming, and our adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we can. The risks of being involved in such litigation and proceedings may increase if and as our product candidates near commercialization. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future, regardless of merit. We may not be aware of all such intellectual property rights potentially relating to our technology and product candidates and their uses, or we may incorrectly conclude that third party intellectual property is invalid or that our activities and product candidates do not infringe such intellectual property. Thus, we do not know with certainty that our technology and product candidates, or our development and commercialization thereof, do not and will not infringe, misappropriate or otherwise violate any third partys intellectual property. | 32 | | Third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to materials, formulations or methods, such as methods of manufacture or methods for treatment, related to the discovery, use or manufacture of the product candidates that we may identify or related to our technologies. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that the product candidates that we may identify may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. Moreover, as noted above, there may be existing patents that we are not aware of or that we have incorrectly concluded are invalid or not infringed by our activities. If any third-party patents were held by a court of competent jurisdiction to cover, for example, the manufacturing process of the product candidates that we may identify, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire. Generally, conducting clinical trials and other development activities in the United States is not considered an act of infringement. If and when products are approved by the FDA, that certain third party may then seek to enforce its patents by filing a patent infringement lawsuit against us or our licensee(s). In such lawsuit, we or our licensees may incur substantial expenses defending our rights or our licensees rights to commercialize such product candidates, and in connection with such lawsuit and under certain circumstances, it is possible that we or our licensees could be required to cease or delay the commercialization of a product candidate and/or be required to pay monetary damages or other amounts, including royalties on the sales of such products. Moreover, any such lawsuit may also consume substantial time and resources of our management team and board of directors. The threat or consequences of such a lawsuit may also result in royalty and other monetary obligations being imposed on us, which may adversely affect our results of operations and financial condition. Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize the product candidates that we may identify. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure. We may choose to take a license or, if we are found to infringe, misappropriate or otherwise violate a third partys intellectual property rights, we could also be required to obtain a license from such third party to continue developing, manufacturing and marketing our technology and product candidates. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us and could require us to make substantial licensing and royalty payments. We could be forced, including by court order, to cease developing, manufacturing and commercializing the infringing technology or product. In addition, we could be found liable for significant monetary damages, including treble damages and attorneys fees, if we are found to have willfully infringed a patent or other intellectual property right and could be forced to indemnify our customers or collaborators. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations, which could materially harm our business. In addition, we may be forced to redesign our product candidates, seek new regulatory approvals and indemnify third parties pursuant to contractual agreements. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar material adverse effect on our business, financial condition, results of operations and prospects. **If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.** We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if our product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even a successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in: | | decreased demand for our products; | | | 33 | | | | injury to our reputation; | | | | withdrawal of clinical trial participants and inability to continue clinical trials; | | | | initiation of investigations by regulators; | | | | costs to defend the related litigation; | | | | a diversion of managements time and our resources; | | | | substantial monetary awards to trial participants or patients; | | | | product recalls, withdrawals or labeling, marketing or promotional restrictions; | | | | loss of revenue; | | | | exhaustion of any available insurance and our capital resources; | | | | the inability to commercialize any product candidate; and | | | | a decline in our share price. | | Because most of our products have not reached commercial stage, we do not currently need to carry clinical trial or extensive product liability insurance. In the future, our inability to obtain additional sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop, alone or with collaborators. Such insurance policies may also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. **It may be difficult to enforce a U.S. judgment against us, our officers and directors and the foreign persons named in this Annual Report on Form 10-K in the United States or in foreign countries, or to assert U.S. securities laws claims in foreign countries or serve process on our officers and directors and these experts.** While we are incorporated in the State of Nevada, currently a majority of our directors and executive officers are not residents of the United States, and the foreign persons named in this Annual Report on Form 10-K are located outside of the United States. The majority of our assets are located outside the United States. Therefore, it may be difficult for an investor, or any other person or entity, to enforce a U.S. court judgment based upon the civil liability provisions of the U.S. federal securities laws against us or any of these persons in a U.S. or foreign court, or to effect service of process upon these persons in the United States. Additionally, it may be difficult for an investor, or any other person or entity, to assert U.S. securities law claims in original actions instituted in foreign countries in which we operate. Foreign courts may refuse to hear a claim based on a violation of U.S. securities laws on the grounds that foreign countries are not necessary the most appropriate forum in which to bring such a claim. Even if a foreign court agrees to hear a claim, it may determine that foreign law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by foreign countries laws. There is little binding case law in foreign countries addressing the matters described above. **We may be subject to numerous and varying privacy and security laws, and our failure to comply could result in penalties and reputational damage.** We are subject to laws and regulations covering data privacy and the protection of personal information, including health information. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues which may affect our business. In the U.S., numerous federal and state laws and regulations, including state security breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of personal information. Each of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues for us. If we fail to comply with applicable laws and regulations, we could be subject to penalties or sanctions, including criminal penalties if we knowingly obtain or disclose individually identifiable health information from a covered entity in a manner that is not authorized or permitted by the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, or HIPAA. | 34 | | Numerous other countries have, or are developing, laws governing the collection, use and transmission of personal information as well. The EU and other jurisdictions have adopted data protection laws and regulations, which impose significant compliance obligations. In the EU, for example, effective May 25, 2018, the EU General Data Protection Regulation (GDPR) replaced the prior EU Data Protection Directive (95/46) that governed the processing of personal data in the European Union. The GDPR imposes significant obligations on controllers and processors of personal data, including, as compared to the prior directive, higher standards for obtaining consent from individuals to process their personal data, more robust notification requirements to individuals about the processing of their personal data, a strengthened individual data rights regime, mandatory data breach notifications, limitations on the retention of personal data and increased requirements pertaining to health data, and strict rules and restrictions on the transfer of personal data outside of the EU, including to the U.S. The GDPR also imposes additional obligations on, and required contractual provisions to be included in, contracts between companies subject to the GDPR and their third-party processors that relate to the processing of personal data. The GDPR allows EU member states to make additional laws and regulations further limiting the processing of genetic, biometric or health data. Adoption of the GDPR increased our responsibility and liability in relation to personal data that we process and may require us to put in place additional mechanisms to ensure compliance. Any failure to comply with the requirements of GDPR and applicable national data protection laws of EU member states, could lead to regulatory enforcement actions and significant administrative and/or financial penalties against us (fines of up to Euro 20,000,000 or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher), and could adversely affect our business, financial condition, cash flows and results of operations. **We are increasingly dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity and data storage risks.** Significant disruptions to our information technology systems or breaches of information security could adversely affect our business. In the ordinary course of business, we collect, store and transmit confidential information, and it is critical that we do so in a secure manner in order to maintain the confidentiality and integrity of such confidential information. Our information technology systems are potentially vulnerable to service interruptions and security breaches from inadvertent or intentional actions by our employees, partners, vendors, or from attacks by malicious third parties. Maintaining the secrecy of this confidential, proprietary, and/or trade secret information is important to our competitive business position. While we have taken steps to protect such information and invested in information technology, there can be no assurance that our efforts will prevent service interruptions or security breaches in our systems or the unauthorized or inadvertent wrongful access or disclosure of confidential information that could adversely affect our business operations or result in the loss, dissemination, or misuse of critical or sensitive information. A breach of our security measures or the accidental loss, inadvertent disclosure, unapproved dissemination or misappropriation or misuse of trade secrets, proprietary information, or other confidential information, whether as a result of theft, hacking, or other forms of deception, or for any other cause, could enable others to produce competing products, use our proprietary technology and/or adversely affect our business position. Further, any such interruption, security breach, loss or disclosure of confidential information could result in financial, legal, business, and reputational harm to us and could have a material effect on our business, financial position, results of operations and/or cash flow. **There can be no assurance that we will be able to develop in-house sales and commercial distribution capabilities or establish or maintain relationships with third-party collaborators to successfully commercialize any product in the United States or overseas, and as a result, we may not be able to generate product revenue.** A variety of risks associated with operating our business internationally could materially adversely affect our business. We plan to seek regulatory approval of our product candidates outside of the United States and, accordingly, we expect that we, and any potential collaborators in those jurisdictions, will be subject to additional risks related to operating in foreign countries, including: | | differing regulatory requirements in foreign countries, unexpected changes in tariffs, trade barriers, price and exchange controls, and other regulatory requirements; | | | | economic weakness, including inflation, or political instability in particular foreign economies and markets; | | | | compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; | | | | foreign taxes, including withholding of payroll taxes; | | | | foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; | | | 35 | | | | difficulties staffing and managing foreign operations; | | | | workforce uncertainty in countries where labor unrest is more common than in the United States; | | | | potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign laws; | | | | challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; | | | | production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and | | | | business interruptions resulting from geo-political actions, including war, and terrorism or disease outbreaks. | | These and other risks associated with our planned international operations may materially adversely affect our ability to attain or maintain profitable operations. **If we are unable to integrate acquired businesses effectively, our operating results may be adversely affected.** From time to time, we seek to expand our business through acquisitions. We may not be able to successfully integrate acquired businesses and, where desired, their product portfolios into ours, and therefore we may not be able to realize the intended benefits. If we fail to successfully integrate acquisitions or product portfolios, or if they fail to perform as we anticipate, our existing businesses and our revenue and operating results could be adversely affected. If the due diligence of the operations of acquired businesses performed by us and by third parties on our behalf is inadequate or flawed, or if we later discover unforeseen financial or business liabilities, acquired businesses and their assets may not perform as expected. Additionally, acquisitions could result in difficulties assimilating acquired operations and, where deemed desirable, transitioning overlapping products into a single product line and the diversion of capital and managements attention away from other business issues and opportunities. The failure to integrate acquired businesses effectively may adversely impact our business, results of operations or financial condition. **Risks Related to Our Decentralized Production Units or OMPULs (DPU & Os)** **** **We may not be able to operate our DPU & Os in all cities or desired locations and the sizes and use of our laboratories in such DPU & Os may be restricted due to zoning, environmental, medical waste, or other licensing regulations.** **** We may be subject to local zoning ordinances or other similar restrictions that may limit where the DPU & Os can be located and the extent of their size and use. In addition, international, federal, state and local environmental and other administrative and licensing regulations could restrict the ability of the DPU & Os to connect with local power, water, sewer, and other infrastructure. Our success depends on our ability to develop and roll out our DPU & Os which may become more difficult or more expensive by such applicable regulations. Changes in any of these regulations could require us to close or move our DPU & Os which would affect our ability to conduct and grow our business. **If our existing DPU & O facilities become damaged or inoperable or if we are required to vacate our existing facilities, our ability to perform our tests and pursue our research and development efforts may be jeopardized.** **** We currently perform a majority of tests relating to our POCare Services out of our DPU & Os. Our facilities and equipment could be harmed or rendered inoperable by natural or man-made disasters, including war, fire, earthquake, power loss, communications failure or terrorism, which may render it difficult or impossible for us to operate for some period of time. In addition, since there is no lengthy history of use of DPU & Os and the DPU & Os are still in the development stage, we are unable to predict the normal wear and tear on such DPU & Os or how many years each DPU & Os will remain operational. The inability to perform our tests or to reduce the backlog that could develop if our facilities are inoperable, for even a short period of time, may result in the loss of customers or harm to our reputation, and we may be unable to regain those customers or repair our reputation. Furthermore, our DPU & O facilities and the equipment we use to perform our research and development work could be unavailable or costly and time-consuming to repair or replace. It would be difficult, time-consuming and expensive to rebuild our facilities, or to locate and qualify new facilities. | 36 | | We carry insurance for damage to our property and disruption of our business, but this insurance may not cover all of the risks associated with damage or disruption to our facility and business, may not provide coverage in amounts sufficient to cover our potential losses and may not continue to be available to us on acceptable terms, if at all. **Changes in the price and availability of our raw materials could be detrimental to our DPU & O operations.** Supply chain issues, including limited supply of certain raw material or supply interruptions, delays or shortages of material may disrupt our daily operations as the DPU & Os may be unable to retain an inventory of materials required to maintain operations or to build or repair such DPU & Os. **We are dependent on skilled human capital for our DPU & Os.** Our ability to innovate and execute is dependent on the ability to hire, replace, and train skilled personnel. The employment market suffers from shortage of candidates that may continue in future years and cause delays and inabilities to execute our plans. Additionally, based on current trends in the US labor market, there could be a shortage of available trained staff for the DPU & Os in the United States. Staff retention could also be a significant operational issue. **If we are unable to successfully secure our locations and premises, we may be unable to operate out of our DPU & Os or keep our employees and laboratory equipment safe.** In certain cities and urban markets, homelessness, rising crime rates and decreased police funding, could impact the security of the DPU & Os and the safety of employees and patients. If we are unable to successfully secure our DPU & Os, our research and development could be negatively impacted. **Our DPU & Os are operated in a heavily regulated industry, and changes in regulations or violations of regulations may, directly or indirectly, reduce our revenue, adversely affect our results of operations and financial condition, and harm our business.** The clinical laboratory testing industry is highly regulated, and there can be no assurance that the regulatory environment in which we operate will not change significantly and adversely to us in the future. Areas of the regulatory environment that may affect our ability to conduct our DPU & O business include, without limitation: | | federal and state laws governing laboratory testing, including CLIA, and state licensing laws; | | | | federal and state laws and enforcement policies governing the development, use and distribution of diagnostic medical devices, including laboratory developed tests, or LDTs; | | | | federal, state and local laws governing the handling and disposal of medical and hazardous waste; | | | | federal and state Occupational Safety and Health Administration rules and regulations; and | | | | European Union GMP approvals, which may be delayed because of the use DPU & Os which could then delay manufacturing for clinical trials. | | **** **Risks Related to Our Trans-Differentiation Technologies for Diabetes and the THM License Agreement** **THM is entitled to cancel the THM License Agreement.** Pursuant to the terms of the THM License Agreement with THM, Orgenesis Ltd, the Israeli Subsidiary (currently in liquidation proceedings), must develop, manufacture, sell and market the products pursuant to the milestones and time schedule specified in the development plan. In the event the Israeli Subsidiary fails to fulfill the terms of the development plan under the THM License Agreement, THM shall be entitled to terminate the THM License Agreement by providing the Israeli Subsidiary with written notice of such a breach and if the Israeli Subsidiary does not cure such breach within one year of receiving the notice. THM may also terminate the THM License Agreement if the Israeli Subsidiary breaches an obligation contained in the THM License Agreement and does not cure it within 180 days of receiving notice of the breach. We also run the risk that THM may attempt cancel or, at the very least challenge, the License Agreement with the Israeli Subsidiary as we continue to expand our focus to other therapies and business activities. While we have not received any notice of cancellation of the THM License Agreement, we have received an allegation regarding the scope of the rights by THM that may present future challenges for our Israeli Subsidiary to continue to develop, manufacture, sell and market the products pursuant to the milestones and time schedule specified in the development plan of the THM License Agreement. In addition, THM has filed a complaint against us in the Tel Aviv District Court relating to the scope of such THM license and the royalties and other payments that THM is entitled to thereunder. See Legal Proceedings in this Annual Report on Form 10-K. Such complaint may lead to further risk of cancellation of the THM License Agreement. | 37 | | The Israeli Subsidiary is a licensed technology that demonstrates the capacity to induce a shift in the developmental fate of cells from the liver and differentiating (converting) them into pancreatic beta cell-like insulin-producing cells for patients with diabetes. Our intention is to develop our technology to the clinical stage for regeneration of functional insulin-producing cells, thus enabling normal glucose regulated insulin secretion, via cell therapy. By using therapeutic agents that efficiently convert a sub-population of liver cells into pancreatic islets phenotype and function, this approach allows the diabetic patient to be the donor of his/her own therapeutic tissue and to start producing his/her own insulin in a glucose-responsive manner, thereby eliminating the need for insulin injections. Because this is a new approach to treating diabetes, developing and commercializing our product candidates subjects us to a number of challenges, including: | | obtaining regulatory approval regulatory authorities that have very limited experience with the commercial development of the trans-differentiating technology for diabetes; | | | | developing and deploying consistent and reliable processes for engineering a patients liver cells ex vivo and infusing the engineered cells back into the patient; | | | | developing processes for the safe administration of these products, including long-term follow-up for all patients who receive our products; | | | | sourcing clinical and, if approved, commercial supplies for the materials used to manufacture and process our products; | | | | developing a manufacturing process and distribution network with a cost of goods that allows for an attractive return on investment; | | | | establishing sales and marketing capabilities after obtaining any regulatory approval to gain market acceptance; and | | | | maintaining a system of post marketing surveillance and risk assessment programs to identify adverse events that did not appear during the drug approval process. | | **** **Risks Related to Development and Regulatory Approval of Our Therapies and Product Candidates** **** **Research and development of biopharmaceutical products is inherently risky.** We may not be successful in our efforts to use and enhance our technology platform to create a pipeline of product candidates and develop commercially successful products. Furthermore, we may expend our limited resources on programs that do not yield a successful product candidate and fail to capitalize on product candidates or diseases that may be more profitable or for which there is a greater likelihood of success. If we fail to develop additional product candidates, our commercial opportunity will be limited. Even if we are successful in continuing to build our pipeline, obtaining regulatory approvals and commercializing additional product candidates will require substantial additional funding and are prone to the risks of failure inherent in medical product development. Investment in biopharmaceutical product development involves significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, and become commercially viable. We cannot provide you any assurance that we will be able to successfully advance any of these additional product candidates through the development process. Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development or commercialization for many reasons, including the following: | | our platform may not be successful in identifying additional product candidates; | | | | we may not be able or willing to assemble sufficient resources to acquire or discover additional product candidates; | | | | our product candidates may not succeed in preclinical or clinical testing; | | | 38 | | | | a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; | | | | competitors may develop alternatives that render our product candidates obsolete or less attractive; | | | | product candidates we develop may nevertheless be covered by third parties patents or other exclusive rights; | | | | the market for a product candidate may change during our program so that the continued development of that product candidate is no longer reasonable; | | | | a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and | | | | a product candidate may not be accepted as safe and effective by patients, the medical community or third- party payers, if applicable. | | If any of these events occur, we may be forced to abandon our development efforts for a program or programs, or we may not be able to identify, discover, develop, or commercialize additional product candidates, which would have a material adverse effect on our business and could potentially cause us to cease operations. **** **Extensive industry regulation has had, and will continue to have, a significant impact on our business, especially our product development, manufacturing and distribution capabilities.** All pharmaceutical companies are subject to extensive, complex, costly and evolving government regulation. For the U.S., this is principally administered by the FDA and to a lesser extent by the Drug Enforcement Administration (DEA) and state government agencies, as well as by varying regulatory agencies in foreign countries where products or product candidates are being manufactured and/or marketed. The Federal Food, Drug and Cosmetic Act, the Controlled Substances Act and other federal statutes and regulations, and similar foreign statutes and regulations, govern or influence the testing, manufacturing, packing, labeling, storing, record keeping, safety, approval, advertising, promotion, sale and distribution of our future products. Under these regulations, we may become subject to periodic inspection of our facilities, procedures and operations and/or the testing of our future products by the FDA, the DEA and other authorities, which conduct periodic inspections to confirm that we are in compliance with all applicable regulations. In addition, the FDA and foreign regulatory agencies conduct pre-approval and post-approval reviews and plant inspections to determine whether our systems and processes are in compliance with current GMP and other regulations. Following such inspections, the FDA or other agency may issue observations, notices, citations and/or warning letters that could cause us to modify certain activities identified during the inspection. FDA guidelines specify that a warning letter is issued only for violations of regulatory significance for which the failure to adequately and promptly achieve correction may be expected to result in an enforcement action. We may also be required to report adverse events associated with our future products to FDA and other regulatory authorities. Unexpected or serious health or safety concerns would result in labeling changes, recalls, market withdrawals or other regulatory actions. The range of possible sanctions includes, among others, FDA issuance of adverse publicity, product recalls or seizures, fines, total or partial suspension of production and/or distribution, suspension of the FDAs review of product applications, enforcement actions, injunctions, and civil or criminal prosecution. Any such sanctions, if imposed, could have a material adverse effect on our business, operating results, financial condition and cash flows. Under certain circumstances, the FDA also has the authority to revoke previously granted drug approvals. Similar sanctions as detailed above may be available to the FDA under a consent decree, depending upon the actual terms of such decree. If internal compliance programs do not meet regulatory agency standards or if compliance is deemed deficient in any significant way, it could materially harm our business. The European Medicines Agency (EMA) will regulate our future products in Europe. Regulatory approval by the EMA will be subject to the evaluation of data relating to the quality, efficacy and safety of our future products for its proposed use. The time taken to obtain regulatory approval varies between countries. Different regulators may impose their own requirements and may refuse to grant, or may require additional data before granting, an approval, notwithstanding that regulatory approval may have been granted by other regulators. | 39 | | **** **Regulatory approval may be delayed, limited or denied for a number of reasons, including insufficient clinical data, the product not meeting safety or efficacy requirements or any relevant manufacturing processes or facilities not meeting applicable requirements.** Further trials and other costly and time-consuming assessments of the product may be required to obtain or maintain regulatory approval. Medicinal products are generally subject to lengthy and rigorous pre-clinical and clinical trials and other extensive, costly and time-consuming procedures mandated by regulatory authorities. We may be required to conduct additional trials beyond those currently planned, which could require significant time and expense. In addition, even after the technology approval, both in the U.S. and Europe, we will be required to maintain post marketing surveillance of potential adverse and risk assessment programs to identify adverse events that did not appear during the clinical studies and drug approval process. All of the foregoing could require an investment of significant time and expense. **We have generated limited revenue from therapeutic product sales, and our ability to generate any significant revenue from product sales and become profitable depends significantly on our success in a number of factors.** We have a limited number of therapeutic products approved for commercial sale, and we have generated only limited revenue from product sales. Our ability to generate revenue of more significant scale and achieve profitability depends significantly on our success in many factors, including: | | completing research regarding, and nonclinical and clinical development of, our product candidates; | | | | obtaining regulatory approvals and marketing authorizations for product candidates for which we complete clinical studies; | | | | developing a sustainable and scalable manufacturing process for our product candidates, including establishing and maintaining commercially viable supply relationships with third parties and establishing our own manufacturing capabilities and infrastructure; | | | | launching and commercializing product candidates for which we obtain regulatory approvals and marketing authorizations, either directly or with a collaborator or distributor; | | | | obtaining market acceptance of our product candidates as viable treatment options; | | | | addressing any competing technological and market developments; | | | | identifying, assessing, acquiring and/or developing new product candidates; | | | | negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter; | | | | maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents, trade secrets, and know-how; and | | | | attracting, hiring, and retaining qualified personnel. | | Even if more of the product candidates that we develop are approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate. Our expenses could increase beyond expectations if we are required by the U.S. Food and Drug Administration, or the FDA, or other regulatory agencies, domestic or foreign, to change our manufacturing processes or assays, or to perform clinical, nonclinical, or other types of studies in addition to those that we currently anticipate. If we are successful in obtaining regulatory approvals to market more of our product candidates, our revenue will be dependent, in part, upon the size of the markets in the territories for which we gain regulatory approval, the accepted price for the product, the ability to get reimbursement at any price, and whether we own the commercial rights for that territory. If the number of our addressable disease patients is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products, even if approved. If we are not able to generate revenue from the sale of any approved products, we may never become profitable. **When we commence any clinical trials, we may not be able to conduct our trials on the timelines we expect.** Clinical testing is expensive, time consuming, and subject to uncertainty. We cannot guarantee that any clinical studies will be conducted as planned or completed on schedule, if at all. We cannot be sure that we will be able to submit an IND, and we cannot be sure that submission of an IND will result in the FDA allowing clinical trials to begin. Moreover, even if these trials begin, issues may arise that could suspend or terminate such clinical trials. A failure of one or more clinical studies can occur at any stage of testing, and our future clinical studies may not be successful. Events that may prevent successful or timely completion of clinical development include: | | the inability to generate sufficient preclinical or other in vivo or in vitro data to support the initiation of clinical studies; | | | 40 | | | | delays in reaching a consensus with regulatory agencies on study design; | | | | delays in establishing CMC (Chemistry, Manufacturing, and Controls) which is a cornerstone in clinical study submission and later on, the regulatory approval; | | | | the FDA not allowing us to use the clinical trial data from a research institution to support an IND if we cannot demonstrate the comparability of our product candidates with the product candidate used by the relevant research institution in its clinical studies; | | | | delays in obtaining required Institutional Review Board, or IRB, approval at each clinical study site; | | | | imposition of a temporary or permanent clinical hold by regulatory agencies for a number of reasons, including after review of an IND application or amendment, or equivalent application or amendment; | | | | a result of a new safety finding that presents unreasonable risk to clinical trial participants; | | | | a negative finding from an inspection of our clinical study operations or study sites; | | | | developments on trials conducted by competitors for related technology that raises FDA concerns about risk to patients of the technology broadly; | | | | if the FDA finds that the investigational protocol or plan is clearly deficient to meet its stated objectives; | | | | delays in recruiting suitable patients to participate in our clinical studies; | | | | difficulty collaborating with patient groups and investigators; | | | | failure to perform in accordance with the FDAs current good clinical practices, or cGCPs, requirements, or applicable regulatory guidelines in other countries; | | | | delays in having patients complete participation in a study or return for post-treatment follow-up; | | | | patients dropping out of a study; | | | | occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits; | | | | changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; | | | | changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; | | | | the cost of clinical studies of our product candidates being greater than we anticipate; | | | | clinical studies of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical studies or abandon product development programs; and | | | | delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical studies or the inability to do any of the foregoing. | | Any inability to successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to generate revenue. In addition, if we make manufacturing or formulation changes to our product candidates, we may be required to, or we may elect to conduct additional studies to bridge our modified product candidates to earlier versions. Clinical study delays could also shorten any periods during which our products have patent protection and may allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business and results of operations. Our clinical trial results may also not support approval, whether accelerated approval, conditional marketing authorizations, or regular approval. The results of preclinical and clinical studies may not be predictive of the results of later-stage clinical trials, and product candidates in later stages of clinical trials may fail to show the desired safety and efficacy despite having progressed through preclinical studies and initial clinical trials. In addition, our product candidates could fail to receive regulatory approval for many reasons, including the following: | | the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; | | | | the population studied in the clinical program may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; | | | | we may be unable to demonstrate that our product candidates risk-benefit ratios for their proposed indications are acceptable; | | | 41 | | | | the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; | | | | we may be unable to demonstrate that the clinical and other benefits of our product candidates outweigh their safety risks; | | | | the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; | | | | the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to obtain regulatory approval in the United States or elsewhere; | | | | the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, our own manufacturing facilities, or our third-party manufacturers facilities with which we contract for clinical and commercial supplies; and | | | | the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval. | | **Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences.** As with most biological drug products, use of our product candidates could be associated with side effects or adverse events which can vary in severity from minor reactions to death and in frequency from infrequent to prevalent. Any of these occurrences may materially and adversely harm our business, financial condition and prospects. **Our product candidates are biologics, and the manufacture of our product candidates is complex, and we may encounter difficulties in production, particularly with respect to process development or scaling-out of our manufacturing capabilities.** If we encounter such difficulties, our ability to provide supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or stopped, or we may be unable to maintain a commercially viable cost structure. Our product candidates are biologics and the process of manufacturing our products is complex, highly regulated and subject to multiple risks. As a result of the complexities, the cost to manufacture biologics is generally higher than traditional small molecule chemical compounds, and the manufacturing process is less reliable and is more difficult to reproduce. Our manufacturing process will be susceptible to product loss or failure due to logistical issues associated with the collection of liver cells, or starting material, from the patient, shipping such material to the manufacturing site, shipping the final product back to the patient, and infusing the patient with the product, manufacturing issues associated with the differences in patient starting materials, interruptions in the manufacturing process, contamination, equipment or reagent failure, improper installation or operation of equipment, vendor or operator error, inconsistency in cell growth, failures in process testing and variability in product characteristics. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects, and other supply disruptions. If for any reason we lose a patients starting material or later-developed product at any point in the process, the manufacturing process for that patient will need to be restarted and the resulting delay may adversely affect that patients outcome. If microbial, viral, or other contaminations are discovered in our product candidates or in the manufacturing facilities in which our product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. Because our product candidates are manufactured for each particular patient, we will be required to maintain a chain of identity and tractability of all reagents and viruses involved in the process with respect to materials as they move from the patient to the manufacturing facility, through the manufacturing process, and back to the patient. Maintaining such a chain of identity is difficult and complex, and failure to do so could result in adverse patient outcomes, loss of product, or regulatory action including withdrawal of our products from the market. Further, as product candidates are developed through preclinical to late-stage clinical trials towards approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, are altered along the way in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives, and any of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials. | 42 | | Although we are working to develop commercially viable processes, doing so is a difficult and uncertain task, and there are risks associated with scaling to the level required for advanced clinical trials or commercialization, including, among others, cost overruns, potential problems with process scale-out, process reproducibility, stability issues, lot consistency, and timely availability of reagents or raw materials. We may ultimately be unable to reduce the cost of goods for our product candidates to levels that will allow for an attractive return on investment if and when those product candidates are commercialized. In addition, the manufacturing process for any products that we may develop is subject to FDA and foreign regulatory authority approval process, and we will need to contract with manufacturers who can meet all applicable FDA and foreign regulatory authority requirements on an ongoing basis. If we are unable to reliably produce products to specifications acceptable to the FDA or other regulatory authorities, we may not obtain or maintain the approvals we need to commercialize such products. Even if we obtain regulatory approval for any of our product candidates, there is no assurance that either we or our subsidiaries and joint ventures will be able to manufacture the approved product to specifications acceptable to the FDA or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the product, or to meet potential future demand. Any of these challenges could delay completion of clinical trials, require bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidate, impair commercialization efforts, increase our cost of goods, and have an adverse effect on our business, financial condition, results of operations and growth prospects. The manufacture of biological drug products is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of biologic products often encounter difficulties in production, particularly in scaling up or out, validating the production process, and assuring high reliability of the manufacturing process (including the absence of contamination). These problems include logistics and shipping, difficulties with production costs and yields, quality control, including stability of the product, product testing, operator error, availability of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations. Furthermore, if contaminants are discovered in our supply of our product candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. We cannot assure you that any stability failures or other issues relating to the manufacture of our product candidates will not occur in the future. Additionally, our manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments. If our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide our product candidate to patients in clinical trials would be jeopardized. Any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to begin new clinical trials at additional expense or terminate clinical trials completely. **Cell-based therapies rely on the availability of reagents, specialized equipment, and other specialty materials, which may not be available to us on acceptable terms or at all. For some of these reagents, equipment, and materials, we rely or may rely on sole source vendors or a limited number of vendors, which could impair our ability to manufacture and supply our products.** Manufacturing our product candidates will require many reagents and viruses, which are substances used in our manufacturing processes to bring about chemical or biological reactions, and other specialty materials and equipment, some of which are manufactured or supplied by small companies with limited resources and experience to support commercial biologics production. We currently depend on a limited number of vendors for certain materials and equipment used in the manufacture of our product candidates. Some of these suppliers may not have the capacity to support commercial products manufactured under GMP by biopharmaceutical firms or may otherwise be ill-equipped to support our needs. We also do not have supply contracts with many of these suppliers and may not be able to obtain supply contracts with them on acceptable terms or at all. Accordingly, we may experience delays in receiving key materials and equipment to support clinical or commercial manufacturing. For some of these reagents, viruses, equipment, and materials, we rely and may in the future rely on sole source vendors or a limited number of vendors. An inability to continue to source product from any of these suppliers, which could be due to regulatory actions or requirements affecting the supplier, adverse financial or other strategic developments experienced by a supplier, labor disputes or shortages, unexpected demands, or quality issues, could adversely affect our ability to satisfy demand for our product candidates, which could adversely and materially affect our product sales and operating results or our ability to conduct clinical trials, either of which could significantly harm our business. | 43 | | As we continue to develop and scale our manufacturing process, we expect that we will need to obtain rights to and supplies of certain materials and equipment to be used as part of that process. We may not be able to obtain rights to such materials on commercially reasonable terms, or at all, and if we are unable to alter our process in a commercially viable manner to avoid the use of such materials or find a suitable substitute, it would have a material adverse effect on our business. **There can be no assurance that we will be able to further develop in-house sales and commercial distribution capabilities or establish or maintain relationships with third-party collaborators to successfully commercialize any product in the United States or overseas, and as a result, we may not be able to generate product revenue.** A variety of risks associated with operating our business internationally could materially adversely affect our business. We plan to seek regulatory approval of our product candidates outside of the United States and, accordingly, we expect that we, and any potential collaborators in those jurisdictions, will be subject to additional risks related to operating in foreign countries, including: | | differing regulatory requirements in foreign countries, unexpected changes in tariffs, trade barriers, price and exchange controls, and other regulatory requirements; | | | | economic weakness, including inflation, or political instability in particular foreign economies and markets; | | | | compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; | | | | foreign taxes, including withholding of payroll taxes; | | | | foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; | | | | difficulties staffing and managing foreign operations; | | | | workforce uncertainty in countries where labor unrest is more common than in the United States; | | | | potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign laws; | | | | challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; | | | | production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and | | | | business interruptions resulting from geo-political actions, including war and terrorism. | | These and other risks associated with our planned international operations may materially adversely affect our ability to attain or maintain profitable operations. **We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.** The biopharmaceutical industry, and the rapidly evolving market for developing cell-based therapies is characterized by intense competition and rapid innovation. Our competitors may be able to develop other compounds or drugs that are able to achieve similar or better results. Our potential competitors include major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, and other research institutions. Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations as well as established sales forces. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer, more easily commercialized, or less costly than our product candidates or may develop proprietary technologies or secure patent protection that we may need for the development of our technologies and products. | 44 | | **** **We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.** Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract, motivate and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on our senior management, particularly our Chief Executive Officer, Vered Caplan. The loss of the services of any of our executive officers, other key employees, and other scientific and medical advisors, and our inability to find suitable replacements, could result in delays in product development and harm our business. Competition for skilled personnel is intense and the turnover rate can be high, which may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all. To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided stock option grants that vest over time. The value to employees of these equity grants that vest over time may be significantly affected by movements in our stock price that are beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies. Although we have employment agreements with our key employees, most these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice. We do not maintain key man insurance policies on the lives of all of these individuals or the lives of any of our other employees. **Risks Related to our Common Stock** **Our common stock has been delisted from Nasdaq.** **** Our common stock was delisted from the Nasdaq Capital Market in October 2024. Following the delisting of our common stock from the Nasdaq Capital Market, our common stock began trading on the OTCQX operated by OTC Markets beginning on October 21, 2024. On June 3, 2025, following delays in our Exchange Act filings and the expiration of the applicable grace period, OTC Markets moved the trading of our common stock from OTCQX to the Pink Limited tier. On July 29, 2025, due to further delays in our Exchange Act filings, OTC Markets moved the trading of our common stock from OTC Pink Limited to the OTC Expert Market tier. As a result of the delisting of our securities, we and our stockholders could face significant material adverse consequences including: a limited availability of market quotations for our shares; reduced liquidity for our shares; a determination that our Common Stock is a penny stock which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our shares; a limited amount of news and analyst coverage; a decreased ability to issue additional securities or obtain additional financing in the future, including due to our inability to use a Form S-3 for a shelf financing; a loss of interest from institutional investors, which may further decrease liquidity and market visibility; and a loss of confidence among customers, vendors, suppliers, and employees, which could negatively impact our business operations and future prospects. Trading on the OTC Markets is often thin, volatile, and sporadic, leading to wide fluctuations in trading prices that may not reflect the companys actual operating performance. These factors can also impair our ability to raise additional capital through public or private sales of equity securities, as well as limit our ability to use our securities as consideration for acquisitions or investments. | 45 | | **** **We have not been able, and may continue to be unable, to timely file periodic reports with the SEC.** We were not able to file this annual report on Form 10-K for the year ended December 31, 2024 with the SEC within the time period specified by the Exchange Act, due in part to having insufficient funds to service our operations, expenses and other liquidity needs, including the retention of services providers necessary to assist in the preparation and review of our financial statements and periodic reports. If we are not able to file our future periodic reports in the time specified by the Exchange Act, stockholders and potential investors will not have current public information about us, which will likely have a negative effect on our ability to obtain future capital. Failure to make timely filings also impairs our ability to conduct certain kinds of public offerings on short form registration statements that provide more efficient automatic forward incorporation of future SEC filings. More broadly, our inability to maintain current public information pursuant to SEC and OTC reporting rules will have a negative impact on how we are viewed by our stockholders, potential financing sources, the investing public and strategic and commercial parties with whom we do business. Failure to maintain current public information is in circumvention of certain contractual obligations of the Company and could result in an event of default under certain of our indebtedness. Additionally, if our SEC filing delinquencies are prolonged, the SEC could institute administrative proceedings to revoke our registration under the Exchange Act and suspend the trading of our common stock. Our inability to timely file periodic reports now and in the future could materially and adversely affect our continuing business and operations, as well as our future business growth and financial condition. **If we issue additional shares of common stock in the future, it will result in the dilution of our existing stockholders.** Our articles of incorporation authorize the issuance of up to 14,583,333 shares of our common stock with a par value of $0.0001 per share. Pursuant to the Convertible Loan Agreement for a credit facility of up to $10,000,000, dated as of September 10, 2025, by and among Theracell Laboratories IKE (Theracell), a subsidiary of Octomera LLC, which is a subsidiary of Orgenesis Inc., and Alpha Prosperity Fund SPC, acting on behalf of and for the account of Segregated Portfolio P (the Lender), the Lender has the option, at its sole discretion, to convert the outstanding amount of the loan (currently, $10,000,000 drawn under the credit facility as well as $775,000 paid over and above the $10,000,000 credit line amount) into equity of either us or Theracell, such that the Lender would hold up to 80% of the outstanding share capital of the applicable entity. The conversion of the loan into our shares is subject to shareholder approval of the issuance of the required shares. In addition, the Agreement provides that the Lender will be issued a warrant to purchase 15% of the fully diluted share capital of either us or Theracell, at the Lenders discretion, for an aggregate exercise price of $250,000 and exercisable for three years from issuance. The issuance of shares upon exercise of the warrant is likewise subject to shareholder approval of the issuance of such shares. Additional warrants would be issued in connection with each cumulative drawdown of an additional $1,000,000 under the credit facility. Accordingly, the issuance of shares of common stock pursuant to the Convertible Loan Agreement and warrants referenced above would have the following effects: our existing stockholders proportionate ownership interest in us will decrease significantly and it would trigger a change of control of our company; the amount of cash available per share, including for payment of dividends (if any) in the future, may decrease; the relative voting strength of each previously outstanding share of our common stock may be diminished; and the market price of shares of our common stock may decline. In addition, our Board of Directors may choose to issue shares to acquire one or more companies or products and to fund our overhead and general operating requirements. The issuance of any such shares will reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current stockholders. Further, such issuance may result in a change of control of our company. **If the Lender converts its outstanding loan amount into shares representing up to 80% of our outstanding common stock, the Lender could significantly influence the outcome of our corporate matters.** **** If the Lender elects to convert its outstanding loan amount into shares of our common stock representing up to 80% of our outstanding shares and/or exercise its warrants to purchase 15% of our fully diluted share capital, the Lender could, as a result, have the ability to exercise significant influence over all matters that require us to obtain shareholder approval, including the election of directors to our board and approval of significant corporate transactions that we may consider, such as a merger or sale of our company or its assets. This concentration of ownership in our shares by the Lender could limit other shareholders ability to influence corporate matters and may have the effect of delaying or preventing a third party from acquiring control over us. | 46 | | **** **Our stock price and trading volume may be volatile, which could result in losses for our stockholders.** The equity trading markets have recently experienced high volatility resulting in highly variable and unpredictable pricing of equity securities. If the turmoil in the equity trading markets continues, the market for our common stock could change in ways that may not be related to our business, our industry or our operating performance and financial condition. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include: | | actual or anticipated quarterly variations in our operating results; | | | | changes in expectations as to our future financial performance or changes in financial estimates, if any; | | | | announcements relating to our business; | | | | conditions generally affecting the biotechnology industry; | | | | the success of our operating strategy; and | | | | the operating and stock performance of other comparable companies. | | Many of these factors are beyond our control, and we cannot predict their potential effects on the price of our common stock. In addition, the stock market is subject to extreme price and volume fluctuations. During the 52 weeks ended December 31, 2024, our stock price has fluctuated from a low of $ 0.89 to a high of $10. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock. No assurance can be provided that a purchaser of our common stock will be able to resell their shares of common stock at or above the price that they acquired those shares. We can provide no assurances that the market price of common stock will increase or that the market price of common stock will not fluctuate or decline significantly. **** **We do not intend to pay dividends on any investment in the shares of stock of our company.** We have never paid any cash dividends, and currently do not intend to pay any dividends for the foreseeable future. The Board of Directors has not directed the payment of any dividends and does not anticipate paying dividends on the shares for the foreseeable future and intends to retain any future earnings to the extent necessary to develop and expand our business. Payment of cash dividends, if any, will depend, among other factors, on our earnings, capital requirements, and the general operating and financial condition, and will be subject to legal limitations on the payment of dividends out of paid-in capital. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stocks price. This may never happen, and investors may lose all of their investment in our company. **We have identified material weaknesses in our internal control over financial reporting. Failure to achieve and maintain effective internal controls over financial reporting could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner, which could have an adverse impact on our business.** Ensuring that we have adequate internal financial and accounting controls and procedures in place to produce accurate financial statements on a timely basis has been, and will continue to be, costly and a time-consuming effort. In addition, the rapid changes in our operations and corporate structure have created a need for additional resources within the accounting and finance functions in order to produce timely financial information and to ensure the level of segregation of duties customary for a U.S. public company. Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States (GAAP). Our management is also required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weakness identified. As described in Item 9A of this Annual Report on Form 10-K, there were several material weaknesses identified in our internal control over financial reporting. We are working to remediate our material weaknesses as soon as practicable. Our remediation plan, which is continuing to be developed, can only be accomplished over time, and these initiatives may not accomplish their intended effects. Failure to maintain our internal control over financial reporting could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis or result in misstatements. Likewise, if our financial statements are not filed on a timely basis, we could be subject to regulatory actions, legal proceedings or investigations by FINRA, the SEC or other regulatory authorities, which could result in a material adverse effect on our business and/or we may not be able to maintain compliance with certain of our agreements. Ineffective internal controls could also cause investors to lose confidence in our financial reporting, which could have a negative effect on our stock price, business strategies and ability to raise capital. Management does not expect that our internal controls will ever prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control systems objectives will be met. No evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the business will have been detected. | 47 | | ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable. ITEM 1C. CYBERSECURITY **Cybersecurity** We recognize the critical importance of maintaining the trust and confidence of customers, clients, patients, business partners and employees toward our business and are committed to protecting the confidentiality, integrity and availability of our business operations and systems. Our board of directors is actively involved in oversight of our risk management activities, and cybersecurity represents an important element of our overall approach to risk management. Our cybersecurity policies, standards, processes and practices are based on recognized frameworks established by our cybersecurity consultants and other applicable industry standards. In general, we seek to address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security and availability of the information that we collect and store by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur. **Cybersecurity Risk Management and Strategy; Effect of Risk** **** We face risks related to cybersecurity such as unauthorized access, cybersecurity attacks and other security incidents, including those perpetrated by hackers and unintentional disruptions to hardware and software systems, loss of data, and misappropriation of confidential information. To identify and assess material risks from cybersecurity threats, we maintain a comprehensive cybersecurity program to ensure our systems are effective and prepared for information security risks, including regular oversight of our programs for security monitoring for internal and external threats to ensure the confidentiality and integrity of our information assets. We consider risks from cybersecurity threats alongside other company risks as part of our overall risk assessment process. We employ a range of tools and services, including regular network and endpoint monitoring, audits, vulnerability assessments, penetration testing, threat modelling and tabletop exercises to inform our risk identification and assessment. As discussed in more detail under Cybersecurity Governance below, our board of directors provides oversight of our cybersecurity risk management and strategy processes, which are led by our Chief Executive Officer. We also identify our cybersecurity threat risks by comparing our processes to standards set by the Center for Internet Security (CIS) as well as by engaging experts to attempt to infiltrate our information systems. To provide for the availability of critical data and systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against and respond to cybersecurity incidents, we undertake the following activities: We also identify our cybersecurity threat risks by comparing our processes to standards set by the Center for Internet Security (CIS) as well as by engaging experts to attempt to infiltrate our information systems. We utilize Microsoft Security tools to facilitate our CIS assessments, ensuring alignment with industry best practices and enhancing our security posture. | 48 | | To provide for the availability of critical data and systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against and respond to cybersecurity incidents, we undertake the following activities: | | | Monitor emerging data protection laws and implement changes to our processes designed to comply with such laws and implement the latest Center for Internet Security benchmarks to comply with up-to-date requirements using Microsoft Compliance Manager and Azure Security Center. | | | | | Through our policies, practices, and contracts (as applicable), require employees, as well as third parties that provide services on our behalf, to treat confidential information and data with care, including using policies such as right to know and right to access with granular access to confidential information, managed via Microsoft Azure Active Directorys Role-Based Access Control (RBAC). | | | | | Employ technical safeguards designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence using Microsoft Defender for Endpoint and Microsoft Sentinel for active threat hunting and alerts monitoring by cybersecurity operators, threat analytics, endpoint management, and application evaluations. | | | | | Provide regular, mandatory training for our employees and contractors regarding cybersecurity threats as a means to equip them with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices. | | | | | Conduct regular phishing email simulations for all employees and contractors with access to our email systems to enhance awareness and responsiveness to possible threats, including built-in tools for phishing campaigns and attack simulators, and usage of sandbox environments to evaluate threats. | | | | | Conduct annual cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data. | | | | | Run tabletop exercises to simulate responses to cybersecurity incidents and use the findings to improve our processes and technologies. | | | | | Leverage the NIST incident handling framework to help us identify, protect, detect, respond and recover when there is an actual or potential cybersecurity incident. | | | | | Carry information security risk insurance that provides protection against potential losses arising from a cybersecurity incident. | | Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including our suppliers and manufacturers who have access to patient and employee data or our systems. In addition, cybersecurity considerations affect the selection and oversight of our third-party service providers. We perform diligence on third parties that have access to our systems, data, or facilities that house such systems or data, and continually monitor cybersecurity threat risks identified through such diligence. Additionally, we generally require those third parties that could introduce significant cybersecurity risk to us to agree by contract to manage their cybersecurity risks in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate. We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading We are increasingly dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity and data storage risks. Such disclosures are incorporated by reference herein. In the last three fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial. This includes penalties and settlements, of which there were none. | 49 | | **** **Cybersecurity Governance; Management** Cybersecurity is an important part of our risk management processes and an area of focus for our board of directors and management. In general, our board of directors oversees risk management activities designed and implemented by our management, and considers specific risks, including, for example, risks associated with our strategic plan, business operations, and capital structure. Our board of directors executes its oversight responsibility for risk management both directly and through delegating oversight of certain of these risks to its committees, and our board of directors has authorized our audit committee to oversee risks from cybersecurity threats. Our board of directors receives an annual update, and more often if required, from management of our cybersecurity threat risk management and strategy processes. These updates cover topics such as our data security posture, results from third-party assessments, progress toward pre-determined risk-mitigation-related goals, our incident response plan, and material cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks. In these sessions, our board of directors generally receives a report that includes cybersecurity details and other materials discussing current and emerging material cybersecurity threat risks, and describing our ability to mitigate those risks, as well as recent developments, evolving standards, technological developments and information security considerations arising with respect to our peers and third parties. Management also discusses such matters with our Chief Executive Officer. Our board of directors also receives prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed. Members of the board of directors are also encouraged to regularly engage in conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs. Material cybersecurity threat risks are also considered during separate board meeting discussions of important matters like enterprise risk management, operational budgeting, business continuity planning, mergers and acquisitions, brand management, and other relevant matters. Our cybersecurity risk management and strategy processes, which are discussed in greater detail above, are led by our Chief Executive Officer and our external cybersecurity consultants. These consultants are informed about, and monitor, the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of and participation in the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan. As discussed above, these consultants report to management about cybersecurity threat risks, among other cybersecurity-related matters, at least annually. ITEM 2. PROPERTIES We do not own any real property. A description of the leased premises we utilize in several of our facilities is as follows: | Entity | | Property Description | | | | | | | | | Orgenesis Inc. | | | Our principal office is located at 20271 Goldenrod Lane, Germantown, MD 20876. | | | | | | | | | Orgenesis Maryland LLC | | | FastForward laboratory and office located at 1812 Ashland Ave, Baltimore, Maryland 21205. | | | | | | Natick, Massachusetts | | | | | | | | | Mida Biotech BV | | Laboratories and offices located in Leiden, The Netherlands | | | 50 | | We believe that our facilities are generally in good condition and suitable to carry on our business. We also believe that, if required, suitable alternative or additional space will be available to us on commercially reasonable terms. ITEM 3. LEGAL PROCEEDINGS [See note 23](#SL_01) of Item 8 of this Annual Report on Form 10-K for details of pending legal proceedings. Except as described therein, we are not involved in any pending material legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES *Market Information* From March 18, 2018 until October 20, 2024, our common stock was listed for trading on the Nasdaq Capital Market. Our common stock was delisted from the Nasdaq Capital Market in October 2024. Following the delisting of our common stock from the Nasdaq Capital Market, our common stock began trading on the OTCQX operated by OTC Markets beginning on October 21, 2024. On June 3, 2025, following delays in our Exchange Act filings and the expiration of the applicable grace period, OTC Markets moved the trading of our common stock from OTCQX to the Pink Limited tier. On July 29, 2025, due to further delays in our Exchange Act filings, OTC Markets moved the trading of our common stock from OTC Pink Limited to the OTC Expert Market tier. As a result, public access to bid and ask prices and trading volume information became restricted, and most investors are not able to easily trade our common stock during this period. Despite these developments, our common stock remains tradable, with pricing information accessible to brokers and market makers. We are actively working to complete and file all required periodic reports to regain compliance with our Exchange Act reporting obligations. We intend to reapply for listing on the OTCQX Market as soon as we become current in our SEC filings. Our common stock is currently traded on the OTC Expert Market under the symbol ORGS. As of March 26, 2026, there were 248 holders of record of our common stock, and the last reported sale price of our common stock on the OTC Expert on March 26, 2026 was $0.58. A significant number of shares of our common stock are held in either nominee name or street name brokerage accounts, and consequently, we are unable to determine the total number of beneficial owners of our common stock. *Dividend Policy* To date, we have paid no dividends on our common stock and do not expect to pay cash dividends in the foreseeable future. We plan to retain all earnings to provide funds for the operations of our company. In the future, our Board of Directors will decide whether to declare and pay dividends based upon our earnings, financial condition, capital requirements, and other factors that our Board of Directors may consider relevant. We are not under any contractual restriction as to present or future ability to pay dividends. *Unregistered Sales of Equity Securities* On April 5, 2024, the Company entered into a loan agreement with a lender. In consideration for the loan agreement, the Company agreed to issue warrants to purchase up to 21,875 shares of Common Stock at an exercise price of $8 which vested upon issuance. These warrants and the shares of Common Stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended. | 51 | | On April 7, 2024, the Company entered into a loan agreement with a lender. In consideration for the loan agreement, the Company agreed to issue warrants to purchase up to 15,625 shares of Common Stock at an exercise price of $8 which vested upon issuance. These warrants and the shares of Common Stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended. On July 14, 2024, the Company entered into a strategic advisor agreement with an individual relating to the provision of strategic advice and assistance to the Company for a term of 12 months. In consideration for such services, the Company agreed to issue warrants to purchase up to 20,000 shares of Common Stock at an exercise price of $10.30, which vests one third on July 14, 2024, one third on October 14, 2024, and one third on January 14, 2025. These warrants and the shares of Common Stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended. On August 15, 2024, the Company entered into a payment deferral agreement with a vendor relating to the deferral of payments to the vendor. In consideration for such deferral, the Company agreed to issue warrants to purchase up to 42,464 shares of Common Stock at an exercise price of $10.30, which vested upon issuance. These warrants and the shares of Common Stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended. On August 21, 2024, the Company entered into a loan agreement with a lender. In consideration for the loan agreement, the Company agreed to issue warrants to purchase up to 24,272 shares of Common Stock at an exercise price of $10.30 which vested upon issuance. These warrants and the shares of Common Stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended. On September 5, 2024, the Company entered into a strategic advisor agreement with an individual relating to the provision of strategic advice and assistance to the Company for a term of 12 months. In consideration for such services, the Company agreed to issue 50,000 shares of Common Stock. These shares of Common Stock were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended. On September 6, 2024, the Company entered into a loan agreement with a lender. In consideration for the loan agreement, the Company agreed to issue warrants to purchase up to 24,272 shares of Common Stock at an exercise price of $10.30 which vested upon issuance. These warrants and the shares of Common Stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended. On September 9, 2024, the Company entered into a loan agreement with a lender. In consideration for the loan agreement, the Company agreed to issue warrants to purchase up to 24,272 shares of Common Stock at an exercise price of $10.30 which vested upon issuance. These warrants and the shares of Common Stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended. On September 10, 2024, the Company entered into a loan agreement with a lender. In consideration for the loan agreement, the Company agreed to issue warrants to purchase up to 1,942 shares of Common Stock at an exercise price of $10.30 which vested upon issuance. These warrants and the shares of Common Stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended. On September 17, 2024, the Company entered into a loan agreement with a lender. In consideration for the loan agreement, the Company agreed to issue warrants to purchase up to 24,272 shares of Common Stock at an exercise price of $10.30 which vested upon issuance. These warrants and the shares of Common Stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended. | 52 | | On September 21, 2024, the Company entered into a payment deferral agreement with a vendor relating to the deferral of payments to the vendor. In consideration for such deferral, the Company agreed to issue warrants to purchase up to 3,496 shares of Common Stock at an exercise price of $10.30, which vested upon issuance. These warrants and the shares of Common Stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended. **** On September 30, 2024, the Company entered into a loan agreement with a lender. In consideration for the loan agreement, the Company agreed to issue warrants to purchase up to 14,563 shares of Common Stock at an exercise price of $10.30 which vested upon issuance. These warrants and the shares of Common Stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended. On October 31, 2024, Koligo and the Company entered into a loan extension agreement with a lender. In consideration for the extension, (i) the Company agreed to issue a warrant to the lender for the right to purchase 200,000 shares of common stock, at an exercise price per share of $1.03 per share, which is exercisable until one year from the new maturity date of the loan, and (ii) the Company agreed to reduce the exercise price of warrants to purchase an aggregate of 331,327 shares of common stock held by Nir to $1.03 per share. On October 31, 2024, Koligo, the Company and a lender entered into a loan agreement. As partial consideration for the entry into of the loan agreement, the Company agreed to issue to the lender a warrant to purchase 485,437 shares of common stock of the Company at an exercise price of $1.03 per share, which shall be exercisable for a period of 12 months from the effective date. If Koligo fails to pay timely the amounts due under the loan on the maturity date, the Company shall issue to the lender an additional warrant to purchase 485,437 shares of common stock of the Company at an exercise price of $1.03 per share, which shall be exercisable for a period of 12 months from the effective date. On November 4, 2024, Orgenesis Maryland LLC (Orgenesis Maryland), a subsidiary of the Company, entered into a promissory note with a lender. As partial consideration for the entry into of the note, the Company agreed to issue lender five-year warrants to purchase an aggregate of 242,718 shares of common stock of the Company at an exercise price of $1.03 per share. If Orgenesis Maryland fails to pay timely the amounts due under the note on the maturity date, the Company shall issue to lender additional five-year warrants to purchase an aggregate of 242,718 shares of common stock of the Company at an exercise price of $1.03 per share. *Issuer Purchases of Equity Securities* None. ITEM 6. [RESERVED] ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Managements Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information necessary to understand our audited consolidated financial statements for the years ended December 31, 2024 and December 31, 2023 and highlight certain other information which, in the opinion of management, will enhance a readers understanding of our financial condition, changes in financial condition and results of operations. In particular, the discussion is intended to provide an analysis of significant trends and material changes in our financial position and the operating results of our business during the year ended December 31, 2024, as compared to the year ended December 31, 2023. This discussion should be read in conjunction with our consolidated financial statements for the years ended December 31, 2024 and December 31, 2023 and related notes included elsewhere in this Annual Report on Form 10-K. These historical financial statements may not be indicative of our future performance. This Managements Discussion and Analysis of Financial Condition and Results of Operations contains numerous forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described throughout this filing, particularly in Item 1A. Risk Factors. | 53 | | All monetary amounts are expressed in thousands of US dollars (unless stated otherwise), except for share and loss per share amounts. On September 20, 2024, we implemented a 1-for-10 reverse stock split (the Reverse Split) of its authorized and outstanding shares of Common Stock. All share and per share amounts in these financial statements have been retroactively adjusted to reflect the Reverse Split as if it had been effected prior to the earliest financial statement period included herein. *Corporate Overview* We are a global biotech company working to unlock the promise of cell and gene therapies (CGTs) in an affordable and accessible offering. CGTs can use the patients own cells (autologous) or use donor cells (allogenic), and, for regulatory purposes, are classified as Advanced Therapy Medicinal Products (ATMPs). We are primarily focused on pioneering a paradigm-shifting decentralized approach to CGT therapies utilizing an automated and/or closed approach validated for compliant production at or near the patient care site (Decentralized Cell Processing or DCP Platform). This approach has the potential to overcome the limitations of traditional centralized processing methods due to their complex logistics and inefficient unscalable processing methods leading to cost prohibitive products that currently limit the number of patients that can have access to these therapies. CGTs are costly and complex to produce. We also refer to CGTs as living drugs since they are based on maintaining the cells vitality. Therefore, there is no possibility to sterilize the products, since such a process involves killing any living organism. Many of these therapies require sourcing of the patients cells, engineering them in a sterile environment and then transplanting them back to the patient (so-called autologous CGT). This presents multiple logistic challenges as each patient requires their own production batch, and the current processes involve complex laboratory-based types of manipulations requiring highly trained lab technicians. To overcome these challenges, we have designed and implemented our DCP Platform - a scalable hub and spoke infrastructure of analytical centers overseeing standardized production platforms, technology and services governed by a central quality system, focusing on replicability and standardization of infrastructure and equipment with centralized monitoring and data management. Features of the DCP Platform include a locally implemented quality system, Standard Operating Procedures (SOPs), Good Manufacturing Practices (GMP), training procedures, quality-control testing and hub oversight of the actual production. We are leveraging our unique approach to therapy production using our DCP Platform and various manufacturing platforms to address some of the quality, supply chain, scale-up and production challenges, adapting these therapies to validated manufacturing platforms that are adapted to standardized production units that can be placed quickly and a low cost throughout our DCP network. Our activity is based on partnerships with hospital, research centers and leading centers of excellence for the supply of products. Partnerships include both developing or adapting potential cell and gene therapies to the platform and providing our own standardized production platforms on a commercial basis. Over the past year, we have focused on validating advanced production platforms for various cell types. These platforms are designed to deliver high-quality, regulatory-compliant cell and gene therapies through a decentralized, automated, and scalable approach, significantly reducing costs and time-to-market. With integrated quality control and regulatory compliance features, they ensure the highest standards of safety and efficacy, enabling faster and more efficient delivery of CGT treatments to patients. We are working to commercialize these platforms by targeting healthcare institutions and industry partners. Our business strategy includes out-licensing, related services and shared revenue opportunities. Furthermore, we are expanding our pipeline of innovative therapies specifically designed to optimize and align with our production platforms. We believe that DCP platform addresses many of the challenges facing the supply of CGT, such as production capacity, logistics and efficient availability. The platforms target significantly lower production costs and potentially allow us to make progress toward our vision of improved access and outcomes in healthcare. ** | 54 | | While the biotech industry struggles to determine the best way to lower costs of goods and enable CGTs to scale, the scientific community continues to advance and push the development of such therapies to new heights. Clinicians and researchers are excited by all the new tools such as new generations of industrial viruses, big data analysis for genetic and molecular data and technologies including CRISPR, mRNA, etc. available, often at a low cost, to perform advanced research in small labs. Most new therapies arise from academic institutes or small spinouts from such institutes. Though such research efforts may manage to progress into a clinical stage, utilizing lab based or hospital-based production solutions, they lack the resources to continue the development of such drugs to market approval. Historically, drug/therapeutic development has required investments of hundreds of millions of dollars to be successful. One significant cause for the high cost is that each therapy often requires unique production facilities and technologies that must be subcontracted or designed and built based on expensive subcontracting services. Further, the cost of production during the clinical stage is extremely expensive. Given these financial restraints, researchers and institutes hope to out- license their therapeutic products to large biotech companies or spin-out new companies which is usually an option at a de-risked stage In addition, we are developing our pipeline of advanced therapies with the goal of entering into out-licensing agreements for these therapies. Our platform may also be utilized by other parties, such as biotech companies and hospitals for the supply of their products. The ability to produce these products at low cost allows for an expedited development process, and the partnership with hospitals around the globe enables joint grants and lower cost of clinical development. We also review many therapies available for out licensing and select the ones which we believe have the highest market potential, can benefit the most from a point of care approach and have the highest chance of clinical success. We assess such issues by utilizing its global POCare Network and our internal knowhow accumulated over a decade of involvement in the field. To summarize: We in-license to quickly adapt therapies to a point-of-care approach through regional partnerships, and we out-license our therapies for market approval in preferred geographical regions. This approach lowers overall development cost, through minimizing pre-clinical development costs incurred by us, and through receiving of the additional funding from grants and/or payments by regional partners. ** *Orgenesis subsidiaries* **** The following is a description of our subsidiaries, all of which are wholly owned, and their area of expertise: | | | Koligo Therapeutics, Inc., a Kentucky corporation, which is a regenerative medicine company, specializing in developing personalized cell therapies. It is currently focused on commercializing its metabolic pipeline via the POCare Network throughout the United States and in international markets. | | | | | | | | | | Orgenesis CA, Inc. a Delaware corporation, which is currently focused on development of our technologies and therapies in California. | | | | | | | | | | Orgenesis Switzerland Sarl, which is currently focused on providing group management services. | | | | | | | | | | MIDA Biotech BV, which is currently focused on research and development activities, was granted a 4 million Euro grant under the European Innovation Council Pathfinder Challenge Program which supports cutting-edge science and technology. The grant is for technologies enabling the production of autologous induced pluripotent stem cells (iPSCs) using microfluidic technologies and artificial intelligence (AI). | | | | | | | | | | Orgenesis Italy SRL which is currently focused on R&D activities. | | | 55 | | | | | Orgenesis Ltd., an Israeli subsidiary which is focused on R&D and a provider of R&D management services for out licenced products. (Declared bankrupt by Israeli district court in August 2025. | | | | | | | | | | Orgenesis Austria GmbH, which is currently focused on the development of the Companys technologies and therapies. | | | | | | | | | | Octomera LLC, a Delaware corporation, which specializes in providing processing services within the Orgenesis group and to third party customers. Octomeras current operating subsidiaries, all of which are wholly owned, are: | | | | | | | | | | Orgenesis Maryland LLC, which is the center of POCare Services activity in North America and is currently focused on setting up and providing POCare Services and cell-processing services to the POCare Network. | | | | | | | | | | Tissue Genesis International LLC, a Texas limited liability company currently focused on development of our technologies and therapies. | | | | | | | | | | Orgenesis Germany GmbH, a German entity. | | | | | | | | | | Theracell Laboratories IKE (Theracell Labs), a Greek company currently focused on expanding our POCare Network. | | | | | | | | | | ORGS POC CA Inc, which is currently focussed on expanding our POCare Network in California. | | | | | | | | | | Octo Services LLC, a Delaware entity. | | Services provided by Octomera include: | | | Process development of therapies, process adaptation, and optimization inside the DPU & O; | | | | | Adaptation of automation and closed systems to serviced therapies; | | | | | Incorporation of the serviced therapies compliant with GMP in the DPU & O s; | | | | | Tech transfers and training of local teams for the serviced therapies at the POCare Centers; | | | | | Processing and supply of the therapies and required supplies under GMP conditions within our POCare Network, including required quality control testing; and | | | | | Contract Research Organization services for clinical trials. | | The POCare Services are performed in decentralized hubs that provide harmonized and standardized services to customers, or POCare Centers. We are working to expand the number and scope of our POCare Centers with the intention of providing an efficient and scalable pathway for CGT therapies to reach patients rapidly at lowered costs. Our POCare Services are designed to allow rapid capacity expansion while integrating new technologies to bring together patients, doctors and industry partners with a goal of achieving standardized, regulated clinical development and production of therapies. During 2024, liquidation activities at the following subsidiaries commenced (See note 20): | | | Orgenesis Korea Co. Ltd | | | | | Orgenesis Biotech Israel Ltd | | | | | Orgenesis Australia PTY LTD | | | | | Orgenesis Belgium SRL | | | | | Orgenesis Services SRL | | ** | 56 | | ** *Significant Developments During Fiscal 2024* **** On January 29, 2024, (date of reconsolidation), we and an affiliate of Metalmark Capital Partners (Metalmark or MM) entered into a Unit Purchase Agreement (the UPA), pursuant to which we acquired all the preferred units of Octomera owned by MM (the Acquisition). As a result of the acquisition, we therefore now own 100% of the equity interests of Octomera. We had previously deconsolidated Octomera from our consolidated financial statements. Pursuant to the acquisition, MM and us further agreed to the following: | | 1. | Consideration: | | | | | Royalty Payments: If Octomera and its subsidiaries generate Net Revenue during the three-year period 2025-2027, then we will pay 5% of Net Revenues to MM pursuant to the MM UPA. | | | | | | | | | | Milestone Payments: If we sell Octomera within ten years from the date of the Closing at a price that is more than $40 million excluding consideration for certain Excluded Assets as per the UPA, we shall pay MM 5% of the net proceeds. | | | | 2. | MMs designated members of the Board of Managers of Octomera resigned and the we amended the Second Amended and Restated Limited Liability Company Agreement of Octomera (the Octomera LLC Agreement) to be a single member agreement reflecting the transactions consummated under the UPA, such that MM no longer (i) is a member of Octomera or a party to the Octomera LLC Agreement, or (ii) has a right to appoint members of the board of managers of Octomera. | | Additionally, pursuant to an extension agreement signed between us and MM on January 28, 2024, the maturity date of certain loans that MM had lent to us in the amount of $2,600 was extended to January 28, 2034. On February 14, 2024, following a claim for payment by employees of OBI (a fully owned subsidiary of Octomera) of past salaries due, the district court in Haifa, Israel appointed a trustee to run the affairs of OBI. As a result of this appointment, effective February 14, 2024, we no longer controlled OBI and ceased to consolidate the results of OBI into our consolidated results. We recognized a loss as a result of the deconsolidation of $66. We did not believe that rehabilitation of OBI was possible, and we purchased certain of OBIs equipment. On March 3, 2024, we entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which we agreed to issue and sell, in a private placement, 227,272 shares of our Common Stock at a purchase price of $10.3 per share, Warrants to purchase up to 227,272 shares of Common Stock at an exercise price of $15.0 per share, and Warrants to purchase up to 227,272 shares of Common Stock at an exercise price of $20.0 per share, all such Warrants exercisable immediately and expiring five years from the date of their issuance. We received gross proceeds of approximately $2,300 before deducting related offering expenses. The Offering closed on March 5, 2024. On April 5, 2024, we entered into an Asset Purchase and Strategic Collaboration Agreement (the Purchase Agreement) with Griffin Fund 3 BIDCO, Inc. (Germfree), for the sale by us of five OMPULs to Germfree, which were to be incorporated into Germfrees lease fleet and leased back to us or to third-party lessees designated by us. Pursuant to the Purchase Agreement, and subject to the terms and conditions set forth therein, in consideration for the purchase of the OMPULs, the Orgenesis Quality Management Systems Framework (OQMSF) and related intellectual property rights, Germfree agreed to pay us an aggregate purchase price of $8,340 subject to adjustment through a verification mechanism set forth in the Purchase Agreement. Pursuant to the Purchase Agreement, Germfree has paid us $6,720 as of December 31, 2024. Pursuant to the Purchase Agreement, Germfree agreed to exclusively manufacture and distribute OMPULs and supply us with OMPULs for use worldwide for ten years (the Term), under a license to all OMPUL-related intellectual property owned by us. On November 5, 2024, Germfree notified us of its intention not to lease any OMPULS back to us. Germfree confirmed that it had satisfied its obligations to us under the Purchase Agreement, and we therefore do not expect to receive any further payments thereunder. [COMPANY TO DESCRIBE LAWSUIT AND SETTLEMENT] On May 10, 2024, we entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which we agreed to issue and sell, in a private placement, 15,000 shares of our Common Stock at a purchase price of $10.3 per share, Warrants to purchase up to 15,000 shares of Common Stock at an exercise price of $15.0 per share, and further Warrants to purchase up to 15,000 shares of Common Stock at an exercise price of $20.0 per share, all such Warrants exercisable immediately and expiring five years from their date of issuance. We received gross proceeds of approximately $154 before deducting related offering expenses. The Offering closed on May 10, 2024. | 57 | | On May 21, 2024 we entered into debt exchange agreements with three convertible debt holders pursuant to which a total of $16,007 of outstanding principal and accrued interest was exchanged for the right to receive an aggregate of 1,577,695 shares of common stock, par value $0.0001 per share, of our Common Stock, of which $14,860 was exchanged for shares at an exchange price of $10.3 per share of Common Stock and $1,147 was exchanged for shares at an exchange price of $8.5 per share of Common Stock. On July 10, 2024, we entered into an Asset Purchase Agreement (the Purchase Agreement) with Broaden Bioscience and Technology Corp. (Broaden) for the purchase by the Company of the following assets (the Assets): The process and algorithms developed by Broaden for processing CAR-T, RACE CAR-T and all oncology products that will enable us to develop and sell treatments to third parties, which include Broadens rights, title and interests in and to all intellectual property, including, but not limited to, patents, patent applications, know-how, materials, licenses, permits and approvals related thereto. Pursuant to the Purchase Agreement, in consideration for the purchase of the Assets, we will pay Broaden an amount equal to the value of the Assets established by a third party valuation firm not to exceed $11,000 (the Consideration), less a debt adjustment relating to $10,767 owed to us by Broaden for work performed and invoiced between August 2022 and May 2023 (the Debt), as detailed in the Purchase Agreement. The Consideration that exceeds the Debt will be payable at our election in shares of our common stock at a price of $30.0 per share or 10% above the market price at such time it is paid, whichever is higher, or a note with amortization in 24 months from the date of the Purchase Agreement, including prepayment provisions. On July 12, 2024, we entered into an Asset Purchase Agreement (the Purchase Agreement) with Theracell Advanced Biotechnology S.A, Theracell Advanced Biotechnology LTD and IDNA Genomics Public Limited (collectively, Theracell) for the purchase by us of the following assets (the Assets) owned by Theracell: | | | 50% of the outstanding ownership rights and equity interests in Theracell Laboratories IKE (Theracell IKE) not currently owned by us so that we shall own 100% of the outstanding equity interests of Theracell IKE; and | | | | | Certain products (the Products), which include: (i) the manufacturing processes, algorithms, work instructions, test methods, standard operating procedures and specifications for producing Tumor Infiltrating Lymphocytes (TILs) that meet current Good Manufacturing Practice (cGMP) requirements that will enable the Company to potentially use this product as a platform for treating a wide variety of solid tumors; (ii) a 3rd generation GMP lentivirus production process, which is part of a therapy manufacturing process that will enable the Company to potentially treat Beta Thalassemia therapies; (iii) an oncolytic virus cell carrier platform which will enable the Company to potentially develop treatments for an array of cancers; (iv) a process for the potential treatment of mesenchymal stem cells for kidney disorders; (v) a process for controlled isolation of regenerative EVs derived from mesenchymal stem cells for the potential treatment of kidney disorders; and (vi) bioxome encapsulated APIs for improved transdermal delivery and bioavailability for the potential treatment of atopic dermatitis/wound healing; including Theracells rights, title and interests in and to all intellectual property, including, but not limited to, patents, patent applications, know-how, materials, licenses, permits and approvals relating to Products as further described in the Purchase Agreement. | | Pursuant to the Purchase Agreement, in consideration for the purchase of the Assets, we agreed to pay Theracell an aggregate purchase price of $13,000 (the Consideration), which is equal to the value of the Assets established by a third-party valuation firm, less a debt adjustment in the amount of $10,324 which was owed by Theracell to us (the Debt). The aggregate Consideration will be paid by us as follows: (i) $400 will be paid to Theracell within 60 days after signing of the Purchase Agreement, (ii) $250 will be paid to Theracell within one year after signing of the Purchase Agreement, and (iii) the remaining amount (less any Debt) will be paid to Theracell in four equal annual payments beginning on December 30, 2025 and ending on December 30, 2028. As of the date of this annual report on Form 10-K, we had paid Theracell $243. On September 20, 2024, we implemented a 1-for-10 reverse stock split (the Reverse Split) of our authorized and outstanding shares of Common Stock. All share and per share amounts in these financial statements have been retroactively adjusted to reflect the reverse split as if it had been effected prior to the earliest financial statement period included herein. Following the Reverse Split, the number of authorized shares of common stock that we are authorized to issue from time to time is 14,583,333 shares. | 58 | | On December 20, 2024, the Lige Business Court in Belgium appointed provisional liquidators for Orgenesis Belgium SRL and Orgenesis Services SRL (the Belgian subsidiaries). The Belgian subsidiaries had, on November 8, 2024, petitioned the Lige Business Court to allow a judicial reorganization pursuant to Article XX.41 of the Belgian Code of Economic Law. The petition followed the inability of the Belgian subsidiaries to pay employee payroll expenses and accounts payable. *Results of Operations* **** **Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023.** Our financial results for the year ended December 31, 2024 are summarized as follows in comparison to the year ended December 31, 2023: | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Revenues | | $ | 1,035 | | | $ | 530 | | | | Cost of sales | | | 1,928 | | | | 6,255 | | | | Gross profit | | $ | (893 | ) | | $ | (5,725 | ) | | | Cost of development services and research and development expenses | | | 9,622 | | | | 10,623 | | | | Amortization of intangible assets | | | 728 | | | | 721 | | | | Change in Contingent consideration | | | (4,643 | ) | | | - | | | | Selling, general and administrative expenses included credit losses of $24,367 for the year ended December 31, 2023 | | | 14,822 | | | | 35,134 | | | | Share in loss of associated company | | | 8 | | | | 734 | | | | Impairment of investment | | | - | | | | 699 | | | | Impairment expenses | | | 18,338 | | | | - | | | | Operating loss | | $ | 39,768 | | | $ | 53,636 | | | | Loss from deconsolidation of subsidiaries (see note 3 and note 20) | | | (4,480 | ) | | | 5,343 | | | | Other income | | | (606 | ) | | | (4 | ) | | | Loss from extinguishment in connection with loans (see note 10 a of Item 8) | | | 5,422 | | | | 283 | | | | Credit loss on convertible loan receivable | | | - | | | | 2,688 | | | | Financial expense, net | | | 4,508 | | | | 2,499 | | | | Convertible loans induced conversion expenses | | | 4,304 | | | | - | | | | Loss before income taxes | | $ | 48,916 | | | $ | 64,445 | | | | Tax expense | | | 97 | | | | 473 | | | | Net loss | | $ | 49,013 | | | $ | 64,918 | | | ** | 59 | | Revenues The following table shows our revenues by major revenue streams: | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | | | | | | | | | | Revenue stream: | | | | | | | | | | | Cell process development services and hospital services | | $ | 1,020 | | | $ | 515 | | | | License fees | | | 15 | | | | 15 | | | | Total | | $ | 1,035 | | | $ | 530 | | | Our revenues for the year ended December 31, 2024 were $1,035, as compared to $530 for the year ended December 31, 2023, representing an increase of 95%. The increase was as a result of work completed and payments received on cell processing development and hospital services. A breakdown of the revenues per customer that constituted at least 10% of revenues is as follows: | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Revenue earned: | | | | | | | | | | | Customer A (United States) | | $ | 492 | | | $ | - | | | | Customer B (United States) | | | 300 | | | | 280 | | | | Customer C (United States) | | | - | | | | 90 | | | | Customer D (United States) | | | 150 | | | | 130 | | | **Expenses** Cost of Revenues | | | Year Ended | | | | | | December 31, 2024 | | | December 31, 2023 | | | | Salaries and related expenses | | $ | 636 | | | $ | 2,387 | | | | Stock-based compensation | | | 5 | | | | 4 | | | | Professional fees and consulting services | | | 126 | | | | 1,917 | | | | Raw materials | | | 131 | | | | 731 | | | | Depreciation expenses, net | | | 654 | | | | 481 | | | | Other expenses | | | 376 | | | | 735 | | | | Total | | $ | 1,928 | | | $ | 6,255 | | | | 60 | | Cost of revenues for the year ended December 31, 2024 were $1,928, as compared to $6,255 for the year ended December 31, 2023, representing a decrease of 69%. The decrease was mainly attributable to reduced Octomera segment cost of revenues, particularly as a result of the deconsolidation of OBI and reduced activities at the Korean subsidiary. Cost of development services and research and development expenses | | | Year Ended | | | | | | December 31, 2024 | | | December 31, 2023 | | | | Salaries and related expenses | | $ | 6,300 | | | $ | 4,800 | | | | Stock-based compensation | | | 158 | | | | 210 | | | | Subcontracting, professional and consulting services | | | 745 | | | | 3,662 | | | | Lab expenses | | | 113 | | | | 377 | | | | Depreciation expenses, net | | | 620 | | | | 312 | | | | Other research and development expenses | | | 2,043 | | | | 1,542 | | | | Less grant | | | (357 | ) | | | (280 | ) | | | Total | | $ | 9,622 | | | $ | 10,623 | | | Cost of development services and research and development for the year ended December 31, 2024 were $9,622, as compared to $10,623 for the year ended December 31, 2023, representing a decrease of 9%. The increase in salaries and related expenses is mainly attributable to our accounting for Octomera segment cost of development services and research and development expenses from the reconsolidation date compared to accounting for such expenses in 2023 until the deconsolidation of Octomera. Subcontracting, professional fees and consulting services declined as a result of cost savings. Other research and development expenses increased mainly as a result of the Asset Purchase Agreements referred to in Note 18. Selling, General and Administrative Expenses | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | | | | | | | | | | Salaries and related expenses | | $ | 3,228 | | | $ | 2,825 | | | | Stock-based compensation | | | 191 | | | | 249 | | | | Accounting and legal fees | | | 2,732 | | | | 3,355 | | | | Professional fees | | | (29 | ) | | | 1,891 | | | | Rent and related expenses | | | 2,239 | | | | 161 | | | | Business development | | | 1,801 | | | | 464 | | | | Depreciation expenses, net | | | 84 | | | | 46 | | | | | | | 3,893 | | | | 1,776 | | | | Other general and administrative expenses | | | 683 | | | | 24,367 | | | | Total | | $ | 14,822 | | | $ | 35,134 | | | Selling, general and administrative expenses for the year ended December 31, 2024 were $14,822, as compared to $35,134 for the year ended December 31, 2023, representing a decrease of 58%. The decrease was mainly as a result of a decrease of $20,642 in credit losses incurred in the twelve months ended December 31, 2024 which were $2,725 compared to credit losses incurred of $23,367 in the twelve months ended December 31, 2023, mainly in the Octomera segment. The decrease was offset by an increase in business development expenses as a result of warrants granted to advisers. | 61 | | Share in Net Loss of Associated Company | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | | | | | | | | | | Share of Net Loss of Associated Company | | $ | 8 | | | $ | 734 | | | | | | | | | | | | | | | Total | | $ | 8 | | | $ | 734 | | | Share in net loss of associated company for the year ended December 31, 2024 was $ 8 , as compared to $734 for the year ended December 31, 2023, representing a decrease of 99%. The decrease in Share in net loss of associated company in the year ended December 31, 2024 compared to the year ended December 31, 2023 is primarily because Octomera was treated as an associated Company in 2023 from the deconsolidation date, and in 2024 it was accounted for as a controlled subsidiary from the reconsolidation date. Loss (Profit) from deconsolidation of subsidiaries | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Loss (Profit) from deconsolidation of subsidiaries | | $ | (4,480 | ) | | $ | 5,343 | | | The profit from deconsolidation of subsidiaries in the twelve months ended December 31, 2024 was as a result of the deconsolidation of OBI, Orgenesis Korea, Orgenesis Belgium and Orgenesis Services. See note 20. The loss from deconsolidation of subsidiaries in the twelve months ended December 31, 2023 was as a result of the deconsolidation of Octomera. See note 3. Other income | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Other income | | $ | (606 | ) | | $ | (4 | ) | | The other income earned in the twelve months ended December 31, 2024 was as a result of OMPULS sold to Germfree. See note 13f. | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Loss from extinguishment | | $ | 5,422 | | | $ | 283 | | | The Loss from extinguishment incurred in the twelve months ended December 31, 2024 was mainly as a result of a loss from extinguishment in connection with loans (see note 10 a of Item 8) | 62 | | Credit Loss on Convertible loan receivable | | | Years Ended December 31 | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Credit loss on convertible loan receivable | | $ | - | | | $ | 2,688 | | | The credit loss for the year ended December 31, 2024 was $0 compared to $2,688 for the year ended December 31, 2023. This was attributable to a provision created for a credit loss on a loan created in the twelve months ended December 31, 2023. Financial Expenses, net | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | | (in thousands) | | | | Interest expense on convertible loans and loans | | | 3,737 | | | | 2,167 | | | | Foreign exchange loss, net | | | 782 | | | | 325 | | | | Other (income) loss | | | (11 | ) | | | 7 | | | | Total | | $ | 4,508 | | | $ | 2,499 | | | Financial expenses, net for the year ended December 31, 2024 were $4,508, as compared to $2,499 for the year ended December 31, 2023, representing an increase of 80%. The increase was mainly due to interest on new loan agreements entered into and finance expenses incurred on warrants issued to loan holders. Convertible loans induced conversion expenses | | | Years Ended December 31 | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Convertible loans induced conversion expenses | | $ | 4,304 | | | $ | - | | | The convertible loans induced conversion expense for the year ended December 31, 2024 was $ 4,304 compared to $0 for the year ended December 31, 2023. This was attributable to a charge generated as part of a Debt equity conversion in 2024. See note 10. Impairment expenses | | | Years Ended December 31 | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Impairment expenses | | $ | 18,338 | | | $ | 699 | | | Impairment expenses for the year ended December 31, 2024 were $ 18,338 compared to $0 for the year ended December 31, 2023. This was attributable to an impairment of goodwill of $1,211, property, plant and equipment of $8,752, and intangible assets of $8,375 (total impairment of approximately $18,338 million) in the twelve months ended December 31, 2024. | 63 | | Tax expense | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Tax expense | | $ | 97 | | | $ | 473 | | | | Total | | $ | 97 | | | $ | 473 | | | Tax expense, net for the year ended December 31, 2024 were $97, as compared to $473 for the year ended December 31, 2023, representing a decrease of 79%. The increase is mainly attributable to increased tax liabilities in the U.S. Effective for years beginning after December 31, 2021, Internal Revenue Code Section 174 changed the tax treatment of research and experimentation (R&E) expenditures. While companies have historically deducted such costs for federal income tax purposes, these new rules require capitalization and prescribe cost recovery over a period of five years for research and development paid or incurred in the United States and 15 years for R&E paid or incurred outside of the United States. **Working Capital** | | | December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | | | | | | | | | | Current assets | | $ | 761 | | | $ | 4,076 | | | | Current liabilities | | $ | 26,920 | | | $ | 16,407 | | | | Working capital | | $ | (26,159 | ) | | $ | (12,331 | ) | | Current assets decreased by $3,315 between December 31, 2023 and December 31, 2024. The decrease was mainly attributable to a decline in cash and cash equivalents, prepaid expenses, and receivables from related parties. Current liabilities increased by $10,513 between December 31, 2023 and December 31, 2024. The increase was mainly attributable to: | | | the reconsolidation of Octomera which included an increase in accounts payable, accrued expenses and other payables, and employees and related payables; | | | | | the deconsolidation of subsidiaries where we recorded an increase in accounts payable to related parties; | | | | | Additional non-convertible short term loan agreements entered into. | | The above increases were offset by a decline in current maturities of convertible loans, converted to equity. **** **Liquidity and Capital Resources** | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | | | | | | | | | | Net loss | | $ | (49,013 | ) | | $ | (64,918 | ) | | | | | | | | | | | | | | Net cash used in operating activities | | | (17,076 | ) | | | (14,837 | ) | | | Net cash used in investing activities | | | 365 | | | | (3,707 | ) | | | Net cash provided by financing activities | | | 15,959 | | | | 13,618 | | | | Net change in cash and cash equivalents and restricted cash | | $ | (752 | ) | | $ | (4,926 | ) | | During year ended December 31, 2024, we funded our operations from operations as well as from proceeds raised from equity and debt offerings. Net cash used in operating activities for the year ended December 31, 2024 was approximately $17,076, as compared to net cash used in operating activities of approximately $14,837 for the year ended December 31, 2023. The decline was mainly as a result of a loss of $32,984 for the year ended December 31, 2024 compared to a loss of $64,918 for the year ended December 31, 2023, which is mainly related a decline in activity in the Octomera segment. | 64 | | Net cash provided by investing activities for the year ended December 31, 2024 was approximately $365, as compared to net cash used in investing activities of approximately $3,707 for the year ended December 31, 2023. The change was mainly as a result of a decline in purchases of property and equipment and the cash impact from the deconsolidation of Octomera which incurred in the twelve months ended December 31, 2023 not incurred in the twelve months ended December 31, 2024. Net cash provided by financing activities for the year ended December 31, 2024 was approximately $15,959, as compared to net cash provided by financing activities of approximately $13,618 for the year ended December 31, 2023. The change was mainly attributable to proceeds raised from equity investments and warrant exercises in the amount of $2,556 in the twelve months ended December 31, 2024 as compared to $5,283 in the twelve months ended December 31, 2023. In addition, in the twelve months ended December 31, 2024, we raised convertible loans in the amount of $75 compared to $5,735 in the twelve months ended December 31, 2023, These decreases were offset by the receipt of $6,720 from Germfree and non-convertible loans received in the amount of $6,060 in the twelve months ended December 31, 2024 compared to $635 received in the twelve months ended December 31, 2023. **Liquidity and Capital Resources Outlook** *Funding Requirements and Going Concern* As of December 31, 2024, we had an accumulated deficit of $224,787 and for the year ended December 31, 2024 incurred negative operating cashflows of $17,076. As of December 31, 2024, we had cash and cash equivalents of approximately $0.1 million. We had approximately $$65.8 million in outstanding liabilities as of December 31, 2024. In September 2025, we repaid $6.3 million of this outstanding debt. Our activities have been funded by generating revenue, through offerings of our securities, and through proceeds from loans. There is no assurance that our business will generate sustainable positive cash flows to fund our business and satisfy our debt obligations. If there are further reductions in revenues or increases in operating costs for facilities expansion, research and development, commercial and clinical activity or decreases in revenues from customers, we will need to use mitigating actions such as to seek additional financing or postpone expenses that are not based on firm commitments. In addition, in order to fund our operations until such time that we can generate sustainable positive cash flows, we will need to raise additional funds. We expect our current and projected cash resources and commitments will not be sufficient to meet our obligations for the next 12 months, raising a substantial doubt about our ability to continue as a going concern. Our managements plans include raising additional capital to fund our operations and to repay our outstanding loans when they become due, as well as exploring additional avenues to increase revenue and reduce capital expenditures. Our ability to fund the completion of our ongoing and planned activities may be substantially dependent upon whether we can obtain sufficient funding at acceptable terms. If we are unable to raise sufficient additional capital or meet revenue targets, we may have to reduce or eliminate certain activities and reduce our headcount. The estimation and execution uncertainty regarding the our future cash flows and our managements judgments and assumptions in estimating these cash flows is a significant estimate. Those assumptions include reasonableness of the forecasted revenue, operating expenses, and uses and sources of cash. We intend to continue to seek delays on certain payments and explore other ways of potentially reducing expenses with the goal of preserving cash until additional financing is secured. These efforts may not be successful or sufficient in amount or on a timely basis to meet our ongoing capital requirements. We continue to actively seek additional financing. In the absence of additional sources of liquidity, we do not have sufficient existing cash resources to meet operating and liquidity needs. However, there is no assurance that we will be able to timely secure such additional liquidity or be successful in raising additional funds or that such required funds, if available, will be available on acceptable terms or that they will not have a significant dilutive effect on our existing stockholders. In addition, we are unable to determine at this time whether any of these potential sources of liquidity will be adequate to support our operations or provide sufficient cash flows to us to meet our obligations as they become due and continue as a going concern. In the event we determine that additional sources of liquidity will not be available to us or will not allow us to meet our obligations as they become due, we may need to file a voluntary petition for relief under the United States Bankruptcy Code in order to implement a restructuring plan or liquidation. In addition, substantial doubt about our ability to continue as a going concern may cause investors or other financing sources to be unwilling to provide funding to us on commercially reasonable terms, if at all. If sufficient funds are not available, we will have to delay, reduce the scope of, or eliminate some or all of our business activities, which would adversely affect our business prospects and our ability to continue our operations. | 65 | | ** *Sources of Liquidity* To date, we have funded our operations primarily with the net proceeds from the issuance of convertible loans, the issuance of convertible promissory notes, draws upon a credit facility, the issuance and sale of equity securities and revenues generated from our business. As of December 31, 2024, we have cash and cash equivalents of $78. In the future, we expect to finance our cash needs through a combination of equity and debt financing (including the credit facility described below), including with related parties. *Segregated Portfolio Convertible Loan* Pursuant to the Convertible Loan Agreement for an initial loan of $1,000,000 and credit facility of up to $10,000,000, dated as of September 10, 2025, by and among Theracell Laboratories IKE (Theracell), a subsidiary of Octomera LLC, which is a subsidiary of Orgenesis Inc., and Alpha Prosperity Fund SPC, acting on behalf of and for the account of Segregated Portfolio P (the Lender), the Lender has the option, at its sole discretion, to convert the outstanding amount of the loans (currently, $[7,083,857]) into equity of either us or Theracell, such that the Lender would hold up to 80% of the outstanding share capital of the applicable entity. The conversion of the loan into our shares is subject to shareholder approval of the issuance of the required shares. In addition, the Agreement provides that the Lender will be issued a warrant to purchase 15% of the fully diluted share capital of either us or Theracell, at the Lenders discretion, for an aggregate exercise price of $250,000 and exercisable for three years from issuance. The issuance of shares upon exercise of the warrant is likewise subject to shareholder approval of the issuance of such shares. Additional warrants would be issued in connection with each cumulative drawdown of an additional $1,000,000 under the credit facility. *Off-Balance Sheet Arrangements* We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders. *Critical Accounting Policies and Estimates* ** Our significant accounting policies are more fully described in the notes to our financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2024. We believe that the accounting policies below are critical for one to fully understand and evaluate our financial condition and results of operations. **Income Taxes** Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. In addition, our management performs an evaluation of all uncertain income tax positions taken or expected to be taken in the course of preparing our income tax returns to determine whether the income tax positions meet a more likely than not standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes. | 66 | | **** **Revenue from Contracts with Customers** Our agreements are primarily service contracts that range in duration. We recognize revenue when control of these services is transferred to the customer for an amount, referred to as the transaction price, which reflects the consideration to which we are expected to be entitled in exchange for those goods or services. A contract with a customer exists only when: | | the parties to the contract have approved it and are committed to perform their respective obligations; | | | | we can identify each partys rights regarding the distinct goods or services to be transferred (performance obligations); | | | | we can determine the transaction price for the goods or services to be transferred; and | | | | the contract has commercial substance, and it is probable that we will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. | | Nature of Revenue Streams **** We have three main revenue streams, which are POCare development services, cell process development services, including hospital supplies, and POCare cell processing. **** *POCare Development Services* Revenue recognized under contracts for POCare development services may, in some contracts, represent multiple performance obligations (where promises to the customers are distinct) in circumstances in which the work packages are not interrelated or the customer is able to complete the services performed. For arrangements that include multiple performance obligations, the transaction price is allocated to the identified performance obligations based on their relative standalone selling prices. We recognize revenue when, or as, it satisfies a performance obligation. At contract inception, we determine whether the services are transferred over time or at a point in time. Performance obligations that have no alternative use and that we have the right to payment for performance completed to date, at all times during the contract term, are recognized over time. All other Performance obligations are recognized as revenues by us at point of time (upon completion). **** **Significant Judgement and Estimates** ** Significant judgment is required to identifying the distinct performance obligations and estimating the standalone selling price of each distinct performance obligation and identifying which performance obligations create assets with alternative use to us, which results in revenue recognized upon completion, and which performance obligations are transferred to the customer over time. **** *Cell Process Development Services* Revenue recognized under contracts for cell process development services may, in some contracts, represent multiple performance obligations (where promises to the customers are distinct) in circumstances in which the work packages and milestones are not interrelated or the customer is able to complete the services performed independently or by using our competitors. In other contracts when the above circumstances are not met, the promises are not considered distinct, and the contract represents one performance obligation. All performance obligations are satisfied over time, as there is no alternative use to the services it performs, since, in nature, those services are unique to the customer, which retain the ownership of the intellectual property created through the process. For arrangements that include multiple performance obligations, the transaction price is allocated to the identified performance obligations based on their relative standalone selling prices. For these contracts, the standalone selling prices are based on our normal pricing practices when sold separately with consideration of market conditions and other factors, including customer demographics and geographic location. | 67 | | We measure the revenue to be recognized over time on a contract-by-contract basis, determining the use of either a cost-based input method or output method, depending on whichever best depicts the transfer of control over the life of the performance obligation. Included in Cell Process Development Services is hospital supplies revenue which is derived principally from the sale or lease of products and the performance of services to hospitals or other medical providers. Revenue is earned and recognized when product and services are received by the customer. Revenue from POCare Cell processing Revenues from POCare Cell processing represent performance obligations which are recognized either over, or at a point of time. The progress towards completion will continue to be measured on an output measure based on direct measurement of the value transferred to the customer (units produced). **Concentration of Credit Risk** Financial instruments that potentially subject us to concentration of credit risk consist of principally cash and cash equivalents, bank deposits and certain receivables. We held these instruments with highly rated financial institutions, and we have not experienced any significant credit losses in these accounts and does not believe that we are exposed to any significant credit risk on these instruments, except for accounts receivable. We perform ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for doubtful accounts. Our accounts receivable accounting policy until December 31, 2022, prior to the adoption of the new Current Expected Credit Losses (CECL) standard, created bad debts when objective evidence existed of inability to collect all sums owed it under the original terms of the debit balances. Material customer difficulties, the probability of their going bankrupt or undergoing economic reorganization and insolvency, material delays in payments and other objective considerations by management that indicate expected risk of payment were all considered indicative of reduced debtor balance value. Effective January 1, 2023, we adopted the new CECL standard. We maintain the allowance for estimated losses resulting from the inability of our customers to make required payments. We consider historical collection experience for each of its customers and when revenue and accounts receivable are recorded. We also recognize estimated expected credit losses over the life of the accounts receivables. The estimate of expected credit losses considers not only historical information, but also current and future economic conditions and events. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK **** Not applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information called for by Item 8 is included following the Index to Financial Statements on page F-1 contained in this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. | 68 | | **** ITEM 9A. CONTROLS AND PROCEDURES *Evaluation of Disclosure Controls and Procedures* Securities Exchange Act of 1934, as amended (the Exchange Act)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report. Based upon that evaluation and subject to the foregoing, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this Annual Report, the design and operation of our disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting described below. *Managements Report on Internal Control over Financial Reporting* Our management, under the supervision of the Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of our company are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our companys assets that could have a material effect on the financial statements. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this evaluation, our management used the criteria set forth in the Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management identified the following material weaknesses: In connection with our audit for the year ended December 31, 2023, we did not perform appropriate analyses related to our internal control over financial reporting in the accounting for whether it is probable we will collect substantially all the consideration to which we are entitled for revenue services provided, as well as our estimated credit losses during 2023. As a result, we identified a deficiency in the operating effectiveness of our internal control over financial reporting related to our accounting for revenues, credit losses and the related impacts relating thereto, which resulted in the restatement of our unaudited condensed consolidated financial statements for the three months ended March 31, 2023, the three and six months ended June 30, 2023 and the three and nine months ended September 30, 2023. As of December 31, 2024, such weakness has not been remediated. Managements plans for remediation, which occurred during 2025 and are continuing, include a thorough credit assessment of all new customers, analysis of payment history for existing customers as well as an analysis on expected credit losses by customer. We had an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting and an inadequate number of personnel to properly implement control procedures. Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) may consider appointing outside directors and audit committee members in the future. Management, including our Chief Executive Officer and Chief Financial Officer, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected. | 69 | | Because of these material weaknesses, management has concluded that our internal control over financial reporting was not effective as of December 31, 2024. This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm on internal control over financial reporting because we are a smaller reporting company and non-accelerated filer. *Remediation Efforts* Management is evaluating and implementing measures to address these deficiencies, including seeking ways to improve access to the financial resources necessary for timely analysis of accounting for revenues, credit losses and the related impacts relating thereto and for ongoing compliance with financial reporting requirements. In addition, the Company is in process of designing and evaluating processes and controls relating to its ITGC environment that will involve the following: Management believes that the material weaknesses did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and inadequate segregation of duties results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods. The Company remains committed to strengthening its internal controls and improving the timeliness and accuracy of its financial reporting. *Changes in Internal Control Over Financial Reporting* ** Except as described above, there were no changes in our internal control over financial reporting that occurred during the fourth quarter of the year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. **** | 70 | | **** PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The following table sets forth certain information regarding each of our current Directors and Executive Officers as of March 26, 2026. | Name | | Age | | Position | | | Vered Caplan | | 56 | | Chief Executive Officer and Chairperson of the Board of Directors | | | Douglas Karriker | | 51 | | Chief Financial Officer, Treasurer and Secretary | | | Itzhak Vider | | 64 | | Director | | | Adam Pelavin (1) | | 47 | | Director | | | Yaron Adler (2) | | 55 | | Director | | | (1) | A member on the audit committee. | | | (2) | A member on the compensation committee. | | On October 19, 2024, Mark Goodman resigned as a director of the Company, On October 28, 2024, the Board of Directors of the Company, following the recommendation of the Nominating and Corporate Governance Committee of the Board, elected Adam Pelavin, Jagannathan Bhalaji, and Santhosh Nagaraj to serve as members of the Board. On December 24, 2024, Jagannathan Bhalaji resigned as a director of the Company. On August 9, 2025, Yaron Adler and Adam Pelavin resigned as directors of the Company. On August 18, 2025, Santhosh Nagaraja resigned as a director of the Company. Their resignations were not due to any disagreements with the Company on any matter relating to the Companys operations, policies or practices. On August 8, 2025, Mr. Victor Miller, the Chief Financial Officer, Treasurer and Secretary of the Company resigned. Vered Caplan assumed the role of the principal financial and accounting officer following his resignation. On March 10, 2026, the Company appointed Mr. Douglas Karriker as the Chief Financial Officer, Treasurer and Secretary of the Company. *Our Executive Officers* **Vered Caplan Chief Executive Officer and Chairperson of the Board of Directors** **** Ms. Caplan has served as our CEO and Chairperson of the Board of Directors since August 14, 2014, prior to which she served as Interim President and CEO commencing on December 23, 2013. She joined our Board of Directors in February 2012. She has 26 years of industry experience, previously holding positions as CEO of Kamedis Ltd. from 2009 to 2014, CEO of GammaCan International Inc. from 2004 to 2007. She also served as a director of the following companies: Opticul Ltd., Inmotion Ltd., Nehora Photonics Ltd., Ocure Ltd., Eve Medical Ltd., and Biotech Investment Corp. Ms. Caplan holds a M.Sc. in biomedical engineering from Tel Aviv University specializing in signal processing; management for engineers from Tel Aviv University specializing in business development; and a B.Sc. in mechanical engineering from the Technion Israel Institute of Technology specialized in software and cad systems. **Douglas Karriker Chief Financial Officer, Treasurer and Secretary** Mr. Karriker has served as Financial Controller of the Company since September 2023. Prior to joining the Company, Mr. Karriker served as Finance Director at Genixus, Corp. until August 2023. Prior to that, Mr. Karriker served as CFO/Treasurer/Vice President of Finance at DataTech Global from 2008 to 2022, where he was responsible for financial planning and analysis, treasury operations, and investor relations. From 1997 to 2008, he held various roles in corporate finance. Mr. Karriker began his career at Delhaize US, where he worked in the financial accounting and reporting division of a public company, operating in the consumer goods space. He holds a Bachelor of Science in Accounting from Appalachian State University and is a Certified Public Accountant (CPA). **Itzhak Vider Director** **** Dr. Vider has served as a director since his appointment on July 8, 2024. Dr. Tsahi Vider is a Doctor of Medicine (Ben Gurion University, Israel, 1989) and a Board-Certified General Surgeon (Meir Hospital, Israel, 1998). He has over 20 years of experience in life-quality medical treatments, advanced aesthetic medicine, and clinical longevity. He is the founder of VIV Clinic, a leading medical wellness and aesthetic centers in Israel, and the Longevity Academy in Israel. Dr. Vider is an international expert in establishing and operating Hyperbaric Oxygen Therapy (HBOT) and Longevity Centers in multiple countries. Since 2024, he has served as the Medical Director at the Advanced Longevity Clinic in Israel. | 71 | | We believe that Dr. Vider is qualified to serve on our Board of Directors because of his business experience and strategic understanding of advancing the valuation of companies in emerging industries. **Adam Pelavin Director** Mr. Pelavin has been a partner at LifeForce Capital, a healthcare venture firm that invests in software-driven innovation in drug discovery and development and in care delivery and coordination, where he co-leads the firms strategies for AI + health and neuro, since June 2023. Prior to becoming a partner, Mr. Pelavin served as an Advisor and Venture Partner at LifeForce Capital from June 2016, supporting investor relations and fundraising as well as sourcing and support. During that period, Mr. Pelavin also advised several additional healthcare startups. Prior to LifeForce Capital, Mr. Pelavin co-founded and co-led Comprisma, a startup focused on realigning macro financial incentives in the U.S. healthcare system, from Jan 2011 until June 2015. Mr. Pelavin began his career in education policy and research at EdSource and later worked as an independent education content creator. Mr. Pelavin received a B.A. in Pure Mathematics from Pomona College (2002) and an M.F.A. in Fiction from the University of California, Riverside (2009). We believe that Mr. Pelavin is qualified to serve on our Board of Directors because of his business experience and strategic understanding of advancing the valuation of companies in emerging industries. **** **Yaron Adler Director** Mr. Adler is the co-founder of a startup incubator, We Group Ltd. In 1999, Mr. Adler co-founded IncrediMail Ltd. and served as its CEO until 2008 and President until 2009. After IncrediMail, Mr. Adler consulted Israeli startup companies regarding Internet products, services and technologies. Mr. Adler served as a product manager from 1997 to 1999, and as a software engineer from 1994 to 1997, at Tecnomatix Technologies Ltd., a software company that develops and markets production engineering solutions to complex automated manufacturing lines that fill the gap between product design and production, and which was acquired by UGS Corp. in April 2005. In 1993, Mr. Adler held a software engineer position at Intel Israel Ltd. He has a B.A. in computer sciences and economics from Tel Aviv University. We believe Mr. Adler is qualified to serve on our Board of Directors because of his education, success with early-stage enterprises and his business acumen in the public markets. **** There are no family relationships between any of the above executive officers or directors or any other person nominated or chosen to become an executive officer or a director. **** *Board of Directors* Our Board of Directors currently consists of four (4) members; Vered Caplan, Itzhak Vider, Adam Pelavin and Yaron Adler. All directors hold office until the next annual meeting of stockholders. At each annual meeting of stockholders, the successors to directors whose terms then expire are elected to serve from the time of election and qualification until the next annual meeting following election. Management has been delegated the responsibility for meeting defined corporate objectives, implementing approved strategic and operating plans, carrying on our business in the ordinary course, managing cash flow, evaluating new business opportunities, recruiting staff and complying with applicable regulatory requirements. The Board of Directors exercises its supervision over management by reviewing and approving long-term strategic, business and capital plans, material contracts and business transactions, and all debt and equity financing transactions and stock issuances. | 72 | | **** **Director Independence** We have three independent directors. Our Board of Directors is not currently comprised of a majority of independent directors. In determining director independence, we use the definition of independence in Rule 5605(a)(2) of the listing standards of The Nasdaq Stock Market. The Board has concluded that Dr. Vider, Adam Pelavin and Yaron Adler are independent based on the definition set forth in the listing standards of the Nasdaq Stock Market, having concluded that any relationship between such directors and our company, in its opinion, does not interfere with the exercise of independent judgment in carrying out the responsibilities of a director. **Board Committees** Our Board of Directors has established an Audit Committee, a Compensation Committee and a Research and Development Committee. The sole member of each of the Audit Committee is Adam Pelavin. The sole member of the Compensation Committee is Yaron Adler. The sole member of the Research and Development Committee is Dr. Vider. Each committee operates under a written charter that has been approved by our Board of Directors. Copies of our committee charters are available on the investor relations section of our website, which is located at http://www.orgenesis.com. **** Audit Committee The Audit Committee (a) assists the Board of Directors in fulfilling its oversight of: (i) the quality and integrity of our financial statements (ii) our compliance with legal and regulatory requirements relating to our financial statements and related disclosures (iii) the qualifications and independence of our independent auditors and (iv) the performance of our independent auditors and (b) prepares any reports that the rules of the SEC require be included in our proxy statement for our annual meeting. The Audit Committee held 7 meetings in 2024. In addition, the Audit Committee reviewed and approved various corporate items by way of written consent during the year 2024. The Board has determined that the sole member of the Audit Committee is an independent director in accordance with the rules of The Nasdaq Stock Market and applicable federal securities laws and regulations. In addition, the Board has determined that Dr. Vider is an audit committee financial expert within the meaning of Item 407(d)(5) of Regulation S-K and has designated him to fill that role. See Directors, Executive Officers and Corporate Governance Directors above for descriptions of the relevant education and experience of each member of the Audit Committee. At no time since the commencement of our most recently completed fiscal year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board of Directors. The Audit Committee is responsible for the oversight of our financial reporting process on behalf of the Board of Directors and such other matters as specified in the Audit Committees charter or as directed by the Board of Directors. Our Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged by us for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for us (or to nominate the independent registered public accounting firm for stockholder approval), and each such registered public accounting firm must report directly to the Audit Committee. Our Audit Committee must approve in advance all audit, review and attest services and all non-audit services (including, in each case, the engagement and terms thereof) to be performed by our independent auditors, in accordance with applicable laws, rules and regulations. Compensation Committee The Compensation Committee (i) assists the Board of Directors in discharging its responsibilities with respect to compensation of our executive officers and directors, (ii) evaluates the performance of our executive officers, and (iii) administers our stock and incentive compensation plans and recommends changes in such plans to the Board as needed. | 73 | | The Compensation Committee held 2 meetings in 2024. In addition, the Compensation Committee reviewed and approved various corporate items by way of written consent during the year ended December 31, 2024. The Board of Directors has determined that the sole member of the Compensation Committee is an independent director in accordance with the rules of The Nasdaq Stock Market and applicable federal securities laws and regulations. Research and Development Committee The Research and Development Committee assists the Board in fulfilling the Boards responsibilities to oversee our research and development programs, and strategies. The Research and Development approved various corporate items by way of written consent during the year ended December 31, 2024. **DELINQUENT SECTION 16(a) REPORTS** Section 16(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act), requires our officers and directors and persons who beneficially own more than ten percent (10%) of the Common Stock outstanding to file initial statements of beneficial ownership of Common Stock (Form 3) and statements of changes in beneficial ownership of Common Stock (Forms 4 or 5) with the SEC. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all such forms they file. Our records reflect that all reports which were required to be filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, were filed on a timely basis, except for two late Form 4s filed by Victor Miller, one late Form 4 filed by Dr. Vider, a late Form 3 and Form 4 filed by Mark Goodman, one late Form 3 filed by Adam Pelavin, one late Form 3 filed by Jagannathan Bhalaji, and one late Form 3 filed by Santhosh Nagaraj. **CORPORATE CODE OF CONDUCT AND ETHICS** Our Board of Directors has adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Copies of our corporate code of conduct and ethics are available, without charge, upon request in writing to Orgenesis Inc., 20271 Goldenrod Lane, Germantown, MD, 20876, Attn: Secretary and are posted on the investor relations section of our website, which is located at www.orgenesis.com. The inclusion of our website address in this Annual Report on Form 10-K does not include or incorporate by reference the information on our website into this Annual Report on Form 10-K. We also intend to disclose any amendments to the Corporate Code of Conduct and Ethics, or any waivers of its requirements, on our website. **INSIDER TRADING POLICY** We have adopted an Insider Trading Policy that governs the purchase, sale and/or other dispositions of the Companys securities by our directors, officers and employees, as well as their immediate family members and entities controlled by them, and that is designed to promote compliance with insider trading laws, rules and regulations. | 74 | | **** ITEM 11. EXECUTIVE COMPENSATION The following table shows the total compensation paid or accrued during the years ended December 31, 2024 and 2023. Our named executive officers consist of (1) our Chief Executive Officer and (2) our Chief Financial Officer. As of December 31, 2024, there were no other executive officers who earned more than $100,000 during the year ended December 31, 2024 and were serving as executive officers as of such date. [The table includes two additional executive officers who would have been among the three most highly compensated executive officers except for the fact that they were not serving as executive officers of the Company as of the end of 2024.] **Summary Compensation Table** | Name and Principal Position | | Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) | | | Option Awards ($) (1) | | | Non-Equity Incentive Plan Compensa- tion ($) | | | Non-qualified Deferred Compensation Earnings ($) | | | All Other Compensa- tion ($) (2) | | | Total ($) | | | | Vered Caplan, CEO | | 2024 | | | | 249,075 | | | | - | | | | - | | | | 39,532 | | | | - | | | | - | | | | 75,105 | | | | 363,712 | | | | | | 2023 | | | | 259,029 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 82,355 | | | | 341,384 | | | | Victor Miller, CFO | | 2024 | | | | 168,000 | | | | - | | | | - | | | | 161,950 | | | | - | | | | - | | | | 22,548 | | | | 352,498 | | | | (1) | In accordance with SEC rules, the amounts in this column reflect the fair value on the grant date of the option awards granted to the named executive, calculated in accordance with ASC Topic 718. Stock options were valued using the Black-Scholes model. The grant-date fair value does not necessarily reflect the value of shares which may be received in the future with respect to these awards. The grant-date fair value of the stock options in this column is a non-cash expense for us that reflects the fair value of the stock options on the grant date and therefore does not affect our cash balance. The fair value of the stock options will likely vary from the actual value the holder receives because the actual value depends on the number of options exercised and the market price of our Common Stock on the date of exercise. For a discussion of the assumptions made in the valuation of the stock options, see Note 15 to this Annual Report on Form 10-K for the year ended December 31, 2024. No executive officers received options awards in the year ended December 31, 2024. See below for a summary of options awarded in previous years. | | | | | | | (2) | For 2024 and 2023, represents the compensation as described under the caption All Other Compensation below. | | *All Other Compensation* The following table provides information regarding each component of compensation for the years ended December 31, 2024 and 2023 included in the All Other Compensation column in the Summary Compensation Table above. Represents amounts paid in New Israeli Shekels (NIS) or Swiss Franks and converted at average exchange rates for the year. | Name | | Year | | | Automobile and Communication Related Expenses $ | | | Social Benefits $ (1) | | | Total $ | | | | Vered Caplan | | | 2024 2023 | | | | 2,416 2,627 | | | | 72,689 79,728 | | | | 75,105 82,355 | | | | Victor Miller | | | 2024 | | | | - | | | | 22,548 | | | | 22,548 | | | | (1) | These are comprised of contributions by us to savings, health, severance, pension, disability and insurance plans generally provided in Switzerland, including health, education, managerial insurance funds, and redeemed vacation pay. This amount represents Swiss severance fund payments, managerial insurance funds, disability insurance, supplemental education fund contribution and social securities. See discussion below under Narrative Disclosure to Summary Compensation Table Vered Caplan. | | | 75 | | ** *Outstanding Equity Awards at December 31, 2024* The following table summarizes the outstanding equity awards held by each named executive officer of our company as of December 31, 2024. | Name | | Grant Date | | Number of Shares Underlying Unexercised Options (#) Exercisable | | | Number of Shares Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | | | | | | | | | | | | | | | | | Vered Caplan | | 09-Dec-16(1) | | | 16,666 | | | | - | | | | 48 | | | 09-Dec-26 | | | | | 06-Jun-17(1) | | | 8,333 | | | | - | | | | 72 | | | 06-Jun-27 | | | | | 28-Jun-18(1) | | | 24,999 | | | | - | | | | 83.6 | | | 28-Jun-28 | | | | | 22-Oct-18(1) | | | 8,500 | | | | - | | | | 59.9 | | | 22-Oct-28 | | | | | 19-Mar-20(1) | | | 8,500 | | | | - | | | | 29.9 | | | 18-Mar-30 | | | | | 14-Jun-22(1) | | | 8,500 | | | | - | | | | 20.00 | | | 13-Jun-32 | | | | | 23-Jul-24(2) | | | 2,125 | | | | 6,375 | | | | 6.40 | | | 22-Jul-34 | | | Victor Miller | | 02-Jan-24(2) | | | 8,750 | | | | 8,750 | | | | 5 | | | 01-Jan-34 | | | | | 27-Jun-24(2) | | | 3,750 | | | | 16,250 | | | | 6.3 | | | 27-Jun-34 | | | (1) | The options were fully vested as of December 31, 2024. | | | (2) | The options vest on a quarterly basis over a period of two years from the date of grant. | | **Option Exercises and Stock Vested in 2024** The following table shows information regarding exercises of options to purchase our common stock and vesting of stock awards held by each executive officer named in the Summary Compensation Table during the year ended December 31, 2024. | | | | Option Awards | | | | Stock Awards | | | | Name | | | Number of Shares Acquired on Exercise (#) | | | | Value Realized on Exercise ($) (1) | | | | Number of Shares Acquired on Vesting (#) | | | | Value Realized on Vesting ($) | | | | (a) | | | (b) | | | | (c) | | | | (d) | | | | (e) | | | | Vered Caplan | | | 23,018 | | | | 183,921 | | | | - | | | | - | | | | Victor Miller | | | 2,500 | | | | 10,416 | | | | - | | | | - | | | **** (1) Amounts shown in this column do not necessarily represent actual value realized from the sale of the shares acquired upon exercise of options because in many cases the shares are not sold on exercise but continue to be held by the executive officer exercising the option. The amounts shown represent the difference between the option exercise price and the market price on the date of exercise, which is the amount that would have been realized if the shares had been sold immediately upon exercise. | 76 | | ** *Narrative Disclosure to Summary Compensation Table and Employment Agreements* **Vered Caplan** On August 14, 2014, our Board of Directors confirmed that Ms. Vered Caplan, who had served as our President and Chief Executive Officer on an interim basis since December 23, 2013, was appointed as our President and Chief Executive Officer. On November 19, 2020, we and Ms. Caplan entered into an executive directorship agreement, effective as of October 1, 2020 (the Executive Directorship Agreement), that superseded and replaced a previous employment agreement (the Prior Agreement). Pursuant to the Executive Directorship Agreement, Ms. Caplan will continue to serve the Company as its Chairperson of the Board of Directors (the Board) and shall receive in consideration for her serving as Chairperson of the Board an annual regular Board fee in the amount of $75,000 payable by the Company in equal quarterly installments in advance. In addition, Ms. Caplan may be eligible for non-recurring special Board fees as reviewed and approved by the Compensation Committee of the Board (the Compensation Committee) and then reviewed and ratified by the Board. In addition, Ms. Caplan may be granted option awards from time to time at the discretion of the Compensation Committee. Ms. Caplans position as Chairperson of the Board under the Executive Directorship Agreement may be terminated for any reason by either Ms. Caplan or the Company upon 90 days prior written notice (the Notice Period), provided that the Company may terminate such appointment as Chairperson at any time during the Notice Period subject to certain conditions. Such termination as Chairperson of the Board will be deemed a termination even if Ms. Caplan remains as a regular director of the Board. Upon termination by the Company of Ms. Caplans employment other than for cause or by Ms. Caplan for any reason whatsoever, in addition to any Accrued Obligations (as defined therein) she shall be entitled to receive a lump sum payment equal to the sum of (i) the annual regular Board fee (the Board Fee) and (ii) the greater of actual or target annual performance bonus to which she may have been entitled to as of the termination date (in each case, less all customary and required taxes and related deductions). Ms. Caplans position under the Executive Directorship Agreement may be terminated in the event of a Change of Control (as defined therein) by the Company other than for cause or by Ms. Caplan for any reason whatsoever. In the event of a Change of Control and if, within one year following such Change of Control, employment under the Executive Directorship Agreement is terminated by the Company other than for cause or by Ms. Caplan for any reason whatsoever, in addition to any Accrued Obligations, she shall be entitled to receive a lump sum payment equal to one and a half times the sum of (i) the Board Fee and (ii) the target annual performance remuneration to which she may have been entitled as of the termination date (in each case, less all customary and required taxes and related deductions). In addition, on November 19, 2020, Orgenesis Services Srl, a Swiss corporation and wholly-owned, direct subsidiary of the Company (Orgenesis Services), and Ms. Caplan entered into a personal employment agreement (the Swiss Employment Agreement and together with the Executive Directorship Agreement, the Agreements), pursuant to which Ms. Caplan will serve as Chief Executive Officer, President and Chairperson of the Board of Directors of Orgenesis Services and will be a material provider of services to the Company pursuant to a services agreement between the Company and Orgenesis Services. The Swiss Employment Agreement provides that Ms. Caplan is entitled to a monthly base salary of CHF 13,345.05 (equivalent to $14,583 based on the current exchange rate at signing), and an annual representation fee of CHF 24,000 (equivalent to $26,226 based on the current exchange rate at signing), payable in monthly installments of CHF 2,000. Ms. Caplan is eligible to receive a bonus at the absolute discretion of Orgenesis Services and its compensation committee. Ms. Caplan may also be granted option awards from time to time, as per the recommendation of the compensation committee of Orgenesis Services as reviewed and approved by the Compensation Committee. Under the Swiss Employment Agreement, Ms. Caplan is entitled to be paid annual vacation days, monthly travel allowance, sick leave, expenses reimbursement and a mobile phone. The Swiss Employment Agreement had an effective date as of October 1, 2020. | 77 | | Employment under the Swiss Employment Agreement may be terminated for any reason by Ms. Caplan or by Orgenesis Services other than for just cause (as defined therein) upon six months prior written notice or by Orgenesis Services other than for just cause in the event of a Change of Control (as defined therein) of the Company upon at least 12 months prior written notice. Upon termination by Orgenesis Services of Ms. Caplans employment without just cause or by Ms. Caplan for any reason whatsoever, in addition to any Accrued Obligations (as defined therein), she shall be entitled to receive a lump sum payment equal to the sum of (i) her Base Salary (as defined therein) at the rate in effect as of the termination date and (ii) the greater of actual or target annual performance bonus to which she may have been entitled to for the year in which employment terminates (in each case, less all customary and required taxes and employment-related deductions). In the event of a Change of Control and if, within one year following such Change of Control, employment is terminated by Orgenesis Services other than for cause or by Ms. Caplan for any reason whatsoever, in addition to any Accrued Obligations she shall be entitled to receive a lump sum payment equal to one and a half times the sum of (i) her Base Salary and (ii) the target annual performance bonus to which she may have been entitled to for the year in which employment terminates (in each case, less all customary and required taxes and employment-related deductions). The Swiss Employment Agreement provides for customary protections of Orgenesis confidential information and intellectual property. Ms. Caplan received an aggregate salary and board fee of $249,075 2024. As of December 31, 2024, the $225,000 chairperson fee for 2022 ,2023 and 2024 was unpaid, but accrued, per agreement by Ms. Caplan. In addition, in 2024 Ms. Caplan was awarded options to purchase 8,500 shares of common stock. Ms. Caplan received reimbursement for automobile and communication related expenses in the amount of $2,416 in 2024 and $2,627 in 2023. In addition, the Company contributed to savings, health, severance, pension, disability and insurance plans generally provided in Switzerland, including health, education, managerial insurance funds, and redeemed vacation pay in an amount equivalent to $72,689 in 2024 and $79,728 in 2023. These amounts represent Swiss severance fund payments, managerial insurance funds, disability insurance, supplemental education fund contribution and social securities. **Victor Miller** On December 28, 2023, the Company appointed Victor Miller as its Chief Financial Officer, effective January 2, 2024. In connection with Mr. Millers appointment as Chief Financial Officer, he entered into a personal employment agreement (the Miller Employment Agreement) with the Company setting forth his compensation and certain other terms. Pursuant to the Employment Agreement, Mr. Miller was entitled to receive an annual base salary of $335,000 and an annual cash bonus of up to 40% of his then-current base salary (the Annual Performance Bonus). The Annual Performance Bonus, if any, will be based upon the achievement of certain corporate and individual performance objectives. Additionally, pursuant to the Employment Agreement Mr. Miller will receive a grant of 200,000 stock options (the Stock Award) upon the commencement of his employment. The Stock Award is subject to the terms of the Companys equity compensation plan and a stock award agreement by and between the Company and Mr. Miller. The Stock Award will vest quarterly from the grant date (beginning March 31, 2024) over two years subject to Mr. Millers continued employment through each such vesting date. Pursuant to the Employment Agreement, Mr. Miller will be awarded an additional 200,000 stock options (or restricted stock units at Mr. Millers discretion) upon shareholder approval of an increase in the number of shares available under the Companys option plan and 95,000 stock options (or restricted stock units at Mr. Millers discretion) at the end of each calendar year of service, which will vest over 16 calendar quarters. Upon a Change in Control (as defined in the Employment Agreement), all unvested options and/or RSUs will vest immediately. The Employment Agreement also provides for the following severance payments upon termination by the Company without Cause (as defined in the Employment Agreement) or by Mr. Miller for Good Reason (as defined in the Employment Agreement): (i) payment of his then-current salary for a period of 4 months, with this period increasing by one month annually on the anniversary of the Commencement Date (as defined in the Agreement), up to a maximum of 6 months; (ii) subject to Mr. Millers co-payment of premium amounts and proper election to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), the Company will contribute an amount equal to the monthly employer contribution towards Mr. Millers health insurance. This will continue until the earliest of 12 months from termination, his eligibility for group health plan benefits under another employer, or the cessation of his continuation rights under COBRA. Payment in each case is subject to Mr. Millers execution of a release satisfactory to the Company following such termination. If Mr. Millers employment terminates as a result of voluntary resignation, termination for Cause (as defined in the Employment Agreement), disability or death, he shall be entitled to receive Accrued Obligations (as defined in the Employment Agreement), but will not be eligible for severance pay and benefits. | 78 | | Mr. Miller received an aggregate salary of $168,000 during 2024. In addition, in 2024 Mr. Miller was awarded options to purchase 40,000 shares of common stock of which 2,500 were exercised during the period ended December 31, 2024. In addition, the Company contributed to savings, health, severance, pension, disability and insurance plans, including health, education, managerial insurance funds, and redeemed vacation pay in an amount equivalent to $22,548 in 2024. These amounts represent severance fund payments, managerial insurance funds, disability insurance, supplemental education fund contribution and social securities. *Potential Payments upon Change of Control or Termination following a Change of Control* Our employment agreements with our named executive officers provide incremental compensation in the event of termination, as described above. Due to the factors that may affect the amount of any benefits provided upon the events described below, any actual amounts paid or payable may be different than those shown in this table. Factors that could affect these amounts include the basis for the termination, the date the termination event occurs, the base salary of an executive on the date of termination of employment and the price of our common stock when the termination event occurs. The following table sets forth the compensation that would have been received by each of our executive officers had they been terminated as of December 31, 2024. | Name | | Salary Continuation | | | | Vered Caplan | | $ | * | | (*) Termination by Company without cause: $250,000 Termination without cause following a change in control: $375,000 | 79 | | **** **Director Compensation** The following table sets forth for each non-employee director that served as a director during the year ended December 31, 2024: **Year Ended December 31, 2024** | Name | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) | | | Option Awards ($) (1) | | | Non-equity Incentive Plan Compensation ($) | | | Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($) | | | Total ($) | | | | Guy Yachin | | | 100,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 100,000 | | | | Yaron Adler | | | 60,000 | | | | - | | | | 1,323 | (2) | | | - | | | | - | | | | - | | | | 61,323 | | | | David Sidransky | | | 35,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 35,000 | | | | Ashish Nanda | | | 65,000 | | | | - | | | | 230,882 | (3) | | | - | | | | - | | | | - | | | | 295,822 | | | | Mario Philips | | | 16,667 | | | | | | | | 161,817 | (4) | | | | | | | | | | | | | | | 178,484 | | | | Pelavin Adam | | | | | | | | | | | 4,007 | (5) | | | | | | | | | | | | | | | 4,007 | | | | Bhalaji Jagannathan | | | | | | | | | | | 4,007 | (6) | | | | | | | | | | | | | | | 4,007 | | | | Nagaraj Santhosh | | | | | | | | | | | 4,007 | (7) | | | | | | | | | | | | | | | 4,007 | | | | Itzhak Vider | | | | | | | | | | | 3,718 | (8) | | | | | | | | | | | | | | | 3,718 | | | | (1) | In accordance with SEC rules, the amounts in this column reflect the fair value on the grant date of the option awards granted to the named executive, calculated in accordance with ASC Topic 718. Stock options were valued using the Black-Scholes model. The grant-date fair value does not necessarily reflect the value of shares which may be received in the future with respect to these awards. The grant-date fair value of the stock options in this column is a non-cash expense for us that reflects the fair value of the stock options on the grant date and therefore does not affect our cash balance. The fair value of the stock options will likely vary from the actual value the holder receives because the actual value depends on the number of options exercised and the market price of our common stock on the date of exercise. For a discussion of the assumptions made in the valuation of the stock options, see Note 15 (Stock Based Compensation) to our financial statements, which are included in this Annual Report on Form 10-K. | | | (2) | In respect of 1,750 options which was vested on December 12, 2025. | | | (3) | In respect of 1,835 options which was vested on December 12, 2025. | | | (4) | In respect of 26,698 options which was expired on June 27, 2025. | | | (5) | In respect of 1,250 options which was vested on December 12, 2025, and 625 options which will vest on December 12, 2027. | | | (6) | In respect of 1,875 options which was forfeited on December 26, 2024. | | | (7) | In respect of 1,458 options which was vested on December 12, 2025, and 208 will vest on December 12, 2026, and 209 will vest on December 12, 2027. | | | (8) | In respect of 208 options which was vested on July 8, 2025, 208 options which will vest on July 8, 2026, and 209 which will vest on July 8, 2027. | | All directors receive reimbursement for reasonable out of pocket expenses in attending Board of Directors meetings and for participating in our business. *Compensation Policy for Non-Employee Directors.* In January 2021, the Board of Directors adopted an updated compensation policy for non-employee directors which replaced the previous non-employee director compensation terms, and which became effective January 2021. Under the policy, each director is to receive an annual cash compensation of $40,000 and the Chairman or lead director is paid an additional $20,000 per annum. Each committee member will be paid an additional $10,000 per annum and the committee chairman of the Audit and Research and Development committees is to receive $20,000 per annum while the chairman of the other committees is to receive $15,000 per annum. Cash compensation will be made on a quarterly basis. All newly appointed directors also receive options to purchase up to 6,250 shares of our common stock. All directors are entitled to an annual bonus of options for 12,500 shares and each committee member is entitled to a further option to purchase up to 1,250 shares of common stock and each committee chairperson to options for an additional 2,100 shares of common stock. In addition, the Chairman and Vice Chairman shall be granted an option to purchase 4,200 shares of our common stock. In all cases, the options are granted at a per share exercise price equal to the closing price of our publicly traded stock on the date of grant and the vesting schedule is determined by the compensation committee at the time of grant. **** | 80 | | ** *Compensation Committee Interlocks and Insider Participation* None of our executive officers has served as a member of the Board of Directors, or as a member of the compensation or similar committee, of any entity that has one or more executive officers who served on our Board of Directors or Compensation Committee during the year ended December 31, 2024. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information with respect to the beneficial ownership of our common stock as of March 26, 2026 for (a) the named executive officers, (b) each of our directors, (c) all of our current directors and executive officers as a group and (d) each stockholder known by us to own beneficially more than 5% of our common stock. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. We deem shares of common stock that may be acquired by an individual or group within 60 days of March 26, 2026 pursuant to the exercise of options or warrants to be outstanding for the purpose of computing the percentage ownership of such individual or group but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Except as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them based on information provided to us by these stockholders. Percentage of ownership is based on 9,799,538 shares of common stock outstanding on March 26, 2026. *Security Ownership of Greater than 5% Beneficial Owners* | Name and Address of Beneficial Owner | | Amount and Nature of Beneficial Ownership (1) | | | Percent(1) | | | | Jacob Safier c/o The Wolfson Group, One State Street Plaza, 29th Floor New York, NY 10004 | | | 7,415,801 | (2) | | | 43.08 | % | | | Neurocords, LLC 838 Walker Road, Suite 21 Dover, DE 19904 | | | 1,200,000 | (3) | | | 10.91 | % | | | ALPHA PROSPERITY FUND c/o Orgenesis Inc. 20271 Goldenrod Lane Germantown, MD 20876 | | | 6,657,787 | (4) | | | 40.45 | % | | | Alpha Prosperity Fund SPC c/o Orgenesis Inc. 20271 Goldenrod Lane Germantown, MD 20876 | | | 80,007,446 | (5) | | | 89.09 | % | | *Security Ownership of Directors and Executive Officers* | Name and Address of Beneficial Owner | | Amount and Nature of Beneficial Ownership (1) | | | Percent(1) | | | | Vered Caplan c/o Orgenesis Inc. 20271 Goldenrod Lane Germantown, MD 20876 | | | 133,774 | (6) | | | 1.35 | % | | | Victor Miller c/o Orgenesis Inc. 20271 Goldenrod Lane Germantown, MD 20876 | | | 26,782 | (7) | | | <1% | | | | Itzhak Vider c/o Orgenesis Inc. 20271 Goldenrod Lane Germantown, MD 20876 | | | 1,708 | (8) | | | <1% | | | | Directors & Executive Officers as a Group (3 persons) | | | 162,264 | | | | 1.66 | % | | | 81 | | **** **Notes:** ** | (1) | Percentage of ownership is based on 9,799,538 shares of our common stock outstanding as of March 26, 2026. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants or convertible debt currently exercisable, or convertible or exercisable or convertible within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such options, warrants or convertible debt but are not deemed outstanding for purposes of computing the percentage ownership of any other person. | | | | | | | (2) | Consists of 7,415,801 shares of common stock issuable upon exercise of outstanding warrants at a price of $0.80 per share, exercisable until, September 2, 2030. | | | | | | | (3) | Consists of 1,200,000 shares of common stock. | | | | | | | (4) | Consists of (i) 1,296,561 shares of common stock, and (ii) 5,361,226 shares of common stock issuable upon exercise of outstanding warrants at a price of $0.80 per share, exercisable until, February 12, 2027. | | | | | | | (5) | Consists of (i) 3,289,490 shares of common stock, (ii) 3,782,913 shares of common stock issuable upon exercise of outstanding warrants at a price of $0.07 per share, exercisable until, September 10, 2028, (iii) 4,350,350 shares of common stock issuable upon exercise of outstanding warrants at a price of $0.06 per share, exercisable until, September 10, 2028, (iv) 5,002,903 shares of common stock issuable upon exercise of outstanding warrants at a price of $0.05 per share, exercisable until, September 10, 2028, (v) 12,369,677 shares of common stock issuable upon exercise of outstanding warrants at a price of $0.04 per share, exercisable until, September 10, 2028, (vi) 7,608,790 shares of common stock issuable upon exercise of outstanding warrants at a price of $0.03 per share, exercisable until, September 10, 2028, (vii) 8,750,108 shares of common stock issuable upon exercise of outstanding warrants at a price of $0.03 per share, exercisable until, September 16, 2028, (viii) 10,062,625 shares of common stock issuable upon exercise of outstanding warrants at a price of $0.02 per share, exercisable until, November 4, 2028, (ix) 11,539,975 shares of common stock issuable upon exercise of outstanding warrants at a price of $0.02 per share, exercisable until, December 15, 2028, and (x) 13,250,615 shares of common stock issuable upon exercise of outstanding warrants at a price of $0.02 per share, exercisable until, January 15, 2028. | | | 82 | | | (6) | Consists of (i) 50,838 shares of common stock, (ii)16,666 shares of common stock issuable upon exercise of outstanding options at a price of $48.00 per share, (iii)8,333 shares of common stock issuable upon exercise of outstanding options at a price of $72.00 per share, (iv)24,999 shares of common stock issuable upon exercise of outstanding options at a price of $83.60 per share, (v)8,500 shares of common stock issuable upon exercise of outstanding options at a price of $59.90 per share, (vi) 8,500 shares of common stock issuable upon exercise of outstanding options at a price of $29.90 per share, (vii) 8,500 shares of common stock issuable upon exercise of outstanding options at a price of $20.00 per share, and (viii) 7,438 shares of common stock issuable upon exercise of outstanding options at a price of $6.40 per share. Does not include option for 1,063 shares of common stock with an exercise price of $6.40 per share that are exercisable quarterly after March 31, 2026. | | | | | | | (7) | Consists of (i) 2,500 shares of common stock, (ii)15,000 shares of common stock issuable upon exercise of outstanding options at a price of $5.00 per share, (iii)7,500 shares of common stock issuable upon exercise of outstanding options at a price of $6.30 per share, and (iv)1,782 shares of common stock issuable upon exercise of outstanding options at a price of $2.15 per share. | | | | | | | (8) | Consists of (i) 208 shares of common stock issuable upon exercise of outstanding options at a price of $6.50 per share, and (ii) 1,500 shares of common stock issuable upon exercise of outstanding options at a price of $0.98 per share. Does not include option for 417 shares of common stock with an exercise price of $6.50 per share that are exercisable on July 8, 2026. | | ** *Securities Authorized for Issuance Under Existing Equity Compensation Plans* The following table summarizes certain information regarding our equity compensation plans as of December 31, 2024: | Plan Category | | Number of Securities to be Issued Upon Exercise of Outstanding Options | | | Weighted-Average Exercise Price of Outstanding Options and RSUs | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | | | | | | (a) | | | (b) | | | (c) | | | | Equity compensation plans approved by security holders (1) | | | 358,981 | | | | 29.24 | | | | 170,721 | | | | Equity compensation plans not approved by security holders | | | 47,495 | | | | 48.00 | | | | - | | | | Total | | | 406,476 | | | | 31.43 | | | | 170,721 | | | | (1) | Consists of the 2017 Equity Incentive Plan and the Global Share Incentive Plan (2012). For a short description of those plans, see Note 15 to our 2024 Consolidated Financial Statements included in this Annual Report on Form 10-K for the year ended December 31, 2024. | | **** | 83 | | **** ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE *Transactions with Related Persons* Except as set out below, as of December 31, 2024, there have been no transactions, or currently proposed transactions, in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any of the following persons had or will have a direct or indirect material interest: | | any director or executive officer of our company; | | | | any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock; | | | | any promoters and control persons; and | | | | any member of the immediate family (including spouse, parents, children, siblings and in laws) of any of the foregoing persons. | | Pursuant to our Audit Committee charter adopted in March 2017, the Audit Committee is responsible for reviewing and approving, prior to our entry into any such transaction, all transactions in which we are a participant and in which any parties related to us have or will have a direct or indirect material interest. *Named Executive Officers and Current Directors* For information regarding compensation for our named executive officers and current directors, see Executive Compensation. *Director Independence* See Directors, Executive Officers and Corporate Governance Director Independence and Directors, Executive Officers and Corporate Governance Board Committees in Item 10 above. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES **** Our Board of Directors has appointed Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited (PwC) as our independent registered public accounting firm for the years ended December 31, 2024 and 2023. The following table sets forth the fees billed to us for professional services rendered by PwC for the years ended December 31, 2024 and December 31, 2023: | | | Years Ended December 31, | | | | Services: | | 2024 | | | 2023 | | | | Audit Fees (1) | | $ | 226,000 | | | $ | 225,000 | | | | Audit-Related Fees (2) | | | 142,000 | | | | 42,000 | | | | Total fees | | $ | 368,000 | | | $ | 267,000 | | | | (1) | Audit fees consisted of audit work performed in the preparation of financial statements, as well as work generally only the independent registered public accounting firm can reasonably be expected to provide, such as statutory audits. | | | | | | | (2) | Audit related fees consisted principally of audits of employee benefit plans and special procedures related to regulatory filings in 2024. | | *Policy on Audit Committee Pre-Approval of Audit and Permissible Non-audit Services of Independent Public Accountant* Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm. Prior to engagement of an independent registered public accounting firm for the next years audit, management will submit an aggregate of services expected to be rendered during that year for each of four categories of services to the Audit Committee for approval. 1. **Audit**services include audit work performed in the preparation of financial statements, as well as work that generally only an independent registered public accounting firm can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and consultation regarding financial accounting and/or reporting standards. | 84 | | 2. **Audit-Related** services are for assurance and related services that are traditionally performed by an independent registered public accounting firm, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements. **** 3. **Tax** services include all services performed by an independent registered public accounting firms tax personnel except those services specifically related to the audit of the financial statements, and includes fees in the areas of tax compliance, tax planning, and tax advice. **** 4. **Other Fees** are those associated with services not captured in the other categories. We generally do not request such services from our independent registered public accounting firm. Prior to engagement, the Audit Committee pre-approves these services by category of service. The fees are budgeted, and the Audit Committee requires our independent registered public accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage our independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging our independent registered public accounting firm. The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting. PART IV ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES | (a) | | | c. | Financial Statements | | Our consolidated financial statements are set forth in Part II, Item 8 of this Annual Report on Form 10-K and are incorporated herein by reference. | d. | Financial Statement Schedules | | No financial statement schedules have been filed as part of this Annual Report on Form 10-K because they are not applicable or are not required or because the information is otherwise included herein. | e. | Exhibits required by Regulation S-K | | | No. | | Description | | | | | | | | 3.1 | | Articles of Incorporation, as amended (incorporated by reference to an exhibit to our registration statement on Form S-8, filed on August 7, 2020) | | | | | | | | 3.1 | | Certificate of Change of Orgenesis Inc. dated September 20, 2024 (incorporated by reference to an exhibit to our current report on Form 8-K, filed on September 23, 2024) | | | | | | | | 3.3 | | Amended and Restated Bylaws of the Company, as amended dated December 14, 2022 (incorporated by reference to an exhibit to our current report on Form 8-K, filed on December 19, 2022) | | | | | | | | 4.1 | | Description of Securities (incorporated by reference to an exhibit to our annual report on Form 10-K filed on March 9, 2020) | | | | | | | | 4.2 | | Form of Warrant (incorporated by reference to an exhibit to our current report on Form 8-K, filed on January 22, 2020) | | | 85 | | | 4.3 | | Form of Stock Option Agreement (incorporated by reference to an exhibit to our registration statement on Form S-8, filed on August 7, 2020) | | | | | | | | 4.4 | | Form of Warrant, dated as of September 13, 2021, issued in connection with Convertible Note Extension Agreements (incorporated by reference to an exhibit to our quarterly report on Form 10-Q, filed on November 4, 2021) | | | | | | | | 4.5 | | Form of Warrant, dated as of September 13, 2021, issued in connection with Convertible Note Extension Agreements (incorporated by reference to an exhibit to our quarterly report filed on Form 10-Q, filed November 4, 2021) | | | | | | | | 4.6 | | Form of Warrant (incorporated by reference to an exhibit to our current report on Form 8-K, filed on April 5, 2022) | | | | | | | | 4.7 | | Form of Warrant (incorporated by reference to an exhibit to our current report on Form 8-K, filed on April 25, 2022) | | | | | | | | 4.8 | | Form of Warrant (incorporated by reference to an exhibit to our current report on Form 8-K, filed on May 17, 2022) | | | | | | | | 4.9 | | Form of Warrant (incorporated by reference to an exhibit to our current report on Form 8-K, filed on May 23, 2022) | | | | | | | | 4.10 | | Form of Nir Additional Warrant, dated as of October 23, 2022 (incorporated by reference to an exhibit to our current report on Form 8-K, filed on October 27, 2022) | | | | | | | | 4.11 | | Form of Neumann Additional Warrant, dated as of October 23, 2022 (incorporated by reference to an exhibit to our current report on Form 8-K, filed on October 27, 2022) | | | | | | | | 4.12 | | Form of Warrant (incorporated by reference to an exhibit to our current report on Form 8-K, filed on January 13, 2023) | | | | | | | | 4.13 | | Form of Warrant (incorporated by reference to an exhibit to our current report on Form 8-K, filed on February 24, 2023) | | | | | | | | 4.14 | | Form of Warrant (incorporated by reference to an exhibit to our current report on Form 8-K, filed on November 8, 2023) | | | | | | | | 4.15 | | Form of Nir Warrant, dated as of January 1, 2024 (incorporated by reference to an exhibit to our current report on Form 8-K, filed on January 5, 2024) | | | | | | | | 4.16 | | Form of Lukach Warrant, dated as of January 1, 2024(incorporated by reference to an exhibit to our current report on Form 8-K, filed on January 5, 2024) | | | | | | | | 4.17 | | Form of March 2024 Warrant (incorporated by reference to an exhibit to our current report on Form 8-K, filed on March 7, 2024) | | | | | | | | 4.18 | | Form of March 2024 Warrant (incorporated by reference to an exhibit to our current report on Form 8-K, filed on March 7, 2024) | | | | | | | | 4.19 | | Form of Warrant issued to Jacob Safier (incorporated by reference to an exhibit to our current report on Form 8-K, filed on August 26, 2024) | | | | | | | | 10.3 | | 2017 Equity Incentive Plan (incorporated by reference to an exhibit to our definitive proxy statement on Schedule 14A, filed on March 30, 2017) | | | | | | | | 10.6 | | Executive Directorship Agreement between the Company and Vered Caplan dated November 19, 2020 (incorporated by reference to an exhibit to our annual report on Form 10-K filed on March 9, 2021) | | | | | | | | 10.7 | | Swiss Employment Agreement between the Company and Vered Caplan dated November 19, 2020 (incorporated by reference to an exhibit to our annual report on Form 10-K filed on March 9, 2021) | | | | | | | | 10.8 | | Convertible Loan Agreement, dated as of August 24, 2021, between the Company and Image Securities FCZ (incorporated by reference to an exhibit to our quarterly report on Form 10-Q, filed on November 4, 2021) | | | 86 | | | 10.17 | | Convertible Loan Agreement, dated May 17, 2022, by and among the Company and Southern Israel Bridging Fund Two, LP (incorporated by reference to an exhibit to our current report on Form 8-K, filed on May 17, 2022) | | | | | | | | 10.28 | | Global Share Incentive Plan (2012) (incorporated by reference to an exhibit to our current report on Form 8-K, filed on May 31, 2012) | | | | | | | | 10.29 | | Appendix Israeli Taxpayers Global Share Incentive Plan (2012) (incorporated by reference to an exhibit to our current report on Form 8-K, filed on May 31, 2012) | | | | | | | | 10.30 | | Convertible Loan Agreement, dated January 10, 2023, by and among the Company and NewTech Investment Holdings, LLC (incorporated by reference to an exhibit to our current report on Form 8-K, filed on January 13, 2023) | | | | | | | | 10.31 | | Convertible Loan Agreement, dated January 10, 2023, by and among the Company and Ariel Malik (incorporated by reference to an exhibit to our current report on Form 8-K, filed on January 13, 2023) | | | | | | | | 10.42 | | Unit Purchase Agreement, dated as of January 29, 2024, between the Company and MM OS Holdings L.P. (incorporated by reference to an exhibit to our current report on Form 8-K, filed on January 31, 2024) | | | | | | | | 10.43 | | Binding Term Sheet, dated as of February 26, 2024, between Orgenesis Maryland LLC and Germfree Laboratories LLC* (incorporated by reference to an exhibit to our current report on Form 8-K, filed on March 1, 2024) | | | | | | | | 10.44 | | Securities Purchase Agreement, dated March 3, 2024, by and among the Company and the Investors (incorporated by reference to an exhibit to our current report on Form 8-K, filed on March 7, 2024) | | | 87 | | | 10.49 | | Loan Agreement dated July 3, 2024, by and among the Borrower and Yehuda Nir (incorporated by reference to an exhibit to our current report on Form 8-K, filed on July 8, 2024) | | | | | | | | 10.50 | | Asset Purchase Agreement, dated as of July 10, 2024, between Orgenesis Inc. and Broaden Bioscience and Technology Corp.* (incorporated by reference to an exhibit to our current report on Form 8-K, filed on July 12, 2024) | | | | | | | | 10.51 | | Asset Purchase Agreement, dated as of July 12, 2024, among Orgenesis Inc., Theracell Advanced Biotechnology S.A, Theracell Advanced Biotechnology LTD and IDNA Genomics Public Limited* (incorporated by reference to an exhibit to our current report on Form 8-K, filed on July 12, 2024) | | | | | | | | 10.51 | | Strategic Partnership Agreement, dated as of August 9, 2024, by and between Orgenesis Inc. and Harley Street Healthcare Group (London) Plc Ltd.* (incorporated by reference to an exhibit to our current report on Form 8-K, filed on August 14, 2024) | | | | | | | | 10.52 | | Amended and Restated Promissory Note, dated as of August 23, 2024, by and between Orgenesis Maryland LLC, Jacob Safier and Orgenesis Inc. (incorporated by reference to an exhibit to our current report on Form 8-K, filed on August 26, 2024) | | | | | | | | 10.53 | | Loan Extension Agreement, dated as of October 31, 2024, by and between Koligo Therapeutics, Inc., the Company and Yehuda Nir (incorporated by reference to an exhibit to our current report on Form 8-K, filed on November 5, 2024) | | | | | | | | 10.54 | | Loan Agreement, dated as of October 31, 2024, by and between Koligo Therapeutics, Inc., the Company and Yehuda Nir (incorporated by reference to an exhibit to our current report on Form 8-K, filed on November 5, 2024) | | | | | | | | 10.55 | | Promissory Note, dated as of November 4, 2024, by and between Orgenesis Maryland LLC, the Company and Jacob Safier (incorporated by reference to an exhibit to our current report on Form 8-K, filed on November 5, 2024) | | | | | | | | 21.1* | | List of Subsidiaries of Orgenesis Inc. | | | | | | | | 23.1* | | Consent of independent registered public accounting firm | | | | | | | | 31.1* | | Certification Statement of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 | | | | | | | | 31.2* | | Certification Statement of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 | | | | | | | | 32.1** | | Certification Statement of the Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 | | | | | | | | 32.2** | | Certification Statement of the Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 | | | | | | | | 101.INS | | Inline XBRL Instance Document | | | 101.SCH | | Inline XBRL Taxonomy Extension Schema Document | | | 101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | | 101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document | | | 101.LAB | | Inline XBRL Taxonomy Extension Labels Linkbase Document | | | 101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | | 104 | | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) | | *Filed herewith **Furnished herewith ITEM 16. FORM 10-K SUMMARY **** Not applicable. **** | 88 | | **** SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. **ORGENESIS INC.** | By: | /s/ Vered Caplan | | | | Vered Caplan | | | | | Chief Executive Officer and Chairperson of the Board of Directors (Principal Executive Officer) | | | | Date: | March 26, 2026 | | | | By: | /s/ Douglas Karriker | | | | | Douglas Karriker | | | | | Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) | | | | Date: | March 26, 2026 | | | Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. | By: | /s/ Vered Caplan | | | | | Vered Caplan | | | | | Chief Executive Officer and Chairperson of the Board of Directors (Principal Executive Officer) | | | | Date: | March 26, 2026 | | | | By: | /s/ Douglas Karriker | | | | | Douglas Karriker | | | | | Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) | | | | Date: | March 26, 2026 | | | | By: | /s/ Yaron Adler | | | | | Yaron Adler | | | | | Director | | | | Date: | March 26, 2026 | | | | By: | /s/ Adam Pelavin | | | | | Adam Pelavin | | | | | Director | | | | Date: | March 26, 2026 | | | | By: | /s/ Itzhak Vider | | | | | Itzhak Vider | | | | | Director | | | | Date: | March 26, 2026 | | | | 89 | | **** ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA **** **ORGENESIS INC.** **CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2024** **** TABLE OF CONTENTS | | Page | | | | | | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB name: Kesselman & Kesselman C.P.A.s; PCAOB ID: 1309) | F-2 | | | | | | | CONSOLIDATED FINANCIAL STATEMENTS: | | | | | | | | Consolidated Balance Sheets | F-4 | | | | | | | Consolidated Statements of Comprehensive Loss | F-6 | | | | | | | Consolidated Statements of Changes in (Capital deficiency) | F-7 | | | | | | | Consolidated Statements of Cash Flows | F-9 | | | | | | | Notes to Consolidated Financial Statements | F-10 | | | F-1 | | Report of Independent Registered Public Accounting Firm **** To the Board of Directors and shareholders of Orgenesis Inc. **** **Opinion on the Financial Statements** We have audited the accompanying consolidated balance sheets of Orgenesis Inc and its subsidiaries (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of comprehensive loss (income), changes in equity and cash flows for the years then ended, including the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America. *Substantial Doubt about the Companys Ability to Continue as a Going Concern* **** The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1b to the consolidated financial statements, the Company has suffered recurring losses from operations and has incurred cash outflows from operating activities that raise substantial doubt about its ability to continue as a going concern. Managements plans in regard to these matters are also described in Note 1b. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. **Basis for Opinion** These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. | F-2 | | Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. **Critical Audit Matters** Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. We determined there are no critical audit matters. | | Kesselman & Kesselman | | | | Certified Public Accountants (Isr.) | | | | A member of PricewaterhouseCoopers International Limited | | Haifa, Israel March 26, 2026 **** We have served as the Companys auditor since 2012. | F-3 | | **ORGENESIS INC.** **CONSOLIDATED BALANCE SHEETS** **(U.S. Dollars, in thousands, except share and per share amounts)** **** | | | 2024 | | | 2023 | | | | | | December 31, | | | | | | 2024 | | | 2023 | | | | Assets | | | | | | | | | CURRENT ASSETS: | | | | | | | | | | | Cash and cash equivalents | | $ | 78 | | | $ | 837 | | | | Restricted cash | | | 609 | | | | 642 | | | | Accounts receivable, net of credit losses of December 31, 2024 $14,281 ($0 as of December 31, 2023) | | | 40 | | | | 88 | | | | Prepaid expenses and other receivables | | | 34 | | | | 2,017 | | | | Receivables from related parties | | | - | | | | 458 | | | | Inventory | | | - | | | | 34 | | | | Total current assets | | | 761 | | | | 4,076 | | | | NON CURRENT ASSETS: | | | | | | | | | | | Deposits | | $ | 12 | | | $ | 38 | | | | Equity investees | | | - | | | | 8 | | | | Property, plants and equipment, net | | | 578 | | | | 1,475 | | | | Intangible assets, net | | | - | | | | 7,375 | | | | Operating lease right-of-use assets | | | - | | | | 351 | | | | Goodwill | | | - | | | | 1,211 | | | | Other assets | | | - | | | | 18 | | | | Total non-current assets | | | 590 | | | | 10,476 | | | | TOTAL ASSETS | | $ | 1,351 | | | $ | 14,552 | | | | F-4 | | **ORGENESIS INC.** **CONSOLIDATED BALANCE SHEETS** **(U.S. Dollars, in thousands, except share and per share amounts)** **** | | | December 31, | | | | | | 2024 | | | 2023 | | | | Liabilities and equity | | | | | | | | | | | CURRENT LIABILITIES: | | | | | | | | | | | Short-term bank credit | | $ | 40 | | | $ | - | | | | Accounts payable | | | 10,428 | | | | 6,451 | | | | Accounts payable related Parties | | | 2,695 | | | | 133 | | | | Accounts payable | | | 2,695 | | | | 133 | | | | Accrued expenses and other payables | | | 2,345 | | | | 2,218 | | | | Income tax payable | | | 781 | | | | 740 | | | | Employees and related payables | | | 2,122 | | | | 1,079 | | | | Other payable related parties | | | - | | | | 52 | | | | Advance payments on account of grant | | | 72 | | | | 2,180 | | | | Short-term loans | | | 6,183 | | | | 650 | | | | Current maturities of finance leases | | | 25 | | | | 18 | | | | Current maturities of operating leases | | | 234 | | | | 216 | | | | Short-term and current maturities of convertible loans | | | 1,995 | | | | 2,670 | | | | TOTAL CURRENT LIABILITIES | | | 26,920 | | | | 16,407 | | | | | | | | | | | | | | | LONG-TERM LIABILITIES: | | | | | | | | | | | Non-current operating leases | | $ | 1,308 | | | $ | 96 | | | | Loans payable | | | 2,895 | | | | - | | | | Convertible loans | | | 5,578 | | | | 18,967 | | | | Finance leases | | | 1 | | | | 4 | | | | Contingent consideration (see note 4) | | | - | | | | - | | | | Other long-term liabilities | | | 2,182 | | | | 61 | | | | TOTAL LONG-TERM LIABILITIES | | | 11,964 | | | | 19,128 | | | | TOTAL LIABILITIES | | | 38,884 | | | | 35,535 | | | | | | | | | | | | | | | EQUITY (CAPITAL DEFICIENCY): | | | | | | | | | | | Common stock of $0.0001 par value: | | | | | | | | | | | Authorized at December 31, 2024 and December 31, 2023: 14,583,333 shares; Issued at December 31, 2024 and December 31, 2023: 5,199,963 and 3,216,363 shares, respectively; Outstanding at December 31, 2024 and December 31, 2023: 5,171,306 and 3,187,706 shares, respectively. | | | 5 | | | | 3 | | | | Common stock of $0.0001 par value Authorized at December 31, 2024 and December 31, 2023: 14,583,333 shares; Issued at December 31, 2024 and December 31, 2023: 5,199,963 and 3,216,363 shares, respectively; Outstanding at December 31, 2024 and December 31, 2023: 5,171,306 and 3,187,706 shares, respectively. | | | 5 | | | | 3 | | | | Additional paid-in capital | | | 188,163 | | | | 156,837 | | | | Accumulated other comprehensive income | | | 384 | | | | 65 | | | | Treasury stock 286,567 shares as of December 31, 2024 and December 31, 2023 | | | (1,266 | ) | | | (1,266 | ) | | | Accumulated deficit | | | (224,787 | ) | | | (176,622 | ) | | | Equity attributable to Orgenesis Inc. | | | (37,501 | ) | | | (20,983 | ) | | | Non-controlling interests | | | (32 | ) | | | - | | | | TOTAL EQUITY (CAPITAL DEFICIENCY) | | | (37,533 | ) | | | (20,983 | ) | | | TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY (CAPITAL DEFICIENCY) | | $ | 1,351 | | | $ | 14,552 | | | The accompanying notes are an integral part of these consolidated financial statements. All share amounts have been retroactively adjusted to reflect a 1-for-10 reverse share split (See note 1) | F-5 | | **ORGENESIS INC.** **CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (INCOME)** **(U.S. Dollars, in thousands, except share and per share amounts)** **** | | | 2024 | | | 2023 | | | | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | Revenues | | $ | 1,035 | | | $ | 530 | | | | Cost of revenues | | | 1,928 | | | | 6,255 | | | | Gross loss | | $ | (893 | ) | | $ | (5,725 | ) | | | Cost of development services and research and development expenses | | | 9,622 | | | | 10,623 | | | | Amortization of intangible assets | | | 728 | | | | 721 | | | | Change in Contingent consideration | | | (4,643 | ) | | | - | | | | Selling, general and administrative expenses included credit losses of $2,724 for the year ended December 31, 2024 and ($24,367 for the year ended December 31, 2023) | | | 14,822 | | | | 35,134 | | | | Share in net loss of associated companies | | | 8 | | | | 734 | | | | Impairment of investment | | | - | | | | 699 | | | | Impairment of long-lived assets | | | 18,338 | | | | - | | | | Operating loss | | $ | 39,768 | | | $ | 53,636 | | | | Loss (profit) from deconsolidation of OBI, Korea, Belgium, Services and Octomera (see note 3 and note 20) | | | (4,480 | ) | | | 5,343 | | | | Other income, net | | | (606 | ) | | | (4 | ) | | | Loss from extinguishment in connection with loans | | | 5,422 | | | | 283 | | | | Credit loss on convertible loan receivable | | | - | | | | 2,688 | | | | Financial expenses, net | | | 4,508 | | | | 2,499 | | | | Inducement expense on conversion of convertible loans | | | 4,304 | | | | - | | | | Loss before income taxes | | $ | 48,916 | | | $ | 64,445 | | | | Tax expense | | | 97 | | | | 473 | | | | Net loss | | $ | 49,013 | | | $ | 64,918 | | | | Net (loss) income attributable to non-controlling interests | | | (848 | ) | | | (9,557 | ) | | | Net loss attributable to Orgenesis Inc. | | $ | 48,165 | | | $ | 55,361 | | | | | | | | | | | | | | | Loss per share: | | | | | | | | | | | Basic and diluted | | $ | 11.44 | | | $ | 19.08 | | | | | | | | | | | | | | | Weighted average number of shares used in computation of Basic and Diluted loss per share: | | | | | | | | | | | Basic and diluted | | | 4,210,839 | | | | 2,900,787 | | | | | | | | | | | | | | | Comprehensive loss: | | | | | | | | | | | Net loss | | $ | 49,013 | | | $ | 64,918 | | | | Other Comprehensive loss Translation adjustment | | | (853 | ) | | | 49 | | | | Release of translation adjustment due to deconsolidation of Orgenesis Korea and the Belgian Subsidiary in 2024 (Octomera in 2023) | | | 534 | | | | (384 | ) | | | Comprehensive loss | | $ | 48,694 | | | $ | 64,583 | | | | Comprehensive (loss) income attributed to non-controlling interests | | | (848 | ) | | | (9,557 | ) | | | Comprehensive loss attributed to Orgenesis Inc. | | $ | 47,846 | | | $ | 55,026 | | | The accompanying notes are an integral part of these consolidated financial statements. All share amounts have been retroactively adjusted to reflect a 1-for-10 reverse share split (See note 1) **** | F-6 | | **ORGENESIS INC.** **CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CAPITAL DEFICIENCY)** **(U.S. Dollars, in thousands, except share amounts)** **** | | | | Number | | | | Par Value | | | | Additional Paid-in Capital | | | Comprehensive Income (loss) | | | | Treasury Shares | | | | Accumulated Deficit | | | | to Orgenesis Inc. | | | | Non- Controlling Interest | | | | Total | | | | | | | Common Stock | | | Accumulated Other | | | | | | | | | | | | Equity Attributable | | | | | | | | | | | | | | Number | | | | Par Value | | | | Additional Paid-in Capital | | | Comprehensive Income (loss) | | | | Treasury Shares | | | | Accumulated Deficit | | | | to Orgenesis Inc. | | | | Non- Controlling Interest | | | | Total | | | | Balance at January 1, 2024 | | | 3,187,489 | | | $ | 3 | | | $ | 156,837 | | | $ | 65 | | | $ | (1,266 | ) | | $ | (176,622 | ) | | $ | (20,983 | ) | | $ | - | | | $ | (20,983 | ) | | | Changes during the Year ended December 31, 2024: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock-based compensation to employees and directors | | | - | | | | - | | | | 359 | | | | - | | | | - | | | | - | | | | 359 | | | | - | | | | 359 | | | | RSUs vested | | | 12,410 | | | | -* | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | Exercise of options | | | 25,519 | | | | -* | | | | 13 | | | | - | | | | - | | | | - | | | | 13 | | | | - | | | | 13 | | | | Issuance of shares to service providers | | | 119,896 | | | | -* | | | | 1,629 | | | | - | | | | - | | | | - | | | | 1,629 | | | | - | | | | 1,629 | | | | Exchange of convertible loans for equity | | | 1,577,694 | | | | 1 | | | | 20,310 | | | | - | | | | - | | | | - | | | | 20,311 | | | | - | | | | 20,311 | | | | Issuance of warrants with respect to loans (see note 9) | | | - | | | | - | | | | 1,459 | | | | - | | | | - | | | | - | | | | 1,459 | | | | - | | | | 1,459 | | | | Extinguishment in connection with convertible loan restructuring (see note 10 and note 11) | | | - | | | | - | | | | 5,421 | | | | - | | | | - | | | | - | | | | 5,421 | | | | - | | | | 5,421 | | | | Issuance of shares and warrants | | | 242,272 | | | | -* | | | | 2,496 | | | | - | | | | - | | | | - | | | | 2,496 | | | | - | | | | 2,496 | | | | NCI arising from Octomera reconsolidation | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 408 | | | | 408 | | | | Transaction with NCI (see note 3) | | | - | | | | | | | | (408 | ) | | | - | | | | - | | | | - | | | | (408 | ) | | | 408 | | | | - | | | | Issuance of shares due to exercise of warrants | | | 6,026 | | | | 1 | | | | 47 | | | | - | | | | - | | | | - | | | | 48 | | | | - | | | | 48 | | | | Comprehensive income (loss) for the period | | | - | | | | - | | | | - | | | | 319 | | | | - | | | | (48,165 | ) | | | (47,846 | ) | | | (848 | ) | | | (48,694 | ) | | | Balance at December 31, 2024 | | | 5,171,306 | | | | 5 | | | | 188,163 | | | | 384 | | | | (1,266 | ) | | | (224,787 | ) | | | (37,501 | ) | | | (32 | ) | | | (37,533 | ) | | * Represents an amount lower than $1 **All share amounts have been retroactively adjusted to reflect a 1-for-10 reverse share split (See note 1) The accompanying notes are an integral part of these consolidated financial statement. | F-7 | | **ORGENESIS INC.** **CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY** **(U.S. Dollars, in thousands, except share amounts)** **** | | | | Common Stock | | | | Accumulated Other | | | | | | | | | | | | Equity Attributable | | | | | | | | | | | | | | | Number | | | | Par Value | | | | Additional Paid-in Capital | | | | Comprehensive Income (loss) | | | | Treasury Shares | | | | Accumulated Deficit | | | | to Orgenesis Inc. | | | | Non- Controlling Interest | | | | Total | | | | Balance at January 1, 2023 | | | 2,554,356 | | | $ | 3 | | | $ | 150,355 | | | $ | (270 | ) | | $ | (1,266 | ) | | $ | (121,261 | ) | | $ | 27,561 | | | $ | 1,510 | | | $ | 29,071 | | | | Changes during the Year ended December 31, 2023: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock-based compensation to employees and directors | | | - | | | | - | | | | 415 | | | | - | | | | - | | | | - | | | | 415 | | | | - | | | | 415 | | | | Stock-based compensation to service providers | | | - | | | | - | | | | 48 | | | | - | | | | - | | | | - | | | | 48 | | | | - | | | | 48 | | | | Issuance of shares and warrants net of issuance costs | | | 535,764 | | | | -* | | | | 5,283 | | | | - | | | | - | | | | - | | | | 5,283 | | | | - | | | | 5,283 | | | | Issuance of Shares due to exercise of warrants | | | 97,369 | | | | -* | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | Issuance of warrants with respect to convertible loans | | | - | | | | - | | | | 449 | | | | - | | | | - | | | | - | | | | 449 | | | | - | | | | 449 | | | | Extinguishment in connection with convertible loan restructuring | | | - | | | | - | | | | 287 | | | | - | | | | - | | | | - | | | | 287 | | | | - | | | | 287 | | | | Deconsolidation of Octomera | | | - | | | | - | | | | 9,406 | | | | 384 | | | | - | | | | - | | | | 9,790 | | | | (1,360 | ) | | | 8,430 | | | | Adjustment to redemption value of redeemable non-controlling interest | | | - | | | | - | | | | (9,406 | ) | | | - | | | | - | | | | - | | | | (9,406 | ) | | | - | | | | (9,406 | ) | | | Comprehensive income (loss) for the period | | | - | | | | - | | | | - | | | | (49 | ) | | | - | | | | (55,361 | ) | | | (55,410 | ) | | | (150 | ) | | | (55,560 | ) | | | Balance at December 31, 2023 | | | 3,187,489 | | | | 3 | | | | 156,837 | | | | 65 | | | | (1,266 | ) | | | (176,622 | ) | | | (20,983 | ) | | | - | | | | (20,983 | ) | | | * | Represents an amount lower than $1 | | All share amounts have been retroactively adjusted to reflect a 1-for-10 reverse share split The accompanying notes are an integral part of these consolidated financial statements. | F-8 | | **ORGENESIS INC.** **CONSOLIDATED STATEMENTS OF CASH FLOWS(*)** **(U.S. Dollars, in thousands)** **** | | | 2024 | | | 2023 | | | | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | Net loss | | $ | (49,013 | ) | | $ | (64,918 | ) | | | Adjustments required to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | Stock-based compensation | | | 3,194 | | | | 463 | | | | Convertible loans induced conversion expenses | | | 4,304 | | | | - | | | | Capital gain, net | | | (1,580 | ) | | | - | | | | Loss (gain) from deconsolidation of OBI, Korea and Belgium subsidiaries in 2024 (Octomera in 2023) | | | (4,480 | ) | | | 5,343 | | | | Share in loss of associated companies, net | | | 8 | | | | 734 | | | | Depreciation and amortization expenses | | | 2,086 | | | | 1,560 | | | | Credit loss on convertible loan receivable | | | - | | | | 2,688 | | | | Credit loss net related to OBI, Korea and Belgium subsidiaries | | | 2,049 | | | | - | | | | Impairment of investment (see note 2) | | | - | | | | 699 | | | | Impairment expenses (see note 2) | | | 18,338 | | | | - | | | | Effect of exchange differences on inter-company balances | | | 2,447 | | | | 227 | | | | Net changes in operating leases | | | 1,588 | | | | (50 | ) | | | Change in Contingent consideration | | | (4,643 | ) | | | - | | | | Interest expense accrued on loans and convertible loans | | | 1,538 | | | | 1,508 | | | | Loss from extinguishment in connection with convertible loan restructuring | | | 5,422 | | | | 283 | | | | Changes in operating assets and liabilities: | | | | | | | | | | | Accounts receivable | | | 130 | | | | 30,060 | | | | Prepaid expenses, other accounts receivable | | | 2,262 | | | | 432 | | | | Inventory | | | 34 | | | | (389 | ) | | | Other assets | | | 43 | | | | 13 | | | | Related parties, net | | | (2 | ) | | | (439 | ) | | | Accounts payable | | | (1,279 | ) | | | 5,516 | | | | Accrued expenses and other payable | | | (820 | ) | | | 1,013 | | | | Employee and related payables | | | 1,300 | | | | 411 | | | | Deferred taxes, net | | | (2 | ) | | | 9 | | | | Net cash used in operating activities | | $ | (17,076 | ) | | $ | (14,837 | ) | | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | Decrease in loan to associate entities | | | - | | | | 55 | | | | Purchase of property, plants and equipment | | | (263 | ) | | | (2,096 | ) | | | Investment in associated company | | | - | | | | (660 | ) | | | Cash acquired from acquisition of Octomera (see note 3) | | | 139 | | | | - | | | | Impact to cash resulting from deconsolidation of OBI, Korea and Belgium subsidiaries (see note 20) | | | (11 | ) | | | - | | | | Impact to cash resulting from deconsolidation | | | - | | | | (973 | ) | | | Investment in long-term deposits | | | 500 | | | | (33 | ) | | | Net cash used in investing activities | | $ | 365 | | | $ | (3,707 | ) | | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | Proceeds from issuance of shares due to exercise of options and warrants (net of transaction costs) | | | 2,556 | | | | 5,283 | | | | Proceeds from issuance of convertible loans | | | 75 | | | | 5,735 | | | | Proceeds from transaction with redeemable non-controlling interest that do not result in a loss of control | | | - | | | | 5,000 | | | | Repayment of convertible loans and convertible bonds | | | - | | | | (3,000 | ) | | | Repayment of short and long-term debt | | | (226 | ) | | | (35 | ) | | | Proceeds from issuance of loans payable | | | 6,060 | | | | 635 | | | | Grant received in respect of third party | | | 774 | | | | - | | | | Receipt from Germfree (see note 13f) | | | 6,720 | | | | - | | | | Net cash provided by financing activities | | $ | 15,959 | | | $ | 13,618 | | | | NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | | | (752 | ) | | | (4,926 | ) | | | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | $ | (40 | ) | | $ | 36 | | | | CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR | | $ | 1,479 | | | $ | 6,369 | | | | CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR | | $ | 687 | | | $ | 1,479 | | | | | | | | | | | | | | | SUPPLEMENTAL NON-CASH FINANCING AND INVESTING ACTIVITIES | | | | | | | | | | | Right-of-use assets obtained in exchange for new finance lease liabilities | | $ | 16,007 | | | $ | - | | | | Right-of-use assets obtained in exchange for new operation lease liabilities | | $ | 405 | | | $ | 752 | | | | Increase (decrease) in accounts payable related to purchase of property, plant and equipment | | $ | - | | | $ | 14 | | | | Extinguishment in connection with convertible loan restructuring | | | 5,281 | | | $ | 287 | | | | | | | | | | | | | | | CASH PAID DURING THE YEAR FOR: | | | | | | | | | | | Interest | | $ | 4 | | | $ | 785 | | | The accompanying notes are an integral part of these consolidated financial statements. | F-9 | | **** **ORGENESIS INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** (All monetary amounts are expressed in thousands of US dollars (unless stated otherwise), except for share and loss per share amounts. **** **NOTE 1 DESCRIPTION OF BUSINESS** | a. | General | | Orgenesis Inc. (the Company) is a global biotech company working to unlock the promise of cell and gene therapies (CGTs) in an affordable and accessible offering. CGTs can use the patients own cells (autologous), or use donor cells (allogenic), and for regulatory purposes, are classified as Advanced Therapy Medicinal Products (ATMPs). We are primarily focused on pioneering a paradigm-shifting decentralized approach to CGT therapies utilizing an automated and/or closed approach validated for compliant production at or near the patient care site (Decentralized Cell Processing or DCP Platform). This approach has the potential to overcome the limitations of traditional centralized processing methods due to their complex logistics and inefficient unscalable processing methods leading to cost prohibitive products that currently limit the number of patients that can have access to these therapies. To overcome the challenges posed by traditional centralized processing methods, the Company has designed and implemented its DCP Platform - a scalable hub and spoke infrastructure of analytical centers overseeing standardized production platforms, technology and services governed by a central quality system, focusing on replicability and standardization of infrastructure and equipment with centralized monitoring and data management. Features of the DCP Platform include a locally implemented quality system, Standard Operating Procedures (SOPs), Good Manufacturing Practices (GMP), training procedures, quality-control testing and hub oversight of the actual production. The Company is leveraging its unique approach to therapy production using its DCP Platform and various manufacturing platforms to address some of the quality, supply chain, scale-up and production challenges, adapting these therapies to validated manufacturing platforms that are adapted to standardized production units that can be placed quickly and a low cost throughout its DCP network. To achieve these goals, the Company is developing a pipeline of POCare advanced therapies that can be processed and produced under such closed and automated processes and systems (POCare Therapies) as well as developing a collaborative worldwide network of academia, hospitals, and industry partners (POCare Network) who are collaborating with the Company to build its DCP Platform. On January 29, 2024 (date of reconsolidation), the Company and an affiliate of Metalmark Capital Partners (Metalmark or MM) entered into a Unit Purchase Agreement (the UPA), pursuant to which the Company acquired all of the preferred units of Octomera owned by MM (the Acquisition). Accordingly, the Company currently owns 100% of the equity interests of Octomera. The Company had previously deconsolidated Octomera from its consolidated financial statements (See note 3). These consolidated financial statements include the accounts of Orgenesis Inc. and its subsidiaries. During 2024, the Company acquired Octomera (see note 3) and deconsolidated its OBI, Korea and Belgium subsidiaries (see note 20). On September 20, 2024, the Company implemented a 1-for-10 reverse stock split (the Reverse Split) of its authorized and outstanding shares of Common Stock. All share and per share amounts in these financial statements have been retroactively adjusted to reflect the reverse split as if it had been effected prior to the earliest financial statement period included herein. Following the Reverse Split, the number of authorized shares of common stock that the Company is authorized to issue from time to time is 14,583,333 shares. | F-10 | | The Companys common stock, par value $0.0001 per share (the Common Stock), is traded on the OTCQX under the symbol ORGS. On September 27, 2023, the Company received a notice from the Listing Qualifications Staff (Staff) of The Nasdaq Stock Market LLC (Nasdaq) stating that the bid price of the Common Stock had closed at less than $1.00 per share over the previous 30 consecutive business days, and, as a result, did not comply with Listing Rule 5550(a)(2) (the Bid Price Rule). On April 17, 2024, the Company received a notice (the Notice) from the Staff in which it determined that in accordance with Listing Rule 5810(c)(2)(A), the Staff stated that it could not accept a plan to regain compliance and the Staff stated that the Companys securities would be delisted from The Nasdaq Capital Market unless the Company timely requested a hearing before a Nasdaq Hearings Panel (the Panel) to address the deficiencies and present a plan to regain compliance. As permitted by the Notice, the Company timely requested a hearing before the Panel, which request stayed any further delisting action by the Staff pending the ultimate outcome of the hearing and the expiration of any extension that may be granted by the Panel. On June 6, 2024, the Company met with the Panel regarding the Companys potential delisting from The Nasdaq Stock Market as a result of its violation of the Bid Price Rule and non-compliance with the equity requirement in Listing Rule 5550(b)(1) (the Equity Rule) or any of the alternative requirements in Listing Rule 5550(b). On June 8, 2024, the Company received the Panels decision which granted the Company until October 14, 2024 to regain compliance with the Bid Price and Equity Rules. On October 17, 2024, Nasdaq notified the Company that the Panel had determined to delist the Companys Common Stock and that trading of the Companys Common Stock will be suspended at the open of trading on October 21, 2024. In connection with the Nasdaq delisting notice, Nasdaq will complete the delisting by filing a Form 25 Notification of Delisting with the U.S. Securities and Exchange Commission (the SEC) after applicable appeal periods have lapsed. The Companys Common Stock began trading under ORGS on the OTCQX with the open of the markets on October 21, 2024. As used in this report and unless otherwise indicated, the term Company refers to Orgenesis Inc. and its Subsidiaries. Unless otherwise specified, all amounts are expressed in United States Dollars. | b. | Liquidity | | Through December 31, 2024, the Company had an accumulated deficit of $224,787. For the year ended December 31, 2024, the Company incurred negative cash flows from operating activities of $17,076. The Companys activities have been funded primarily by offerings of its equity securities, loans, and convertible loans. There is no assurance that the Companys business will generate sustainable positive cash flows to fund its business operations. Further reductions in revenues or increases in operating costs, including cost to invest in and expand facilities, research and development, and commercial and clinical activities would require the Company to take mitigating actions such as seeking additional financing and/or postponing expenditures that are not based on firm commitments. In addition, to fund the Companys operations until it can generate sustainable positive cash flows, the Company will need to raise additional funds. During the year ended December 31, 2024, management identified impairment indicators and performed an impairment assessment for the Therapies reporting unit. Based on the quantitative analysis, management concluded that the reporting units fair value was below its carrying amount and therefore recorded a full impairment of goodwill of $1,211, property, plant and equipment of $8,752, and intangible assets of $8,375 (total impairment of approximately $18,338 million). This impairment conclusion was based on our potential delay of payments to suppliers because of lack of funds, the dissolution of our subsidiaries in Belgium and Israel, our lack of revenue and the low market value of our common stock. In addition, as part of the Companys annual assessment of its lease agreements, the Company recognized total lease charges of $1,541 that were recorded in rent expense. The Company expects its current and projected cash resources and commitments will not be sufficient to meet the Companys obligations for the next 12 months from the issuance of these financial statements,, raising a substantial doubt about the Companys ability to continue as a going concern. Management plans include raising additional capital to fund the Companys operations and to repay the Companys outstanding loans when they become due, as well as exploring additional avenues to increase revenue and reduce capital expenditures. The Companys ability to fund the completion of its ongoing and planned activities may be substantially dependent upon whether the Company can obtain sufficient funding at acceptable terms. If the Company is unable to raise sufficient additional capital or meet revenue targets, it may have to reduce or eliminate certain activities and reduce its headcount. | F-11 | | **NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES** **** The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). **** | a. | Use of Estimates in the Preparation of Financial Statements | | The preparation of the Companys consolidated financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity, the amount of revenues and expenses, determination of loss on deconsolidation, valuation of investments, goodwill impairment, and assessment of credit losses. Actual results could differ from those estimates. **** | b. | Business Combination | | The Company allocates the fair value of consideration transferred in a business combination to the assets acquired, liabilities assumed, and non-controlling interests in the acquired business based on their fair values at the acquisition date. All assets and liabilities are recognized in fair value. The purchase price allocation process requires management to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets. Direct transaction costs associated with the business combination are expensed as incurred. The excess of the fair value of the consideration transferred plus the fair value of any non-controlling interest in the acquiree over the fair value of the assets acquired, liabilities assumed in the acquired business is recorded as goodwill. The allocation of the consideration transferred in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. The cumulative impact of revisions during the measurement period is recognized in the reporting period in which the revisions are identified. The Company includes the results of operations of the business that it has acquired in its consolidated results prospectively from the date of acquisition. If the business combination is achieved in stages, the acquisition date carrying value of the acquirers previously held equity interest in the acquire is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized in profit or loss. | c. | Cash Equivalents | | The Company considers cash equivalents to be all short-term, highly liquid investments, which include money market instruments, that are not restricted as to withdrawal or use, and short-term bank deposits with original maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash. | d. | Cost of development services and research and development expenses | | Cost of development services and research and development expenses include costs directly attributable to the conduct of research and development activities, including the cost of salaries, stock-based compensation expenses, payroll taxes and other employees benefits, lab expenses, consumable equipment, courier fees, travel expenses, professional fees and consulting fees. All costs associated with research and developments are expensed as incurred. Participation from government departments and from research foundations for development of approved projects is recognized as a reduction of expense as the related costs are incurred. Research and development in-process acquired as part of an asset purchase, which has not reached technological feasibility and has no alternative future use, is expensed as incurred. | F-12 | | | e. | Principles of Consolidation | | The consolidated financial statements include the accounts of the Company and its Subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. | f. | Non-Marketable Equity Investments | | ** The Companys investments in certain non-marketable equity securities in which it has the ability to exercise significant influence, but it does not control through variable interests or voting interests. These are accounted for under the equity method of accounting and presented as Investment in associates, net, in the Companys consolidated balance sheets. Under the equity method, the Company recognizes its proportionate share of the comprehensive income or loss of the investee. The Companys share of income and losses from equity method investments is included in share in losses of associated company. The Company periodically reviews equity method investments for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investments may not be recoverable. The Company will record an impairment charge to the extent that the estimated fair value of an investment is less than its carrying value and the Company determines the impairment is other-than-temporary. Impairment charges, if applicable, are recorded in Share in net (losses) profits of associated companies. | g. | Fair value measurement | | The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable inputs that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. ** | h. | Functional Currency | | The currency of the primary economic environment in which the operations of the Company and part of its Subsidiaries are conducted is the U.S. dollar ($ or dollar). The functional currency of the Belgian Subsidiary is the Euro ( or Euro). Most of the Companys expenses are incurred in dollars, and the source of the Companys financing has been provided in dollars. Thus, the functional currency of the Company and its other subsidiaries is the dollar. Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in foreign currencies are translated into dollars using historical and current exchange rates for nonmonetary and monetary balances, respectively. For foreign transactions and other items reflected in the statements of operations, the following exchange rates are used: (1) for transactions exchange rates at transaction dates or average rates and (2) for other items (derived from nonmonetary balance sheet items such as depreciation) historical exchange rates. The resulting transaction gains or losses are recorded as financial income or expenses. The financial statements of the Belgian Subsidiary is included in the consolidated financial statements, translated into U.S. dollars. Assets and liabilities are translated at year-end exchange rates, while revenues and expenses are translated at yearly average exchange rates during the year. Differences resulting from translation of assets and liabilities are presented as other comprehensive income. | i. | Inventory | | The Companys inventory consists of raw material for use for the services provided. The Company periodically evaluates the quantities on hand. Cost of the raw materials is determined using the weighted average cost method. The inventory is recorded at the lower of cost or net realizable value. **** | F-13 | | **** | j. | Property, Plants and Equipment | | Property, plants and equipment are recorded at cost and depreciated by the straight-line method over the estimated useful lives of the related assets. Annual rates of depreciation are presented in the table below: SCHEDULE OF ANNUAL DEPRECIATION RATES, PROPERTY AND EQUIPMENT | | | Weighted Average Useful Life (Years) | | | Production facility | | 3 - 10 | | | Laboratory equipment | | 1 - 7 | | | Office equipment and computers | | 3 - 17 | | Impairment charges of property, Plants and Equipment during the year ended December 31, 2024 were $8,752, see note 1. | k. | Intangible assets | | Intangible assets and their useful lives are as follows: SCHEDULE OF INTANGIBLE ASSETS AND THEIR USEFUL LIVE | | | Useful Life (Years) | | Amortization Recorded at Comprehensive Loss Line Item | | | Know-How | | 10 | | Amortization of intangible assets | | | Technology | | 15 | | Amortization of intangible assets | | Intangible assets are recorded at acquisition less accumulated amortization and impairment. Definite lived intangible assets are amortized over their estimated useful life using the straight-line method, which is determined by identifying the period over which the cash flows from the asset are expected to be generated. The Company capitalizes IPR&D projects acquired as part of a business combination. On successful completion of each project, IPR&D assets are reclassified to developed technology and amortized over their estimated useful lives. Impairment charges of intangible assets during the year ended December 31, 2024 were $8,375, see note 1. | l. | Goodwill | | Goodwill represents the excess of consideration transferred over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. Goodwill is allocated to reporting units expected to benefit from the business combination. Goodwill is not amortized but rather tested for impairment at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Before the Octomera deconsolidation (see note 3), the Company reallocated its goodwill into two identified operating units: Octomera and Therapies. Subsequent to the Octomera deconsolidation, the goodwill allocated to Octomera was derecognized. During the year ended December 31, 2024, the Company recorded goodwill impairment charges of $1,211 (see note 1). As a result of the derecognition and impairment recorded during 2024, the Company had no goodwill recorded as of December 31, 2024. Goodwill impairment is recognized when the quantitative assessment results in the carrying value exceeding the fair value, in which case an impairment charge is recorded to the extent the carrying value exceeds the fair value. | m. | Impairment of Long-lived Assets | | The Company reviews its property, plants and equipment, intangible assets subject to amortization and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset class may not be recoverable. Indicators of potential impairment include: an adverse change in legal factors or in the business climate that could affect the value of the asset; an adverse change in the extent or manner in which the asset is used or is expected to be used, or in its physical condition; and current or forecasted operating or cash flow losses that demonstrate continuing losses associated with the use of the asset. If indicators of impairment are present, the asset is tested for recoverability by comparing the carrying value of the asset to the related estimated undiscounted future cash flows expected to be derived from the asset. If the expected cash flows are less than the carrying value of the asset, then the asset is considered to be impaired and its carrying value is written down to fair value, based on the related estimated discounted cash flows. For indefinite life intangible assets, the Company performs an impairment test annually in the fourth quarter and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company determines the fair value of the asset based on discounted cash flows and records an impairment loss if its book value exceeds fair value. | F-14 | | Impairment charges of other investment during the year ended December 31, 2023 were $699. | n. | Income Taxes | | 1) With respect to deferred taxes, income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized in the foreseeable future. 2) The Company follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates that it is more likely than not that the position will be sustained on examination. If this threshold is met, the second step is to measure the tax position as the largest amount that is greater than 50% likely of being realized upon ultimate settlement. 3) Taxes that would apply in the event of disposal of investment in Subsidiaries and associated companies have not been taken into account in computing the deferred income taxes, as it is the Companys intention to hold these investments and not realize them. | o. | Stock-based Compensation | | The Company recognizes stock-based compensation for the estimated fair value of share-based awards. The Company measures compensation expense for share-based awards based on estimated fair values on the date of grant using the Black-Scholes option-pricing model. This option pricing model requires estimates as to the options expected term and the price volatility of the underlying stock. The Company amortizes the value of share-based awards to expense over the vesting period on a straight-line basis. | p. | Loss per Share of Common Stock | | Basic net loss (income) per share is computed by dividing the net loss (income) for the period by the weighted average number of shares of common stock outstanding for each period. Diluted net income per share is based upon the weighted average number of common shares and of common shares equivalents outstanding when dilutive. Common share equivalents include: (i) outstanding stock options, RSUs and warrants which are included under the treasury share method when dilutive, and (ii) common shares to be issued under the assumed conversion of the Companys outstanding convertible loans and debt, which are included under the if-converted method when dilutive (See Note 14). | q. | Concentration of Credit Risk | | Financial instruments that potentially subject the Company to concentration of credit risk consist of principally cash and cash equivalents, bank deposits and certain receivables. The Company held these instruments with highly rated financial institutions and the Company has not experienced any significant credit losses in these accounts and does not believe the Company is exposed to any significant credit risk on these instruments apart of accounts receivable. The Company performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for doubtful accounts. | F-15 | | The Company maintains the allowance for estimated losses resulting from the inability of the Companys customers to make required payments. The Company considers historical collection experience for each of its customers and when revenue and accounts receivable are recorded. The Company also recognizes estimated expected credit losses over the life of the accounts receivables. The estimate of expected credit losses considers not only historical information, but also current and future economic conditions and events. | r. | Treasury shares | | The Company repurchases its common stock from time to time on the open market and holds such shares as treasury stock. The Company presents the cost to repurchase treasury stock as a reduction of shareholders equity. The Company did not reissue nor cancel treasury shares during the year ended December 31, 2024 and December 31, 2023. | s. | Other Comprehensive Loss | | Other comprehensive loss represents adjustments of foreign currency translation. ** | t. | Revenue from Contracts with Customers | | ** The Companys agreements are primarily service and processing contracts, the performance obligations of which range in duration from a few months to one year. The Company applies the revenue guidance to contracts when control of the services is transferred to the customer for an amount, referred to as the transaction price, which reflects the consideration to which the Company is expected to be entitled in exchange for those goods or services and when it is probable that the Company will collect substantially all of the consideration to which it is entitled in exchange for the goods and services it transfers to the customer. The Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between the time of transfer of the promised goods or services to the customer and the time the customer pays for these goods or services to be generally one year or less. The Companys credit terms to customers are in average between thirty and one hundred and fifty days. **Nature of Revenue Streams** **** The Company has four main revenue streams, which are License fees, POCare development services, cell process development services, including hospital supplies, and POCare cell processing. License fees Revenue recognized under license fees are recognized upon the confirmation of licensee of milestones completed and certainty of payment of the license fee. *Significant Judgement and Estimates* ** Significant judgment is required to identifying the distinct performance obligations and estimating the standalone selling price of each distinct performance obligation and identifying which performance obligations create assets with alternative use to the Company, which results in revenue recognized upon completion, and which performance obligations are transferred to the customer over time, and the estimate of credit losses. **** Cell Process Development Services Revenue recognized under contracts for cell process development services may, in some contracts, represent multiple performance obligations (where promises to the customers are distinct) in circumstances in which the work packages and milestones are not interrelated or the customer is able to complete the services performed independently or by using competitors of the Company. In other contracts when the above circumstances are not met, the promises are not considered distinct, and the contract represents one performance obligation. All performance obligations are satisfied over time, as there is no alternative use to the services it performs, since, in nature, those services are unique to the customer, which retain the ownership of the intellectual property created through the process. | F-16 | | For arrangements that include multiple performance obligations, the transaction price is allocated to the identified performance obligations based on their relative standalone selling prices. For these contracts, the standalone selling prices are based on the Companys normal pricing practices when sold separately with consideration of market conditions and other factors, including customer demographics and geographic location. The Company measures the revenue to be recognized over time on a contract-by-contract basis, determining the use of either a cost-based input method or output method, depending on whichever best depicts the transfer of control over the life of the performance obligation. Included in cell process development services is hospital supplies revenue, which is derived principally from the performance of services to hospitals or other medical providers. Revenue is earned and recognized when product and services are received by the customer. **** *Change Orders* Changes in the scope of work are common and can result in a change in transaction price, equipment used and payment terms. Change orders are evaluated on a contract-by-contract basis to determine if they should be accounted for as a new contract or as part of the existing contract. Generally, services from change orders are not distinct from the original performance obligation. As a result, the effect that the contract modification has on the contract revenue, and measure of progress, is recognized as an adjustment to revenue when they occur. ** | u. | Leases | | The Company determines if an arrangement is a lease at inception. Lease classification is governed by five criteria in ASC 842-10-25-2. If any of these five criteria is met, The Company classifies the lease as a finance lease; otherwise, the Company classifies the lease as an operating lease. When determining lease classification, the Companys approach in assessing two of the mentioned criteria is: (i) generally 75% or more of the remaining economic life of the underlying asset is a major part of the remaining economic life of that underlying asset; and (ii) generally 90% or more of the fair value of the underlying asset comprises substantially all of the fair value of the underlying asset. Operating leases are included in operating lease right-of-use (ROU) assets and operating lease liabilities in the consolidated balance sheet. Finance leases are included in property, plants and equipment, net and finance lease liabilities in the consolidated balance sheet. ROU assets represent Orgenesis right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the lease payments. The standard also provides practical expedients for an entitys ongoing accounting. The Company elected the short-term lease recognition exemption for all leases with a term shorter than 12 months. This means that for those leases, the Company does not recognize ROU assets or lease liabilities but recognizes lease expenses over the lease term on a straight-line basis. Lease terms will include options to extend or terminate the lease when it is reasonably certain that Orgenesis will exercise or not exercise the option to renew or terminate the lease. | F-17 | | | v. | Segment reporting | | The Companys business includes two reporting segments: Octomera and Therapies. See note 5. | w. | Recently issued accounting pronouncements, not yet adopted | | On August 23, 2023, the FASB issued guidance requiring a joint venture to initially measure all contributions received upon its formation at fair value. This accounting will largely be consistent with ASC 805, Business Combinations, although there are some specific exceptions. Before the ASU, there was no authoritative guidance in US GAAP that addressed how a joint venture should recognize contributions received. As a result, there has been diversity in practice, with some joint ventures accounting for contributions received at carry over basis and others at fair value. This new guidance is intended to reduce diversity in practice and provide users of the joint ventures financial statements with more decision-useful information. It may also reduce the amount of basis differences that an investor in a joint venture needs to track. The new guidance should be applied prospectively and is effective for all newly-formed joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. The adoption of this guidance will not have a material impact on the Companys consolidated financial statements. In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the U.S. and in foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures. In November 2024, the FASB issued ASU No. 2024-03 Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40). The ASU improves the disclosures about a public business entitys expenses and provides more detailed information about the types of expenses in commonly presented expense captions. The amendments require that at each interim and annual reporting period an entity will, inter alia, disclose amounts of purchases of inventory, employee compensation, depreciation and amortization included in each relevant expense caption (such as cost of sales, SG&A and research and development). The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Companys disclosures. In July 2025, the FASB issued ASU 2025-05 Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU introduces a practical expedient for all entities when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. Under the practical expedient, when developing reasonable and supportable forecast as part of estimating expected credit losses, an entity may assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The ASU is effective for annual reporting period beginning after December 15, 2025 and interim reporting within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods. The Company is evaluating the impact of ASU 2025-05 on its consolidated financial statements if it elects to apply the practical expedient. In September 2025, the FASB issued ASU 2025-07 Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The ASU excludes from the derivative accounting certain non-exchange-traded contracts with contracts with underlying that are based on operations or activities specific to one of the parties to the contract. Further, the ASU clarifies that an entity should apply the guidance in ASC 606 to a contract with share-based noncash consideration. The guidance in other Topics (such as ASC 815 or ASC 312) does not apply to such consideration unless and until the entitys right to receive or retain the consideration is unconditional. The ASU is effective for annual periods beginning after December 15, 2026 and interim periods within those annual periods. Early adoption is permitted. The amendment can be applied either prospectively to new contracts entered into on or after the date of adoption or on a modified retrospective basis through cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption. The Company is in the process of evaluating the effects of the ASU on its contracts. | F-18 | | **NOTE 3 RECONSOLIDATION OF OCTOMERA LLC** On June 30, 2023, the Company and MM entered into Amendment No. 1 to the Second Amended and Restated Limited Liability Company Agreement (the LLC Agreement Amendment) to amend Octomeras board composition. Pursuant to the LLC Agreement Amendment, the board of managers of Octomera (the Octomera Board) will be comprised of five managers, two of which will be appointed by the Company, one of which will be an industry expert appointed by MM, and two of which will be appointed by MM. The change was effective immediately. As a result of the amendment to the composition of the Octomera Board pursuant to the LLC Agreement Amendment described above, the Company deconsolidated Octomera from its consolidated financial statements as of June 30, 2023 (date of deconsolidation) and recorded its equity interest in Octomera as an equity method investment Prior to the date of deconsolidation the MM investment in Octomera was presented as a redeemable non-controlling interest on the Companys balance sheet, and outside of permanent equity. On January 29, 2024, the Company and MM entered into a UPA pursuant to which the Company acquired all of the preferred units of Octomera owned by MM and the Company and MM agreed to the following: | 3. | Consideration: | | | | Royalty Payments: If Octomera and its subsidiaries generate Net Revenue during the three-year period 2025-2027, then the Company will pay 5% of Net Revenues to MM pursuant to the MM UPA. | | | | Milestone Payments: If the Company sells Octomera within ten years from the date of the Closing at a price that is more than $40 million excluding consideration for certain Excluded Assets as per the UPA, the Company shall pay MM 5% of the net proceeds. | | | 4. | MMs designated members of the Board of Managers of Octomera resigned and the Company amended the Second Amended and Restated Limited Liability Company Agreement of Octomera (the Octomera LLC Agreement) to be a single member agreement reflecting the transactions consummated under the UPA, such that MM no longer (i) is a member of Octomera or a party to the Octomera LLC Agreement, or (ii) has a right to appoint members of the board of managers of Octomera. | | | 5. | 10 secured promissory notes between Orgenesis Maryland LLC and MM, reflecting an aggregate outstanding principal amount of $2,600 (the Notes), were amended to, among other things, extend the maturity thereof to January 29, 2034 and to terminate the security interest granted by Orgenesis Maryland LLC in favor of MM that secured the obligations under the Notes. | | *Fair Value of Consideration Transferred* ** Accounting guidance provides that the allocation of the purchase price may be adjusted for up to one year from the date of the acquisition to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. The primary area of the purchase price allocation that is not yet finalized is related to intangible assets, property, plant and equipment, and certain other assets and tax matters and the related impact on goodwill. In evaluating the fair value of the Octomera Equity Investment under the income approach, the Company used a discounted cash flow model of the business, adjusted to the Companys share in the investment. Key assumptions used to determine the estimated fair value included: (a) internal cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs to produce, operating profit margins and estimated capital needs; (b) an estimated terminal value using a terminal year long-term future growth determined based on the growth prospects of the reporting units; and (c) a discount rate which reflects the weighted average cost of capital adjusted for the relevant risk associated with the Companys reporting unit operations and the uncertainty inherent in the Companys internally developed forecasts. The allocation of the purchase price to the net assets acquired and liabilities assumed resulted in the recognition of other intangible assets, net, which comprised of technology. The useful life of the technology for amortization purposes was determined by considering the period of expected cash flows generated by the assets used to measure the fair value of the intangible assets, adjusted as appropriate for the entity-specific factors including legal, regulatory, contractual, competitive, economic, or other factors that may limit the useful life of intangible assets. | F-19 | | The following table summarizes the allocation of purchase price to the fair values of the assets acquired and liabilities assumed as of the Transaction date: SCHEDULE OF PURCHASE PRICE TO THE FAIR VALUES OF THE ASSETS ACQUIRED AND LIABILITIES ASSUMED | | | (in thousands) | | | | Total Contingent consideration to MM for royalty and milestone payments | | $ | 4,643 | | | | | | | | | | | Total assets acquired: | | | | | | | Cash and cash equivalents | | $ | 139 | | | | Property, plants and equipment, net | | | 17,852 | | | | Other Assets | | | 3,478 | | | | Total assets | | $ | 21,469 | | | | | | | | | | | Total liabilities assumed: | | | | | | | Total current liabilities | | $ | (12,518 | ) | | | Total long-term liabilities | | | (5,628 | ) | | | Total liabilities | | $ | (18,146 | ) | | | | | | | | | | Know how Technology | | | 1,728 | | | | | | | | | | | Total Net Assets | | $ | 5,051 | | | | Fair-Value of Non-controlling interests | | | (408 | ) | | | Total liability to MM | | $ | 4,643 | | | The allocation of the purchase price to the net assets acquired and liabilities assumed resulted in the recognition of an intangible asset know-how of $1,728 and a liability to MM in the amount of $4,643. The know-how has a useful life of 10 years. The useful life of the intangible asset for amortization purposes was determined considering the period of expected cash flows generated by the assets used to measure the fair value of the intangible asset adjusted as appropriate for the entity-specific factors, including legal, regulatory, contractual, competitive, economic or other factors that may limit the useful life of intangible assets. Key inputs for the fair values valuation are summarized below. SCHEDULE OF KEY INPUTS FOR THE FAIR VALUES VALUATION | Key Valuation Inputs | | Jan 29, 2024 | | | | Discount rate | | | 40 | % | | | Risk-free interest rate | | | 4.4 | % | | | Average 5 years revenue growth | | | 50 | % | | | Measurement input | | | 50 | % | | The Company incurred transaction costs of approximately $50 and $0 during the year ended December 31, 2024 respectively, which were included in general and administrative expenses in the condensed consolidated statements of operations. | F-20 | | The revenues and net loss of Octomera from January 1, 2024 until the reconsolidation date were $23 and $1,244 respectively. ** *Fair value assumptions used in accounting for contingent consideration* On January 29, 2024, in connection with the PPA study of Octomera LLC, the Company recognized a contingent consideration to pay MM based on two components: 1. Royalties based on revenues in 2025, 2026 and 2027, and; 2. An earnout amount, which is dependent on a future triggering event being either an IPO or exit. The estimated fair value of the contingent consideration is based on managements assessment of whether, and at what level, the financial metrics will be achieved, and the present value factors associated with the timing of the payments. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 fair value measurement and used the Monte Carlo pricing model to calculate the fair value, which was $4,643 as of January 29, 2024. As of December 31, 2024, the fair value was $0, primarily as the Company does not expect significant revenue (see note 1). Changes in the fair value of contingent consideration are recorded in operating expenses. The total revaluation income for the period ended December 31, 2024 was $4,643. Key inputs for the simulation are summarized below. SCHEDULE OF KEY INPUTS | Key Valuation Inputs | | Jan 29, 2024 | | | | Standard Deviation | | | 13.5 | % | | | Risk-free interest rate | | | 4.4 | % | | | Possible trigger event examination | | | Year 10 | | | | Average 5 years revenue growth | | | 50 | % | | | Trigger events | | | 30 | % | | | EV/EBIT Multiple | | | 11.1 | | | | * | Based on a Monte Carlo simulation analysis of 30,000 iterations | | **NOTE 4 EQUITY INVESTMENTS AND LOANS TO ASSOCIATES** As of December 31, 2024, and December 31, 2023, the balances of our equity-method investments were $- and $8, respectively, and are as follows: | a. | Octomera LLC | | ** Since the date of deconsolidation, until the date of reconsolidation, the Company recorded its equity interest in Octomera as an equity method investment. As of January 31, 2024, the balance of our equity-method investment related to Octomera was approximately $0. The Company therefore did not provide for additional losses once the investment was reduced to zero since the Company did not guarantee obligations of Octomera and is not otherwise committed to provide further financial support to Octomera. The following table presents summarized results of operations for the period that the investment in Octomera was recorded under the equity method: SUMMARY OF RESULTS OF OPERATIONS | | | One-Months Ended | | | Six-Months Ended | | | | | | January 31, 2024 | | | December 31, 2023 | | | | Total revenue | | $ | 23 | | | $ | 53 | | | | Gross loss | | $ | 771 | | | $ | 5,010 | | | | Net loss | | $ | 8,648 | | | $ | 20,145 | | | | F-21 | | | b. | Butterfly Biosciences Sarl | | There were no significant transactions in Butterfly Biosciences Sarl (BB), a Swiss corporation in which the Company holds a 49% participating interest incorporated pursuant to a joint venture agreement (KC JVA) with Kidney Cure Ltd (KC) in both of the years ending December 31, 2023 and 2024. In 2023, the Company and KC decided to terminate the KC JVA and liquidate BB. As of December 31, 2024, BB was not yet liquidated. | c. | RevaCel | | During 2021, the Company and Revatis S.A (Revatis), pursuant to the Revatis JVA incorporated the Revatis JV Entity known as RevaCel Srl (RevaCel) in Belgium. RevaCel will develop products in the field of muscle-derived mesenchymal stem/progenitor cells. The Company holds a 51% participating interest in RevaCel and Revatis holds the remaining 49% and is entitled to appoint 2 of the 5 members of RevaCels board. Due to the Companys significant influence over the JVE, the Company applies the equity method of accounting and is treated as an associated company. The table below sets forth a summary of the changes in the investments and loans for the years ended December 31, 2024 and December 31, 2023 SCHEDULE OF CHANGES IN INVESTMENTS AND LOAN | | | 2024 | | | 2023 | | | | | | December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | | | | | | | | | | Opening balance | | $ | 8 | | | $ | 135 | | | | Investments during the period | | | - | | | | 660 | | | | Repayment of loan | | | - | | | | (55 | ) | | | Share in net loss of associated companies | | | (8 | ) | | | (734 | ) | | | Exchange rate differences | | | - | | | | 2 | | | | Total | | $ | - | | | $ | 8 | | | **NOTE 5 SEGMENT INFORMATION** **** The Companys Chief Executive Officer (CEO), was identified as the chief operating decision maker (CODM). The CODM reviews financial information prepared on a consolidated basis, together with disaggregated information about revenues and contributed profit for the Companys two reportable segments, Octomera and Therapies, in order to make decisions about resources to be allocated to the segments and to assess their performance. The Octomera segment reports the results of Octomera LLC and its subsidiaries, which specialize in providing processing services within the Orgenesis group and to third party customers. The Therapies segment includes all other group activities. Segment revenues, expenses and contributed profit exclude intersegment transactions.one The CDMO does not make operating and investing decisions based on assets and, accordingly, does not review asset information by segment. Therefore, a measure of segment assets is not disclosed. | F-22 | | Segment data for the year ended December 31, 2024 is as follows: **SCHEDULE OF SEGMENT REPORTING** | | | Octomera | | | Therapies | | | Eliminations | | | Consolidated | | | | | | (in thousands) | | | | Revenues | | $ | 533 | | | $ | 525 | | | $ | (23 | ) | | $ | 1,035 | | | | Cost of revenues* | | | (1,351 | ) | | | (633 | ) | | | 710 | | | | (1,274 | ) | | | Gross profit (loss) | | | (818 | ) | | | (108 | ) | | | 687 | | | | (239 | ) | | | Cost of development services and research and development expenses* | | | (4,530 | ) | | | (5,169 | ) | | | 697 | | | | (9,002 | ) | | | Operating expenses* | | | (3,557 | ) | | | (10,716 | ) | | | 4,178 | | | | (10,095 | ) | | | Impairment of investment** | | | (6,509 | ) | | | (11,829 | ) | | | - | | | | (18,338 | ) | | | Share in net income of associated companies | | | - | | | | (8 | ) | | | - | | | | (8 | ) | | | Profit from deconsolidation | | | - | | | | - | | | | 4,480 | | | | 4,480 | | | | Other income, net | | | 1,022 | | | | (416 | ) | | | - | | | | 606 | | | | Depreciation and amortization | | | (1,558 | ) | | | (771 | ) | | | 243 | | | | (2,086 | ) | | | Loss from extinguishment in connection with convertible loan | | | - | | | | (5,422 | ) | | | - | | | | (5,422 | ) | | | Credit loss on convertible loan receivable | | | - | | | | - | | | | - | | | | - | | | | Financial Expenses, net | | | (4,682 | ) | | | 49 | | | | 125 | | | | (4,508 | ) | | | Finance fees related to convertible loans to equity | | | - | | | | (4,304 | ) | | | - | | | | (4,304 | ) | | | Income (loss) before income taxes | | $ | (20,632 | ) | | $ | (38,694 | ) | | $ | 10,410 | | | $ | (48,916 | ) | | **** | * | Excluding Depreciation, amortization and impairment expenses | | | ** | Relates to impairment expenses on certain property, plant and equipment. | | **** Segment data for the year ended December 31, 2023 is as follows: | | | Octomera | | | Therapies | | | Eliminations | | | Consolidated | | | | | | (in thousands) | | | | Revenues | | $ | 68 | | | $ | 515 | | | $ | (53 | ) | | $ | 530 | | | | Cost of revenues* | | | (9,505 | ) | | | (690 | ) | | | 4,421 | | | | (5,774 | ) | | | Gross profit (loss) | | | (9,437 | ) | | | (175 | ) | | | 4,368 | | | | (5,244 | ) | | | Cost of development services and research and development expenses* | | | (9,211 | ) | | | (5,811 | ) | | | 4,711 | | | | (10,311 | ) | | | Operating expenses* | | | (37,878 | ) | | | (7,102 | ) | | | 9,892 | | | | (35,088 | ) | | | Impairment of investment | | | - | | | | (699 | ) | | | - | | | | (699 | ) | | | Share in net income of associated companies | | | - | | | | (74 | ) | | | (660 | ) | | | (734 | ) | | | Profit from deconsolidation | | | - | | | | - | | | | (5,343 | ) | | | (5,343 | ) | | | Other income, net | | | 1 | | | | 3 | | | | - | | | | 4 | | | | Depreciation and amortization | | | (1,765 | ) | | | (782 | ) | | | 987 | | | | (1,560 | ) | | | Credit loss on convertible loan receivable | | | - | | | | (2,688 | ) | | | - | | | | (2,688 | ) | | | Loss from extinguishment in connection with convertible loan | | | - | | | | (283 | ) | | | - | | | | (283 | ) | | | Financial Expenses, net | | | (573 | ) | | | (2,004 | ) | | | 78 | | | | (2,499 | ) | | | Income (loss) before income taxes | | $ | (58,863 | ) | | $ | (19,615 | ) | | $ | 14,033 | | | $ | (64,445 | ) | | **** | * | Excluding Depreciation, amortization and impairment expenses | | **** **NOTE 6 EQUITY** *a. Financings* On February 23, 2023, the Company entered into a securities purchase agreement with certain institutional and accredited investors relating to the issuance and sale of 194,736 shares of Common Stock and warrants to purchase up to 97,368 shares of Common Stock (the Warrants) at a purchase price of $19.0 per share of Common Stock and accompanying Warrants in a registered direct offering (the February 2023 Offering). The February 2023 Offering closed on February 27, 2023. | F-23 | | The Warrants had an exercise price of $10.90 per share, were exercisable immediately and were to expire five years following the date of issuance. The Warrants had an alternate cashless exercise option (beginning on or after the earlier of (a) the thirty-day anniversary of the date of the Purchase Agreement and (b) the date on which the aggregate composite trading volume of Common Stock following the public announcement of the pricing terms exceeds 13,600,000 shares), to receive an aggregate number of shares equal to the product of (x) the aggregate number of shares of Common Stock that would be issuable upon a cash exercise and (y) 1.0. The aggregate gross proceeds to the Company from the Offering were $3,700, before deducting placement agent cash fees equal to 7.0% of the gross proceeds received and other expenses payable by the Company. All of the Warrants were exercised using the alternate cashless exercise option described above. On August 31, 2023, the Company entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which the Company agreed to issue and sell, in a private placement (the August 2023 Offering), 200,000 shares of the Companys Common Stock at a purchase price of $5.00 per share. The Company received proceeds of $1,000. The August 2023 Offering closed on August 31, 2023. On November 8, 2023, the Company entered into a Securities Purchase Agreement with an institutional investor, pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the investor (the November 2023 Offering), (i) 141,025 shares of Common Stock, and (ii) warrants exercisable for 141,025 shares of Common Stock. The combined offering price for each share and accompanying warrant was $7.80. The warrants will be exercisable immediately following the date of issuance and may be exercised for a period of five years from the initial exercisability date at an exercise price of $7.80 per share. The exercise prices and numbers of shares of Common Stock issuable upon exercise of the warrants will be subject to adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the Companys Common Stock. The Company received net proceeds of $942 after deducting $158 related transaction fees. The November 2023 Offering closed on November 9, 2023. On March 8, 2024, the institutional investor exercised 2,500 warrants and on August 14, 2024 a further 3,526 warrants, at the $7.80 exercise price. On March 3, 2024, the Company entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell, in a private placement, 227,272 shares of Common Stock at a purchase price of $10.3 per share, Warrants to purchase up to 227,272 shares of Common Stock at an exercise price of $15.0 per share, and further Warrants to purchase up to 227,272 shares of Common Stock at an exercise price of $20.0 per share, all such Warrants exercisable immediately and expiring five years from their date of issuance. The Company received gross proceeds of approximately $2.3 million before deducting related offering expenses. The Offering closed on March 5, 2024. On May 10, 2024, the Company entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell, in a private placement, 15,000 shares of the Companys Common Stock at a purchase price of $10.3 per share, Warrants to purchase up to 15,000 shares of Common Stock at an exercise price of $15.0 per share, and further Warrants to purchase up to 15,000 shares of Common Stock at an exercise price of $20.0 per share, all such Warrants exercisable immediately and expiring five years from their date of issuance. The Company received gross proceeds of approximately $154 before deducting related offering expenses. The Offering closed on May 10, 2024. | F-24 | | *b. Warrants* A summary of the Companys warrants granted to investors and as finders fees as of December 31, 2024, and December 31, 2023 and changes for the periods then ended is presented below: SCHEDULE OF WARRANTS ACTIVITY | | | December 31, | | | | | | 2024 | | | 2023 | | | | | | Number of Warrants | | | Weighted Average Exercise Price $ | | | Number of Warrants | | | Weighted Average Exercise Price $ | | | | Warrants outstanding at the beginning of the period | | | 584,216 | | | | 30.64 | | | | 538,158 | | | | 44.10 | | | | Changes during the period: | | | | | | | | | | | | | | | | | | | Issued | | | 7,015,288 | | | | 2.52 | | | | 289,124 | | | | 14.60 | | | | Exercised | | | (6,026 | ) | | | 7.80 | | | | (97,368 | ) | | | 19.00 | | | | Expired | | | (2,286 | ) | | | 70.00 | | | | (145,698 | ) | | | 56.30 | | | | Warrants outstanding and exercisable at end of the period | | | 7,591,192 | | | | 3.58 | | | | 584,216 | | | | 30.64 | | | **NOTE 7 PROPERTY, PLANTS AND EQUIPMENT** The following table represents the components of property, plants and equipment: SCHEDULE OF COMPONENTS OF PROPERTY, PLANT AND EQUIPMENT | | | 2024 | | | 2023 | | | | | | December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Cost: | | | | | | | | | | | Production facility | | $ | 341 | | | $ | 55 | | | | Office furniture and computers | | | 287 | | | | 242 | | | | Lab equipment | | | 10,010 | | | | 1,061 | | | | Advance payment | | | 2,526 | | | | 692 | | | | Subtotal | | | 13,164 | | | | 2,050 | | | | Less accumulated depreciation | | | (12,586 | ) | | | (575 | ) | | | Total | | $ | 578 | | | $ | 1,475 | | | Depreciation expense for the years ended December 31, 2024 and December 31, 2023 were $1,360 thousand and $839 thousand, respectively. Impairment expense for the years ended December 31, 2024 and December 31, 2023 were $8,752 thousand and $0 thousand, respectively (see note 1). Property, plants and equipment, net by geographical location were as follows: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT BY GEOGRAPHICAL AXIS | | | 2024 | | | 2023 | | | | | | December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | | | | | | | | | | Belgium | | $ | - | | | $ | 29 | | | | Greece | | | 147 | | | | - | | | | Netherlands | | | 181 | | | | 289 | | | | Israel | | | - | | | | 56 | | | | U.S. | | | 250 | | | | 1,101 | | | | Total | | $ | 578 | | | $ | 1,475 | | | | Property, plants and equipment, net | | $ | 578 | | | $ | 1,475 | | | **** | F-25 | | **** **NOTE 8 INTANGIBLE ASSETS AND GOODWILL** Changes in the carrying amount of the Companys goodwill for the years ended December 31, 2024 and 2023 are as follows: SCHEDULE OF GOODWILL | | | (in thousands) | | | | Goodwill as of December 31, 2022 | | $ | 8,187 | | | | Deconsolidation of Octomera | | | (6,815 | ) | | | Translation differences | | | (161 | ) | | | Goodwill as of December 31, 2023 | | $ | 1,211 | | | | Impairment of Goodwill | | | (1,211 | ) | | | Goodwill as of December 31, 2024 | | $ | - | | | ** *Goodwill impairment assessment for the year ended December 31, 2024* As of December 31, 2024, the Company performed an impairment analysis for its reporting units. Based on the Companys assessment, it was concluded that the fair value of the Therapies reporting unit was below its carrying amounts and, accordingly, the Company recorded a full impairment of goodwill of $1,211 thousand (see note 1). In evaluating the fair value of reporting units under the income approach, the Company used a discounted cash flow model. Key assumptions used to determine the estimated fair value included: (a) internal cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs to produce, operating profit margins and estimated capital needs; (b) an estimated terminal value using a terminal year long-term future growth determined based on the growth prospects of the reporting units; and (c) a discount rate which reflects the weighted average cost of capital adjusted for the relevant risk associated with the Companys reporting unit operations and the uncertainty inherent in the Companys internally developed forecasts. Actual results may differ from those assumed in the Companys valuation method. It is reasonably possible that the Companys assumptions described above could change in future periods. If any of these were to vary materially from the Companys plans, it may record impairment of goodwill allocated to any of these reporting units in the future. ** *Other Intangible Assets* Other intangible assets consisted of the following: SCHEDULE OF OTHER INTANGIBLE ASSETS | | | 2024 | | | 2023 | | | | | | December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Gross Carrying Amount: | | | | | | | | | | | Know How | | $ | 1,728 | | | $ | - | | | | Technology | | | 9,340 | | | | 9,340 | | | | Subtotal | | | 11,068 | | | | 9,340 | | | | Less Accumulated amortization | | | * (11,068 | ) | | | (1,965 | ) | | | Net carrying amount of other intangible assets | | $ | - | | | $ | 7,375 | | | | * | Including impairment expense for the years ended December 31, 2024 and December 31, 2023 were $8,375 thousand and $0 thousand, respectively (see note 1). | | Intangible assets amortization expenses were approximately $728 thousand and $721 thousand for the years ended December 31, 2024 and December 31, 2023, respectively. | * | Including impairment expense for the years ended December 31, 2024 and December 31, 2023 were $8,375 thousand and $0 thousand, respectively (see note 1). | | **NOTE 9 LOANS** The table below summarizes the Companys outstanding long-term loans as of December 31, 2024 and December 31, 2023, respectively: SCHEDULE OF LONG TERM LOANS | Principal Amount | | | Interest Rate | | | Year of Maturity | | | December 31, 2024 | | | December 31, 2023 | | | | (in thousands) | | | % | | | | | | (in thousands) | | | | $ | 2,600 | | | | 10 | | | | 2034 | | | $ | 2,895 | | | $ | - | | | **** See Note 3. **** | F-26 | | The table below summarizes the Companys outstanding short-term loans as of December 31, 2024 and December 31, 2023, respectively: SCHEDULE OF SHORT TERM LOANS | Currency | | Interest Rate | | | December 31, 2024 | | | December 31, 2023 | | | | | | % | | | (in thousands) | | | | USD | | | 8 | | | $ | 291 | | | $ | 258 | | | | USD | | | 10 | | | | 5,877 | | | | 61 | | | | USD | | | (*)8 | | | | - | | | | (**)331 | | | | Euro | | | 8 | | | | 15 | | | | - | | | | | | | | | | $ | 6,183 | | | $ | 650 | | | **** | (*) | Weighted average interest. | | | (**) | The terms of the loan were amended on January 1, 2024. Under the new terms, the loan became convertible into shares of Common Stock and the lender agreed to extend the maturity date to December 31, 2024. In consideration for such extension, the Company issued to the lender warrants to purchase 36,000 shares of the Companys Common Stock at a price of $8.5 per share and granted lender the right to convert any part of the outstanding balance of the loan into Common Stock of the Company at the conversion rate of $8.5 per share. Based on its analysis, the Company concluded that this change in terms should be accounted for as a modification. This loan was converted as per the debt exchange agreement. See note 10. | | The table below summarizes the Companys warrants granted to loan holders for the period ended December 31, 2024. SCHEDULE OF WARRANTS GRANTED | Date of issuance | | Number of warrants | | | Weighted Average Exercise price | | | Expiration date | | | April 07, 2024 | | | 15,625 | | | $ | 1.03 | | | December 31, 2025 | | | April 05, 2024 | | | 24,272 | | | $ | 1.03 | | | December 31, 2025 | | | August 21, 2024 | | | 21,875 | | | $ | 1.03 | | | August 20, 2029 | | | August 21, 2024 | | | 97,088 | | | $ | 1.03 | | | August 20, 2029 | | | September 06, 2024 | | | 24,272 | | | $ | 1.03 | | | September 05, 2025 | | | September 10, 2024 | | | 1,942 | | | $ | 10.3 | | | September 09, 2025 | | | September 09, 2024 | | | 24,272 | | | $ | 1.03 | | | September 08, 2029 | | | September 17, 2024 | | | 24,272 | | | $ | 1.03 | | | September 15, 2029 | | | September 30, 2024 | | | 14,563 | | | $ | 1.03 | | | September 29, 2025 | | | October 03, 2024 | | | 200,000 | | | $ | 1.03 | | | November 29, 2025 | | | October 22, 2024 | | | 485,437 | | | $ | 1.03 | | | October 21, 2025 | | | October 30, 2024 | | | 38,834 | | | $ | 1.03 | | | October 28, 2025 | | | November 04, 2024 | | | 242,718 | | | $ | 1.03 | | | November 03, 2029 | | | November 14, 2024 | | | 194,175 | | | $ | 1.03 | | | November 13, 2025 | | | November 15, 2024 | | | 242,718 | | | $ | 1.03 | | | November 14, 2029 | | | November 29, 2024 | | | 48,544 | | | $ | 1.03 | | | December 28, 2029 | | | December 13, 2024 | | | 48,544 | | | $ | 1.03 | | | December 12, 2029 | | | December 19, 2024 | | | 48,544 | | | $ | 1.03 | | | December 18, 2029 | | | November 30, 2024 | | | 2,020,238 | | | $ | 1.03 | | | March 31, 2026 | | | December 31, 2024 | | | 250,432 | | | $ | 1.03 | | | March 31, 2026 | | | December 31, 2024 | | | 249,701 | | | $ | 1.03 | | | March 31, 2026 | | | December 31, 2024 | | | 149,302 | | | $ | 1.03 | | | March 31, 2026 | | | December 31, 2024 | | | 1,012,037 | | | $ | 1.03 | | | December 30, 2029 | | | December 31, 2024 | | | 48,970 | | | $ | 1.03 | | | December 30, 2029 | | | December 31, 2024 | | | 48,784 | | | $ | 1.03 | | | December 30, 2029 | | | December 31, 2024 | | | 48,704 | | | $ | 1.03 | | | December 30, 2029 | | | December 31, 2024 | | | 246,909 | | | $ | 1.03 | | | December 30, 2029 | | | December 31, 2024 | | | 250,234 | | | $ | 1.03 | | | December 30, 2029 | | | Total | | | 6,123,006 | | | $ | 1.03 | | | | | | F-27 | | In October 2024, the Company entered into agreements with its lenders to extend the maturity dates of certain loans to dates ranging from January through April 2025. In consideration for these extensions, the Company issued the lenders warrants to purchase an aggregate of 4,913,661 shares of the Companys Common Stock at an exercise price of $1.03 per share. Based on managements evaluation of the modification terms, the Company concluded that the amendments should be accounted for as a debt extinguishment and recorded an extinguishment loss of $5,280. All warrants were fully vested upon issuance. The warrants remain exercisable only so long as the related service continues to be provided to the Company, in accordance with the applicable warrant agreements. **NOTE 10 CONVERTIBLE LOANS** | a. | Long-Term Convertible Loans | | The tables below summarize the Companys outstanding convertible loans as of December 31, 2024 and December 31, 2023 respectively: SCHEDULE OF LONG TERM CONVERTIBLE NOTES | Principal | | | Issuance Date | | | Current Interest Rate | | | Current Maturity | | | Current Conversion Price of loan into equity | | | | Amount | | | (Year) | | | % | | | (Year) | | | $ | | | | Convertible Loans Outstanding as of December 31, 2024 | | | | | | | $ | 100 | | | | 2019 | | | | 8 | % | | | 2024 | | | | 10.3 | | | | | 100 | | | | 2020 | | | | 8 | % | | | 2024 | | | | 10.3 | | | | | 1,150 | | | | 2022 | | | | 6 | % | | | *2023 | | | | 45.0 | | | | | 5,000 | | | | 2023 | | | | 8 | % | | | 2026 | | | | 24.6 | | | | $ | 6,350 | | | | | | | | | | | | | | | | | | | | * | Following the balance sheet date, the maturities of the loans were extended to dates in 2025. | | | ** | Was not yet paid by December 31, 2024. | | **Convertible Loans Outstanding as of December 31, 2023** | $ | 750 | | | | 2018 | | | | 10 | % | | | 2026 | | | | 2.50 | | | | | 1,500 | | | | 2019 | | | | 10 | % | | | 2026 | | | | 2.50 | | | | | 100 | | | | 2019 | | | | 8 | % | | | 2024 | | | | 2.50 | | | | | 5,000 | | | | 2019 | | | | 10 | % | | | 2026 | | | | 2.50 | | | | | 100 | | | | 2020 | | | | 8 | % | | | 2024 | | | | 7.00 | | | | | 5,000 | | | | 2022 | | | | 10 | % | | | 2026 | | | | 2.50 | | | | | 1,150 | | | | 2022 | | | | 6 | % | | | **2023 | | | | 4.50 | | | | | 5,000 | | | | 2023 | | | | 8 | % | | | 2026 | | | | 2.46 | | | | | 735 | | | | 2023 | | | | 8 | % | | | 2024 | | | | -* | | | | $ | 19,335 | | | | | | | | | | | | | | | | | | | | * | The conversion price is not fixed and is contingent on the terms under the loan agreement. | | | ** | Was not yet paid by December 31, 2023. | | **Convertible Loans repaid during the year ended December 31, 2023** | Principal Amount | | | Issuance Year | | | Interest Rate | | | Maturity Period | | | Exercise Price | | | | | 3,000 | | | | 2022 | | | | 10 | % | | | 1 | | | $ | 2.5 | | | *Debt Exchange Agreements* ** On May 21, 2024, the Company entered into debt exchange agreements with three convertible debt holders pursuant to which a total of $16,007 of outstanding principal and accrued interest was exchanged for the right to receive an aggregate of 1,577,695 shares of the Companys Common Stock. During the year ended December 31, 2024, the Company issued an aggregate of 1,577,694. The Company reduced the exchange price from $25.0 to $10.3 per share for a total of $14,784 of outstanding principal. As a result, the Company recorded an induced conversion expense equal to the fair value of the incremental consideration, amounting to $4,304. *Additional notes related to changes in convertible loans terms that occurred in 2024* In January 2024, the Company and lender agreed to extend the maturity date of the loan amount to December 31, 2026. Inconsideration for such extension, the Company issued to the lender warrants to purchase 84,000 shares of Common Stock at an exercise price of $8.5 per share. Based on its analysis, the Company concluded that this change in terms should be accounted for as an extinguishment loss of $141. The loan amount was included in the debt exchange agreement. | F-28 | | Koligo Convertible Loan On March 27, 2023, the Companys subsidiary Koligo Therapeutics Inc. (Borrower), entered into a convertible loan agreement (the Convertible Loan Agreement) with Yehuda Nir (the Lender, and together with the Borrower, the Parties), pursuant to which the Lender agreed to loan the Borrower up to $5,000 (the Loan Amount). Interest is calculated at 8% per annum (based on a 365-day year) and is payable, along with the principal, on or before January 1, 2024 (the Maturity Date). The Maturity Date may be extended by the Lender in the Lenders sole and absolute discretion and any such extension(s) shall be in writing signed by the Parties. The Loan Amount may be prepaid by the Borrower in whole or in part at any time with the prior written approval of the Lender. If prior to December 31, 2023, the Borrower issues equity securities (Equity Securities) in a transaction or series of related transactions resulting in aggregate gross proceeds to the Borrower of at least $5,000 (excluding conversion of the Loan Amount) (a Qualified Financing), then the outstanding principal amount of the Loan Amount, and any and all accrued but unpaid interest thereon (collectively, the Outstanding Amount), will automatically convert into such Equity Securities issued pursuant to the Qualified Financing at a price per share equal to fifty percent (50%) of the price per share paid for each share of the Equity Securities purchased for cash by the investors in the Qualified Financing (the Mandatory Conversion). The per share price for the Mandatory Conversion shall be calculated on a fully diluted basis (including equity underlying all outstanding options, warrants, and other convertible securities, but excluding the Equity Securities issuable upon the Mandatory Conversion). The Parties agreed that the Lender shall have the option to assign $1,500 of the Loan Amount due to the Lender under that certain convertible loan agreement between the Lender and the Company dated April 21, 2022, as amended, (collectively the Original Loan), to the Borrower (the Loan Assignment). The terms of the Loan Assignment will be the same as under the Original Loan, including a maturity date of January 31, 2026 and an annual interest rate of 10%. The Loan Assignment will be subject to the Mandatory Conversion as described above. As of the date of the issue of these financial statements, said assignment has not occurred. Under the terms of the Koligo Convertible Loan Agreement, the Borrower agreed to use the Loan Amount to fund working capital and ongoing operations and for no other purposes unless the Lender agrees in writing. As of December 31, 2024, Koligo received $773 under the Koligo Convertible Loan Agreement, which was converted into shares in May 2024. In January 2024, the Company and Lender agreed to extend the maturity date of the loan amount to December 31, 2026. The Company awarded warrants to purchase 840,000 of the Companys Common Stock at a price of $0.85 per share, and granted Lender the right to convert any part of the Outstanding amount into Common Stock of the Company at the conversion rate of $0.85 per share. ** **NOTE 11 LEASES** The Company leases research and development facilities, equipment and offices under finance and operating leases. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of lease payments over the term. Many of the leases include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. The Companys leases do not provide a readily determinable implicit rate. Therefore, the Company estimated the incremental borrowing rate to discount the lease payments based on information available at lease commencement. *Manufacturing facilities* The Company leases space for its manufacturing facilities under operating lease agreements. The leasing contracts are for a period of 3-10 years. *Offices* The Company leases space for offices under operating leases. The leasing contracts are valid for terms of 4 years. | F-29 | | *Lease Position* ** The table below presents the lease-related assets and liabilities recorded on the balance sheet: SCHEDULE OF LEASE-RELATED ASSETS AND LIABILITIES | | | 2024 | | | 2023 | | | | | | December 31, | | | | | | 2024 | | | 2023 | | | | Assets | | | | | | | | | | | Operating Leases | | | | | | | | | | | Operating lease right-of-use assets | | $ | - | | | $ | 351 | | | | | | | | | | | | | | | Finance Leases | | | | | | | | | | | Property, plants and equipment, gross | | | 136 | | | | 89 | | | | Accumulated depreciation | | | (136 | ) | | | (65 | ) | | | Property and equipment, net | | $ | - | | | $ | 24 | | | | | | | | | | | | | | | Liabilities | | | | | | | | | | | Current liabilities | | | | | | | | | | | Current maturities of operating leases | | $ | 234 | | | $ | 216 | | | | Current maturities of long-term finance leases | | $ | 25 | | | $ | 18 | | | | | | | | | | | | | | | Long-term liabilities | | | | | | | | | | | Non-current operating leases | | $ | 1,308 | | | $ | 96 | | | | Long-term finance leases | | $ | 1 | | | $ | 4 | | | | | | | | | | | | | | | Weighted Average Remaining Lease Term | | | | | | | | | | | Operating leases | | | 6.5 years | | | | 1.1 years | | | | Finance leases | | | 0.6 years | | | | 1.2 years | | | | Weighted Average Discount Rate | | | | | | | | | | | Operating leases | | | 9.2 | % | | | 7.5 | % | | | Finance leases | | | 10.4 | % | | | 2.0 | % | | *Lease Costs* The table below presents certain information related to lease costs and finance and operating leases: SCHEDULE OF LEASE COSTS | | | 2024 | | | 2023 | | | | | | Years ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in Thousands) | | | | Operating lease cost: | | $ | 542 | | | $ | 561 | | | | | | | | | | | | | | | Finance lease cost: | | | | | | | | | | | Amortization of leased assets | | | 60 | | | | 46 | | | | Interest on lease liabilities | | | 4 | | | | 5 | | | | Total finance lease cost | | $ | 64 | | | $ | 51 | | | The table below presents supplemental cash flow information related to lease: SCHEDULE OF SUPPLEMENTAL CASHFLOW INFORMATION | | | Years ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in Thousands) | | | | Cash paid for amounts included in the measurement of leases liabilities: | | | | | | | | | | | Operating leases | | $ | 541 | | | $ | 573 | | | | Finance leases | | $ | 64 | | | $ | 44 | | | | | | | | | | | | | | | Right-of-use assets obtained in exchange for lease obligations: | | | | | | | | | | | Operating leases | | $ | 405 | | | $ | 752 | | | | F-30 | | *Undiscounted Cash Flows* The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet. SCHEDULE OF FINANCE LEASE LIABILITIES AND OPERATING LEASE LIABILITIES | | | Operating Leases | | | Finance Leases | | | | Year ended December 31, | | | | | | | | | | | 2024 | | $ | 346 | | | $ | 26 | | | | 2025 | | | 342 | | | | - | | | | 2026 | | | 318 | | | | - | | | | 2027 | | | 284 | | | | - | | | | 2028 | | | 225 | | | | - | | | | Thereafter | | | 518 | | | | - | | | | Total minimum lease payments | | | 2,033 | | | | 26 | | | | Less: amount of lease payments representing interest | | | (491 | ) | | | - | | | | Present value of future minimum lease payments | | | 1,542 | | | | 26 | | | | Less: Current leases obligations | | | (234 | ) | | | (25 | ) | | | Long-term leases obligations | | $ | 1,308 | | | $ | 1 | | | ** Operating lease right-of-use assets by geographical location were as follows: SCHEDULE OF RIGHT-OF-USE ASSETS BY GEOGRAPHICAL LOCATION | | | December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | | | | | | | | | | Greece | | $ | - | | | $ | - | | | | Israel | | | - | | | | 292 | | | | U.S. | | | - | | | | 59 | | | | Total | | $ | - | | | $ | 351 | | | **NOTE 12 COMMITMENTS AND LICENSE AGREEMENTS** See Note 13 for additional commitments related to Collaborations. | a. | Tel Hashomer Medical Research, Infrastructure and Services Ltd (THM) | | ** On February 2, 2012, the Companys Israeli Subsidiary entered into a licensing agreement with THM. According to the agreement, the Israeli Subsidiary was granted a worldwide, royalty bearing, exclusive license to trans-differentiation of cells to insulin producing cells, including the population of insulin producing cells, methods of making this population, and methods of using this population of cells for cell therapy or diabetes treatment developed by Dr. Sarah Ferber of THM. As consideration for the license, the Israeli Subsidiary will pay the following to THM: | 1) | A royalty of 3.5% of net sales; | | | 2) | 16% of all sublicensing fees received; | | | 3) | An annual license fee of $15, which commenced on January 1, 2012 and shall be paid once every year thereafter. The annual fee is non-refundable, but it shall be paid each year against the royalty noted above, to the extent that such are payable, during that year; and | | | F-31 | | | 4) | Milestone payments as follows: | | | a. | $50 on the date of initiation of Phase I clinical trials in human subjects; | | | b. | $50 on the date of initiation of Phase II clinical trials in human subjects; | | | c. | $150 on the date of initiation of Phase III clinical trials in human subjects; | | | d. | $750 on the date of initiation of issuance of an approval for marketing of the first product by the FDA; and | | | e. | $2 million when worldwide net sales of Products (as defined in the agreement) have reached the amount of $150 million for the first time, (the Sales Milestone). | | As of December 31, 2024, the Israeli Subsidiary had not reached any of these milestones. In the event of closing of an acquisition of all of the issued and outstanding share capital of the Israeli Subsidiary and/or consolidation of the Israeli Subsidiary or the Company into or with another corporation (Exit), the THM shall be entitled to choose whether to receive from the Israeli Subsidiary a one-time payment based, as applicable, on the value of either 4,636,510 shares of common stock of the Company at the time of the Exit or the value of 1,000 shares of common stock of the Israeli Subsidiary at the time of the Exit. ** | b. | Israel-U.S. Binational Industrial Research and Development Foundation (BIRD) | | On September 9, 2015, the Israeli Subsidiary entered into a pharma Cooperation and Project Funding Agreement (CPFA) with BIRD and Pall Corporation, a U.S. company. BIRD awarded a conditional grant of up to $400 each (according to terms defined in the agreement), for a joint research and development project for the use of Autologous Insulin Producing (AIP) Cells for the Treatment of Diabetes (the Project). Company received a total of $299 under the grant. The project was completed in 2019. The grant is to be repaid at the rate of 5% of gross sales generated from the Project. To date no sales have been generated. | f. | Sponsored Research and Exclusive License Agreement with Columbia University | | Effective April 2, 2019, the Company and The Trustees of Columbia University in the City of New York, a New York corporation, (Columbia) entered into a Sponsored Research Agreement (the SRA) whereby the Company will provide financial support for studying the utility of serological tumor marker for tumor dynamics monitoring. Effective April 2, 2019, the Company and Columbia entered into an Exclusive License Agreement (the Columbia License Agreement) whereby Columbia granted to the Company an exclusive license to discover, develop, manufacture, sell, and otherwise distribute certain product in the field of cancer therapy. In consideration of the licenses granted under the Columbia License Agreement, the Company shall pay to Columbia (i) a royalty of 5% of net sales of any product sold which incorporates a licensed Columbia patent and (ii) 2.5% of net sales of other products. In addition, the Company shall pay a flat $100 fee to Columbia upon the achievement of each regulatory milestone. To date no royalty incurring sales were made. | g. | Regents of the University of California | | In December 2019, the Company and the Regents of the University of California (University) entered into a joint research agreement in the field of therapies and processing technologies according to an agreed upon work plan. According to the agreement, the Company will pay the University royalties of up to 5% (or up to 20% of sub-licensing sales) in the event of sales that includes certain types of University owned IP. To date, no royalty incurring sales were made. | h. | Caerus Therapeutics Inc | | ** In October 2019, the Company and Caerus Therapeutics (Caerus), a Virginia company, concluded a license agreement whereby Caerus granted the Company an exclusive license to all Caerus IP relating to Advance Chemeric Antigen Vectors for Targeting Tumors for the development and/or commercialization of certain licensed products. In consideration for the License granted to the Company under this Agreement, the Company shall pay Caerus annual maintenance fees and royalties of sales of up to 5% and up to 18% of sub-license fees. To date, no royalty incurring sales were made. | F-32 | | | i. | Tissue Genesis LLC | | ** Included in the Koligo acquisition of 2020 were the assets of Tissue Genesis LLC. The Company is committed to paying the previous owners of Tissue Genesis LLC or their assignees up to $500 upon the achievement of certain performance milestones and earn-out payments on future sales provided that in no event will the aggregate of the earn-out payments exceed $4 million. To date, no performance milestones have been reached. | k. | Savicell | | ** During 2021, the Company and Savicell Ltd (Savicell) entered into a collaboration agreement (the Savicell Agreement) to collaborate in the evaluation, continued development, validation, and use of Savicells platform designed for the early detection and diagnosis of diseases and conditions and for quality control and monitoring purposes, in conjunction with the Companys systems. Pursuant to the Savicell Agreement, the Company will provide to Savicell funding for the performance of certain tasks agreed upon by the parties in a work plan. In consideration for such funding, Savicell will supply the Company with products developed under the Savicell Agreement at preferential rates and grant to the Company a worldwide exclusive licence to sell such products in the Companys point-of-care network of hospitals, clinics and institutions for quality control and monitoring of manufacturing and processing of autologous immune cells manipulated by cell and gene therapies. The Company will be required to pay a 10% royalty for all gross sales of such products developed under the Savicell Agreement. To date, no royalty incurring sales were made. | l. | Stromatis Pharma | | ** During 2021, the Company and Stromatis Pharma Inc. (Stromatis) entered into a Collaboration and Sublicense Agreement (the Stromatis Agreement) to collaborate in refining methods for GMP manufacturing of CAR-T/CAR-NK CT109; and the development and validation of the Stromatis technology as it relates to the CAR-T/CAR-NK CT109 antibody up to and inclusive of filing of Investigational New Drug Application relating to Stromatis CAR-T/CAR-NK CT109 antibody (Licensed Product), in accordance with the agreed project plan (Project). The Company will fund the Project by providing Stromatis an amount of $1.2 million such funding to be provided based on approved projects. Stromatis will grant the Company certain perpetual, irrevocable royalty free and fully paid-up exclusive rights to manufacture, process and supply the Licensed Product (Manufacturing Rights) and perpetual, irrevocable, royalty bearing exclusive rights to market and sell and offer for sale the Licensed Product within the Companys point of care network (Marketing Rights). To date, no royalty incurring sales were made. Stromatis has the option to convert the exclusive Manufacturing Rights to non-exclusive rights subject to repayment by Stromatis of an amount equal to funding provided by the Company and an additional payment by Stromatis of an ongoing revenue share of five percent (5%) of revenues of any kind received by Stromatis or its affiliates from the sale or transfer of Licensed Products or license of rights under the licensed technology in relation to the Licensed Products. The Company shall pay Stromatis in consideration for the Marketing Rights and royalties equal to 12% of net revenues of Licensed Products received by the Company. The Company advanced to Stromatis an initial sum of $500 under the Stromatis Agreement, which was recorded as Cost of revenues, development services and research and development expenses. | m. | Helmholtz Zentrum Mnchen Deutsches Forschungszentrum fr Gesundheit und Umwelt (GmbH)) (HMGU)- | | ** During 2021, HMGU granted an exclusive licence under HGMU owned patent rights and non-exclusive license under HGMU know how and licensed materials, to the Company in the field of certain human stem cells. In addition, payments will be due by the Company upon certain milestones. The agreement also includes payment of royalties of between 3% and 4% on net sales of licensed product (with a minimum annual royalty of Euro 200,000, creditable against royalties on net sales incurred during such contract year) and 5% in service revenues and payment of between 10% and 18% on sublicense revenues. | F-33 | | | n. | European Innovation Council and SMEs Executive Agency (EISMEA) | | ** During the year ended December 31, 2022, the Dutch Subsidiary, together with a consortium of other entities (Consortium) and EISMEA entered into a grant funding agreement for the funding of the development of an artificial intelligence guided microfluidic device that standardizes the GMP production of autologous induced pluripotent stem cells (iSPSCs) at greatly reduced costs (iPSC project). The total grant amount is Euro 3.999 million of which the Dutch subsidiary is eligible to receive up to Euro 1.179 million. The project started on September 1, 2022 and is expected to end on August 31, 2026. The Dutch subsidiary is the consortium leader for the iPSC project. During the year ended 31 December 2022, the subsidiary received initial working capital in the amount of Euro 1.920 million of which Euro 1.338 million was received on behalf of the other members of the Consortium and recorded in restricted cash, and Euro 582 for the use of the subsidiary as per the grant agreement. As at December 31, 2024, the restricted cash related to the iPSC project was $180. During the year ended December 31, 2024, the Company recognized grant income of $356 which was offset against research and development expenses. **NOTE 13 COLLABORATIONS** **** | a. | Adva Biotechnology Ltd. | | ** On January 28, 2018, the Company and Adva Biotechnology Ltd. (Adva), entered into a Master Services Agreement (MSA), pursuant to which the Company and/or its affiliates provided certain services relating to development of products for Adva. In consideration for and subject to the fulfillment by the Company of certain funding commitments which were completed in 2019, Adva agreed that upon completion of the development of the products, the Company and/or its affiliates and Adva shall enter into a supply agreement pursuant to which for a period of eight (8) years following execution of such supply agreement, the Company and/or its affiliates (as applicable) is entitled (on a non-exclusive basis) to purchase the products from Adva at a specified discount pricing from their then standard pricing. The Company and/or its affiliates were also granted a non-exclusive worldwide right to distribute such products, directly or indirectly. The MSA shall remain in effect for 10 years unless earlier terminated in accordance with its terms. | b. | Revised and restated joint venture agreements | | ** In January 2023, the Company entered into updated joint venture (JV) agreements (JVAs) with Theracell Advanced Biotechnology SA, Broaden Bioscience and Technology Corp, Image Securities FZC, Cure Therapeutics, and Med Centre for Gene and Cell Therapy FZ-LLC and assigned certain rights and obligations under its JVAs to Texas Advanced Therapies LLC, a Delaware Limited Liability company (Texas AT) not related to the Company. Texas AT was to receive the Companys option to require the incorporation of the JV entity, the Companys share in the JV entity, if and when incorporated, an option to invest additional funding in the JV entity, and board and veto rights on certain critical decisions in the JV entity. The Company retained a call option to acquire the JV partners share in the JV entity, as well as the right to receive a royalty and a right to conclude the Manufacturing and Service Agreement with the JV entity. Pursuant to the JVAs, the Company is not entitled to the additional share of fifteen percent of the JV entitys GAAP profit after tax granted under the previous version of the JVAs, and the Company has no further obligation to provide additional funding to the JV entities. In May 2024, the Company was advised that Texas AT was dissolved effective December 27, 2023, which terminated the JVAs between the parties. As of December 31, 2024, no JV entities had been incorporated pursuant to the JVAs. | c. | Mircod | | ** On July 25, 2023, the Company and Mircod LLC (Mircod) entered into a settlement and release agreement pursuant to which they agreed to terminate the joint venture and loan agreement between themselves. Also, pursuant to the agreement, Mircod agreed to deliver all the related deliverables to the Company, and the Company agreed to pay Mircod consideration in the amount of $1,000, of which half will be paid in cash, and one half in Orgenesis shares, upon receipt of the deliverables. As of December 31, 2024, Mircod invoiced the Company $300 in respect of deliverables that it claims were delivered and this amount is included in accounts payable. | F-34 | | | d. | Sub-license agreement | | ** On July 25, 2023, the Company, a Sub-licensee, and the equity interest owner of that Sub-licensee (Sub-licensee Owner), entered into agreements whereby: | 1) | the Company sub-licensed certain of its therapies to Sub-licensee in return for royalties on future sales and payments upon the successful completion of certain milestones; | | | 2) | subject to the fulfilment certain conditions and milestones, none of which have been fulfilled to date, the Sub-licensee Owner granted the Company a call option to purchase his interests in Sub-licensee at a valuation to be determined by a third-party valuation firm of not less than $8,000 unless agreed otherwise by the parties to the option; and | | | 3) | subject to the fulfilment of certain conditions and milestones, none of which have been fulfilled to date, the Sub-licensee Owner was granted a put option to cause the Company to purchase his equity interest in Sub-licensee at a valuation to be determined by a third-party valuation firm of not less than $8,000 unless agreed otherwise by the parties to the option. | | The Company has received $215 from Sub-licensee as an advance on account of future license fees. No milestones have been completed to date. The Company and sub-licensee terminated this agreement in 2025 | e. | Deep Med Joint Venture agreement (JVA) | | ** In November 2021, Deep Med IO Ltd (Deep Med) and Company entered into a JVA. The Parties agreed to collaborate in the development and commercialization of an AI-powered system to be used in the manufacturing and/or quality control of CGTs. The Company has the right to finance its activities under the Deep Med JVA by procuring services, advancing funds under a convertible loan agreement, or by an equity investment. The Deep Med convertible loan bears interest at the annual rate of 6% and is repayable after 5 years. The Company has the right to convert its holdings under the loan into shares of Deep Med, or into shares of the Deep Med JV entity once established. During twelve months ended December 31, 2022, the Company transferred $1.9 million to Deep Med as part of its commitment under the Deep Med JVA. The Company recorded the amounts paid to Deep Med under the Deep Med JVA as research and development expenses under ASC 730. During the twelve months ended December 31, 2023, the Company and Deep Med suspended all work under the work plan pending further discussions. | c. | Germfree Asset Purchase and Strategic Collaboration Agreement. | | On April 5, 2024, the Company entered into an Asset Purchase and Strategic Collaboration Agreement (the Purchase Agreement) with Griffin Fund 3 BIDCO, Inc., (Germfree), for the sale by the Company of five Orgenesis Mobile Processing Units and Labs (OMPULs) to Germfree, which will be incorporated into Germfrees lease fleet and leased back to the Company or to third-party lessees designated by the Company. Pursuant to the Purchase Agreement, and subject to the terms and conditions set forth therein, in consideration for the purchase of the OMPULs, the Orgenesis Quality Management Systems Framework (OQMSF) and related intellectual property rights, Germfree is to pay an aggregate purchase price of $8,340 subject to adjustment through a verification mechanism set forth in the Purchase Agreement. Pursuant to the Purchase Agreement, Germfree paid the Company $6,720 as of December 31, 2024. Pursuant to the Purchase Agreement, Germfree will exclusively manufacture and distribute OMPULs and supply the Company with OMPULs for use worldwide for ten years (the Term), under a license to all OMPUL-related intellectual property owned by the Company. The Company will also license to Germfree the necessary technical package required to manufacture the OMPULs and will provide engineering services at a standard market rate with a statement of work to be agreed upon in advance. Germfree will provide service support for OMPULs including the provision of installation, commissioning, qualification, ongoing servicing, remote monitoring, and maintenance services for the facility, OMPULs, and related equipment. All intellectual property licensed to Germfree will remain the sole and exclusive property of the Company and all intellectual property or any improvements relating to the OMPULs or the OQMSF developed by Germfree will be the sole and exclusive property of Germfree. | F-35 | | On November 5, 2024, Germfree notified the Company of its intention not to lease any OMPULS back to the Company. Germfree confirmed that it has satisfied its obligations to the Company under the Purchase Agreement, and the Company therefore does not expect to receive any further payments thereunder. The Company therefore recognized the profit from the sale of the OMPUL as Other Income. **NOTE 14 LOSS PER SHARE** **** The following table sets forth the calculation of basic and diluted loss per share for the periods indicated: SCHEDULE OF BASIC AND DILUTED LOSS PER SHARE | | | 2024 | | | 2023 | | | | | | Years ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands, except per share data) | | | | Basic and diluted: | | | | | | | | | | | Net loss attributable to Orgenesis Inc | | $ | 48,165 | | | $ | 55,361 | | | | Weighted average number of common shares outstanding | | | 4,210,839 | | | | 2,900,787 | | | | Net loss per share | | $ | 11.44 | | | $ | 19.08 | | | For the year ended December 31, 2024, and December 31, 2023, all outstanding convertible notes, options, RSUs and warrants have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive. Diluted loss per share excludes 2,156,406 shares underlying outstanding options, RSUs and warrants and 247,895 shares upon conversion of convertible loans for the year ended December 31, 2024, because the effect of their inclusion in the computation would be anti-dilutive. Diluted loss per share excludes 790,441 shares underlying outstanding options, RSUs and warrants and 715,775 shares upon conversion of convertible loans for the year ended December 31, 2023, because the effect of their inclusion in the computation would be antidilutive. **NOTE 15 STOCK-BASED COMPENSATION** **** | a. | Global Share Incentive Plan | | ** The Companys stockholders have approved the 2017 Equity Incentive Plan (the 2017 Plan) under which, the Company had reserved a pool of 1,200,000 shares of the Companys common stock, which may be issued at the discretion of the Companys board of directors from time to time. Under this Plan, each option is exercisable into one share of common stock of the Company. The options may be exercised after vesting and in accordance with the vesting schedule that will be determined by the Companys board of directors for each grant. The maximum contractual life term of the options is 10 years. As of December 31, 2024, total options available for grants under this plan are 841,019. On May 23, 2012, the Companys board of directors adopted the Global Share Incentive Plan 2012 (the 2012 Plan) under which, the Company had reserved a pool of 100,000 shares of the Companys common stock, which may be issued at the discretion of the Companys board of directors from time to time. Under this plan, each option is exercisable into one share of common stock of the Company. The options may be exercised after vesting and in accordance with the vesting schedule that will be determined by the Companys board of directors for each grant. The maximum contractual life term of the options is 10 years. As of December 31, 2024, total options available for grants under this plan are 76,982. | F-36 | | | b. | Options Granted to Employees and Directors | | ** Below is a table summarizing all of the options grants to employees and Directors made during the years ended December 31, 2024, and December 31, 2023: SCHEDULE OF EMPLOYEE STOCK OWNERSHIP PLAN DISCLOSURES | | | Year Ended | | No. of options granted | | | Exercise price | | | Vesting period | | Fair value at grant (in thousands) | | | Expiration period | | | Employees | | December 31, 2024 | | | 61,100 | | | $ | 5-$6.4 | | | 67% vested quarterly over a period of two years, with the remaining amount vested quarterly over four years. | | $ | 260 | | | 10 years | | | | | | | | | | | | | | | | | | | | | | | | Directors | | December 31, 2024 | | | 76,522 | | | $ | 0.98-$10.3 | | | 4% annually over a period of three years, 84% vests immediately, and 12% vests on the one-year anniversary. | | $ | 412 | | | 10 years | | | | | | | | | | | | | | | | | | | | | | | | Employees | | December 31, 2023 | | | 31,800 | | | $ | 4.5-$13.6 | | | 51% Quarterly over a period of two years and the rest quarterly over a period of four years | | | 148 | | | 10 years | | | | | | | | | | | | | | | | | | | | | | | | Directors | | December 31,2023 | | | 8,465 | | | $ | 4.5 | | | On the one-year anniversary | | $ | 26 | | | 10 years | | **** **** The fair value of each stock option grant is estimated at the date of grant using a Black Scholes option pricing model. The volatility is based on the historical volatility of the Company, by statistical analysis of the weekly share price for past periods based on expected term. The expected option term is calculated using the simplified method*,*as the Company concludes that its historical share option exercise experience does not provide a reasonable basis to estimate its expected option term. The fair value of each option grant is based on the following assumptions: SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | Value of one common share | | $ | 0.98-$10.3 | | | $ | 4.5-$13.6 | | | | Dividend yield | | | 0 | % | | | 0 | % | | | Expected stock price volatility | | | 79%-110 | % | | | 70%-80 | % | | | Risk free interest rate | | | 3.86%-4.49 | % | | | 3.9%-4.28 | % | | | Expected term (years) | | | 2.5-6.06 | | | | 5.5-6.06 | | | A summary of the Companys stock options granted to employees and directors as of December 31, 2024 and December 31, 2023 is presented below: SCHEDULE OF STOCK OPTIONS ACTIVITY | | | Years Ended December 31 | | | | | | 2024 | | | 2023 | | | | | | Number of Options | | | Weighted Average Exercise Price $ | | | Number of Options | | | Weighted Average Exercise Price $ | | | | Options outstanding at the beginning of the period | | | 302,727 | | | | 38.9 | | | | 303,527 | | | | 41.7 | | | | Changes during the period: | | | | | | | | | | | | | | | | | | | Granted | | | 137,622 | | | | 6.75 | | | | 40,265 | | | | 6.4 | | | | Exercised* | | | (25,519 | ) | | | 0.50 | | | | - | | | | - | | | | Expired | | | (29,059 | ) | | | 36.72 | | | | (17,884 | ) | | | 49.2 | | | | Forfeited | | | (14,732 | ) | | | 9.58 | | | | (23,181 | ) | | | 10.4 | | | | Options outstanding at end of the period | | | 371,039 | | | | 30.97 | | | | 302,727 | | | | 38.9 | | | | Options exercisable at end of the period | | | 321,651 | | | | 35.00 | | | | 274,038 | | | | 41.8 | | | | * | During the year ended December 31, 2024, the Company received $13 thousand from the exercise of employee options for the purchase of 25,519 shares of the Companys Common Stock at a weighted average price of $0.50. | | | F-37 | | The following table presents summary information concerning the options granted and exercisable to employees and directors outstanding as of December 31, 2024 (in thousands, except per share data): SCHEDULE OF STOCK OPTIONS EXERCISABLE | Exercise Price $ | | | Number of Outstanding Options | | | Weighted Average Remaining Contractual Life | | | Aggregate Intrinsic Value $ | | | Number of Exercisable Options | | | Aggregate Exercisable Options Value $ | | | | | | | | | | | | | (in thousands) | | | | | | (in thousands) | | | | | 0.98 | | | | 7,585 | | | | 9.95 | | | | 7 | | | | - | | | | - | | | | | 4.5 | | | | 9,161 | | | | 8.91 | | | | - | | | | 6,161 | | | | 28 | | | | | 5 | | | | 17,500 | | | | 8.01 | | | | - | | | | 8,750 | | | | 44 | | | | | 6.3 | | | | 21,250 | | | | 9.52 | | | | - | | | | 3,750 | | | | 24 | | | | | 6.4 | | | | 50,684 | | | | 9.42 | | | | - | | | | 37,522 | | | | 240 | | | | | 6.5 | | | | 625 | | | | 9.52 | | | | - | | | | - | | | | - | | | | | 10.3 | | | | 32,281 | | | | 9.56 | | | | - | | | | 32,281 | | | | 332 | | | | | 13.6 | | | | 2,434 | | | | 7.11 | | | | - | | | | 1,922 | | | | 26 | | | | | 18.6 | | | | 8,465 | | | | 3.22 | | | | - | | | | 8,465 | | | | 157 | | | | | 20 | | | | 27,653 | | | | 6.16 | | | | - | | | | 29,400 | | | | 588 | | | | | 20.1 | | | | 4,700 | | | | 4.25 | | | | - | | | | 4,700 | | | | 94 | | | | | 28.9 | | | | 8,465 | | | | 2.85 | | | | - | | | | 8,465 | | | | 245 | | | | | 29.6 | | | | 2,800 | | | | 6.08 | | | | - | | | | 2,800 | | | | 83 | | | | | 29.9 | | | | 34,945 | | | | 4.07 | | | | - | | | | 34,945 | | | | 1,045 | | | | | 31.4 | | | | 250 | | | | 4.90 | | | | - | | | | 250 | | | | 8 | | | | | 45 | | | | 2,000 | | | | 4.37 | | | | - | | | | 2,000 | | | | 90 | | | | | 46 | | | | 13,080 | | | | 4.01 | | | | - | | | | 13,080 | | | | 602 | | | | | 47 | | | | 625 | | | | 0.49 | | | | - | | | | 625 | | | | 29 | | | | | 48 | | | | 46,662 | | | | 1.45 | | | | - | | | | 46,662 | | | | 2,240 | | | | | 50.2 | | | | 2,100 | | | | 3.41 | | | | - | | | | 2,100 | | | | 105 | | | | | 50.7 | | | | 4,950 | | | | 2.45 | | | | - | | | | 4,950 | | | | 251 | | | | | 51 | | | | 2,087 | | | | 5.17 | | | | - | | | | 2,087 | | | | 106 | | | | | 51.2 | | | | 7,550 | | | | 5.11 | | | | - | | | | 7,550 | | | | 387 | | | | | 59.9 | | | | 27,155 | | | | 3.02 | | | | - | | | | 27,154 | | | | 1,626 | | | | | 68.4 | | | | 1,200 | | | | 5.38 | | | | - | | | | 1,200 | | | | 82 | | | | | 72 | | | | 8,333 | | | | 2.43 | | | | - | | | | 8,333 | | | | 600 | | | | | 83.6 | | | | 24,999 | | | | 3.49 | | | | - | | | | 24,999 | | | | 2,090 | | | | | 89.1 | | | | 1,500 | | | | 3.46 | | | | - | | | | 1,500 | | | | 134 | | | | | | | | | 371,039 | | | | 5.69 | | | | 7 | | | | 321,651 | | | | 11,256 | | | Costs incurred with respect to stock-based compensation for employees and directors for the years ended December 31, 2024 and December 31, 2023 were $ 640 thousand and $485 thousand, respectively. As of December 31, 2024, there was $ 177 thousand of unrecognized compensation costs related to non-vested employees and directors stock options, to be recorded over the next 3.5 years. | F-38 | | | c. | Options Granted to Consultants and service providers | | ** Below is a table summarizing all the compensation granted to consultants and service providers during the years ended December 31, 2024 and December 31, 2023: SCHEDULE OF STOCK OPTIONS GRANTED TO CONSULTANTS | | | Year of grant | | No. of options granted | | | Exercise price | | | Vesting period | | Fair value at grant (in thousands) | | | Expiration period | | | Non-employees | | 2024 | | | 1,500 | | | $ | 6.7-$6.7 | | | Quarterly over a period of two years | | $ | 9 | | | 10 years | | | Non-employees | | 2023 | | | 833 | | | $ | 13.6 | | | Annually over a period of five years | | $ | 9 | | | 10 years | | The fair value of options granted during 2024 and 2023 to consultants and service providers, was computed using the Black-Scholes model. The fair value of each stock option grant is estimated at the date of grant using a Black Scholes option pricing model. The volatility is based on the historical volatility of the Company, by statistical analysis of the weekly share price for past periods based on the expected term period, the expected term is the contractual term of each grant. The underlying data used for computing the fair value of the options are as follows: SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | Value of one common share | | $ | 6.7 | | | $ | 13.6 | | | | Dividend yield | | | 0 | % | | | 0 | % | | | Expected stock price volatility | | | 87 | % | | | 80 | % | | | Risk free interest rate | | | 3.71%-3.76 | % | | | 4.07 | % | | | Expected term (years) | | | 10 | | | | 10 | | | A summary of the Companys stock options granted to consultants and service providers as of December 31, 2024, and December 31, 2023 is presented below: SCHEDULE OF STOCK OPTIONS ACTIVITY | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | Number of Options | | | Weighted Average Exercise Price $ | | | Number of Options | | | Weighted Average Exercise Price $ | | | | Options outstanding at the beginning of the year | | | 26,703 | | | | 50.7 | | | | 51,714 | | | | 48.8 | | | | Changes during the year: | | | | | | | | | | | | | | | | | | | Granted | | | 1,500 | | | | 6.7 | | | | 833 | | | | 13.6 | | | | Expired | | | - | | | | - | | | | (2,333 | ) | | | 60.4 | | | | Forfeited | | | - | | | | - | | | | (23,511 | ) | | | 44.2 | | | | Cancelled | | | (1,500 | ) | | | 53.00 | | | | - | | | | - | | | | Options outstanding at end of the year | | | 26,703 | | | | 48.13 | | | | 26,703 | | | | 50.7 | | | | Options exercisable at end of the year | | | 22,104 | | | | 51.70 | | | | 20,606 | | | | 57.1 | | | | F-39 | | The following table presents summary information concerning the options granted and exercisable to consultants and service providers outstanding as of December 31, 2024 (in thousands, except per share data): SCHEDULE OF STOCK OPTIONS EXERCISABLE | Exercise Price $ | | | Number of Outstanding Options | | | Weighted Average Remaining Contractual Life | | | Aggregate Intrinsic Value $ | | | Number of Exercisable Options | | | Aggregate Exercisable Options Value $ | | | | | | | | | | | | | (in thousands) | | | | | | (in thousands) | | | | | 6.7 | | | | 1,500 | | | | 9.68 | | | | - | | | | 1,000 | | | | 7 | | | | | 13.6 | | | | 833 | | | | 8.44 | | | | - | | | | - | | | | - | | | | | 20 | | | | 2,833 | | | | 7.46 | | | | - | | | | 2,000 | | | | 40 | | | | | 29.6 | | | | 750 | | | | 6.96 | | | | - | | | | 750 | | | | 22 | | | | | 29.9 | | | | 2,000 | | | | 5.22 | | | | - | | | | 2,000 | | | | 60 | | | | | 40.9 | | | | 2,500 | | | | 4.75 | | | | - | | | | 2,500 | | | | 102 | | | | | 44.2 | | | | 512 | | | | 2.93 | | | | - | | | | 512 | | | | 23 | | | | | 45 | | | | 1,333 | | | | 4.53 | | | | - | | | | 500 | | | | 23 | | | | | 46 | | | | 2,000 | | | | 5.96 | | | | - | | | | 400 | | | | 18 | | | | | 48 | | | | 833 | | | | 1.94 | | | | - | | | | 833 | | | | 40 | | | | | 50.7 | | | | 500 | | | | 4.19 | | | | - | | | | 500 | | | | 25 | | | | | 59.9 | | | | 1,666 | | | | 3.81 | | | | - | | | | 1,666 | | | | 100 | | | | | 68.4 | | | | 750 | | | | 5.38 | | | | - | | | | 750 | | | | 51 | | | | | 70 | | | | 7,000 | | | | 4.83 | | | | - | | | | 7,000 | | | | 490 | | | | | 83.4 | | | | 860 | | | | 3.52 | | | | - | | | | 860 | | | | 72 | | | | | 84.3 | | | | 833 | | | | 3.04 | | | | - | | | | 833 | | | | 70 | | | | | | | | | 26,703 | | | | 5.36 | | | | - | | | | 22,104 | | | | 1,143 | | | Costs incurred with respect to options granted to consultants and service providers for the years ended December 31, 2024 and December 31, 2023 were $ 41 and $63, respectively. As of December 31, 2024, there was $ 17 of unrecognized compensation costs related to non-vested consultants and service providers, to be recorded over the next 3.07 years. | d. | Restricted Stock Units (RSUs) Granted to Employees | | ** Below is a table summarizing all the RSUs grants to employees and made during the years ended December 31, 2024: SCHEDULE OF STOCK OPTIONS GRANTED TO EMPLOYEES | | | Year Ended | | No. of options granted | | | Vesting period | | Fair value at grant (in thousands) | | | | Employees | | December 31, 2024 | | | 8,250 | | | Quarterly over a period of two years | | $ | 44 | | | | Employees | | December 31, 2023 | | | 14,200 | | | Quarterly over a period of two years | | $ | 50 | | | **** The fair value of each RSUs grant is estimated based on the market value of the underlying stock at the date of grant. A summary of the Companys RSUs granted to employees as of December 31, 2024 is presented below: SCHEDULE OF STOCK OPTIONS ACTIVITY GRANTED TO EMPLOYEES | | | Years Ended December 31 | | | Years Ended December 31 | | | | | | 2024 | | | 2023 | | | | | | Number of RSUs | | | Number of RSUs | | | | Options outstanding at the beginning of the period | | | 14,200 | | | | - | | | | Changes during the period: | | | | | | | | | | | Granted | | | 8,250 | | | | 14,200 | | | | Exercised | | | (12,410 | ) | | | - | | | | Forfeited | | | (1,306 | ) | | | - | | | | Options outstanding at end of the period | | | 8,734 | | | | 14,200 | | | | F-40 | | The following table presents summary information concerning the options granted and exercisable to employees and directors outstanding as of December 31, 2024 (in thousands, except per share data): SCHEDULE OF STOCK OPTIONS EXERCISABLE | year | | Number of Outstanding RSUs | | | Weighted Average Remaining Contractual Life | | | Aggregate Intrinsic Value $ | | | | | | | | | | | | | | (in thousands) | | | | 2024 | | | 2,434 | | | | 9.56 | | | | 5 | | | | 2023 | | | 6,300 | | | | 8.99 | | | | 12 | | | Costs incurred with respect to RSUs compensation for employees for the years ended December 31, 2024 and December 31, 2023 were $46 and $0. As of December 31, 2024, there was $36 of unrecognized compensation costs related to non-vested employees RSUs, to be recorded over the next 1.39 years. *e. Shares and warrants issued to advisors.* ** Below is a table summarizing the shares and warrants grants to advisers during the period from January 1, 2024 to December 31, 2024: SCHEDULE OF SHARES AND WARRANTS GRANTS TO ADVISORS | Date of issue of share or warrant | | Reason for issue of share or warrant | | Consideration | | Exercise price of warrants | | | Warrant vesting (subject to continued service provided to Company) | | Warrant expiry date | | | March 7, 2024 | | Strategic advisor agreement | | 50,000 shares of Common Stock and warrants to purchase 50,000 shares of Common Stock | | $ | 10.3 | | | One third on March 7, 2024, one third on June 5, 2024, and one third on September 3, 2024. | | March 6, 2029 | | | April 18, 2024 | | Strategic advisor agreement | | Warrants to purchase 50,000 shares of Common Stock | | $ | 10.3 | | | One third on April 18, 2024, one third on July 18, 2024, and one third on October 18, 2024. | | April 17, 2029 | | | April 23, 2024 | | Strategic advisor agreement | | Warrants to purchase 50,000 shares of Common Stock | | $ | 10.3 | | | One third on April 16, 2024, one third on July 16, 2024, and one third on October 16, 2024. | | April 22, 2029 | | | May 22, 2024 | | Strategic advisor agreement | | Warrants to purchase 47,500 shares of Common Stock | | $ | 10.3 | | | One third on May 21, 2024, one third on August 21, 2024, and one third on November 21, 2024. | | May 21, 2029 | | | July 14, 2024 | | Strategic advisor agreement | | Warrants to purchase 20,000 shares of Common Stock | | $ | 10.3 | | | One third on July 14, 2024, one third on October 14, 2024, and one third on January 14, 2024. | | July 13, 2029 | | | September 5, 2024 | | Strategic advisor agreement | | 50,000 shares of Common | | $ | 10.3 | | | | | | | | F-41 | | ** | | | No. of Warrants Granted | | | Vesting Period | | Fair Value at Grant (in thousands) | | | | Warrants | | | 217,500 | | | Over a period of nine months | | $ | 646 | | | | Shares | | | 50,000 | | | N/A | | $ | 350 | | | ** The fair valuation of these shares grants is based on the market value of the share at the date of grant. The fair valuation of these warrants grants is based on the following assumptions: SCHEDULE OF WARRANTS GRANTS ASSUMPTIONS | | | For the period ended December 31, 2024 | | | | Value of one common share | | $ | 5.1-$8.4 | | | | Dividend yield | | | 0 | % | | | Expected stock price volatility | | | 87%-91 | % | | | Risk free interest rate | | | 4.07%-4.68 | % | | | Expected term (years) | | | 5 | | | **NOTE 16 TAXES** **** | a. | Corporate taxation in the U.S. | | ** The corporate U.S. Federal Income tax rate applicable to the Company and its US subsidiaries is 21%. As of December 31, 2024, the Company has an accumulated tax loss carryforward of approximately $48 million (as of December 31, 2023, approximately $36 million). For U.S. federal income tax purposes, net operating losses (NOLs) arising in tax years beginning after December 31, 2017, the Internal Revenue Code of 1986, as amended (the Code) limits the ability to utilize NOL carryforwards to 80% of taxable income in tax years beginning after December 31, 2018. In addition, NOLs arising in tax years ending after December 31, 2017 can be carried forward indefinitely, but carryback is generally prohibited. NOLs generated in tax years beginning before January 1, 2018 will not be subject to the taxable income limitation, and NOLs generated in tax years ending before January 1, 2018 will continue to have a two-year carryback and twenty-year carryforward period. Deferred tax assets for NOLs will need to be measured at the applicable tax rate in effect when the NOL is expected to be utilized. The changes in the carryforward/carryback periods as well as the new limitation on use of NOLs may significantly impact the Companys valuation allowance assessments for NOLs generated after December 31, 2017. | F-42 | | In addition, utilization of the NOLs may be subject to substantial annual limitation under Section 382 of the Code due to an ownership change within the meaning of Section 382(g) of the Code. An ownership change subjects pre-ownership change NOL carryforwards to an annual limitation, which significantly restricts the ability to use them to offset taxable income in periods following the ownership change. In general, the annual use limitation equals the aggregate value of the Companys stock at the time of the ownership change multiplied by a specified tax-exempt interest rate. | b. | Corporate taxation in Israel | | ** The Israeli Subsidiaries are taxed in accordance with Israeli tax laws. The corporate tax rate applicable to 2024 and 2023 are 23%. As of December 31, 2024, the Israeli Subsidiary has an accumulated tax loss carryforward of approximately $10 million (as of December 31, 2023, approximately $10 million). Under the Israeli tax laws, carryforward tax losses have no expiration date. | c. | Deferred Taxes | | ** The following table presents summary of information concerning the Companys deferred taxes as of the years ending December 31, 2024 and December 31, 2023: SCHEDULE OF DEFERRED TAX ASSETS | | | 2024 | | | 2023 | | | | | | December 31, | | | | | | 2024 | | | 2023 | | | | | | (U.S. dollars in thousands) | | | | Deferred tax assets (liabilities), net: | | | | | | | | | | | Net operating loss carry forwards | | $ | 13,048 | | | $ | 12,331 | | | | Research and development expenses | | | 4,466 | | | | 3,932 | | | | Equity compensation | | | 1,357 | | | | 1,563 | | | | Employee benefits | | | 80 | | | | 70 | | | | Property, plants and equipment | | | (19 | ) | | | (26 | ) | | | Leases asset | | | - | | | | 66 | | | | Lease liability | | | - | | | | (67 | ) | | | Partnership Investment | | | 31 | | | | 8,627 | | | | Intangible assets | | | (1,455 | ) | | | (1,629 | ) | | | Bad debt allowance | | | 2,910 | | | | 575 | | | | Other | | | 1,024 | | | | 1,088 | | | | Deferred tax assets gross | | | 21,442 | | | | 26,530 | | | | | | | | | | | | | | | Valuation allowance | | | (21,442 | ) | | | (26,530 | ) | | | Net deferred tax liabilities | | $ | - | | | $ | - | | | Realization of deferred tax assets is contingent upon sufficient future taxable income during the period that deductible temporary differences and carry forwards losses are expected to be available to reduce taxable income. As the achievement of required future taxable income is not considered more likely than not achievable, the Company and all its subsidiaries have recorded full valuation allowance. The changes in valuation allowance are comprised as follows: SCHEDULE OF VALUATION ALLOWANCE ACTIVITY | | | December 31, | | | | | | 2024 | | | 2023 | | | | | | (U.S dollars in thousands) | | | | Balance at the beginning of year | | $ | (26,530 | ) | | $ | (14,753 | ) | | | Deconsolidation of Octomera | | | - | | | | 1,252 | | | | Change during the year | | | 5,088 | | | | (13,029 | ) | | | Balance at end of year | | $ | (21,442 | ) | | $ | (26,530 | ) | | ** | F-43 | | ** | d. | Reconciliation of the Theoretical Tax Expense to Actual Tax Expense | | ** The main reconciling item between the statutory tax rate of the Company and the effective rate is the provision for valuation allowance with respect to tax benefits from carry forward tax losses. | e. | Uncertain Tax Provisions | | ** ASC Topic 740, Income Taxes requires significant judgment in determining what constitutes an individual tax position as well as assessing the outcome of each tax position. Changes in judgment as to recognition or measurement of tax positions can materially affect the estimate of the effective tax rate and consequently, affect the operating results of the Company. As of December 31, 2024, the Company has not accrued a provision for uncertain tax positions. **NOTE 17 REVENUES** **** *Disaggregation of Revenue* The following table disaggregates the Companys revenues by major revenue streams. SCHEDULE OF DISAGGREGATION OF REVENUE | Revenue stream: | | | | | | | | | | | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Revenue stream: | | | | | | | | | | | Cell process development services and hospital services | | $ | 1,020 | | | $ | 515 | | | | License fees | | | 15 | | | | 15 | | | | Total | | $ | 1,035 | | | $ | 530 | | | A breakdown of the revenues per customer what constituted at least 10% of revenues is as follows: SCHEDULE OF BREAKDOWN OF REVENUES PER CUSTOMER | | | 2024 | | | 2023 | | | | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Revenue earned: | | | | | | | | | | | Customer A (United States) | | | 492 | | | | - | | | | Customer B (United States) | | | 300 | | | | 280 | | | | Customer C (United States) | | | - | | | | 90 | | | | Customer D (United States) | | | 150 | | | | 280 | | | | F-44 | | *Contract Assets and Liabilities* ** Contract assets are mainly comprised of accounts receivable net of allowance for doubtful debts, which includes amounts billed and currently due from customers. The activity for accounts receivable is comprised of: SCHEDULE OF ACTIVITY FOR TRADE RECEIVABLES | | | 2024 | | | 2023 | | | | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | | | | | | | | | | Balance as of beginning of period | | $ | 88 | | | $ | 36,183 | | | | Deconsolidation of Octomera | | | 82 | | | | (5,985 | ) | | | Additions | | | 670 | | | | 560 | | | | Collections | | | (1,268 | ) | | | (6,230 | ) | | | Allowances for credit losses | | | 469 | | | | (24,388 | ) | | | Exchange rate differences | | | (1 | ) | | | (52 | ) | | | Balance as of end of period | | $ | 40 | | | $ | 88 | | | The activity for contract liabilities is comprised of: SCHEDULE OF ACTIVITY FOR CONTRACT LIABILITIES | | | 2024 | | | 2023 | | | | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | | | | | | | | | | Balance as of beginning of period | | $ | 200 | | | $ | 70 | | | | Reconsolidation (deconsolidation) of Octomera | | | 110 | | | | (106 | ) | | | Deconsolidation of OBI | | | (60 | ) | | | - | | | | Additions | | | 300 | | | | 236 | | | | Realizations | | | (445 | ) | | | - | | | | Balance as of end of period | | $ | 105 | | | $ | 200 | | | **NOTE 18 COST OF DEVELOPMENT SERVICES AND RESEARCH AND DEVELOPMENT EXPENSES** **** SCHEDULE OF RESEARCH AND DEVELOPMENT EXPENSES | | | | 2024 | | | | 2023 | | | | | | | Years Ended December 31, | | | | | | | 2024 | | | | 2023 | | | | | | | (in thousands) | | | | Salaries and related expenses | | $ | 6,300 | | | $ | 4,800 | | | | Stock-based compensation | | | 158 | | | | 210 | | | | Subcontracting, professional and consulting services | | | 745 | | | | 3,662 | | | | Lab expenses | | | 113 | | | | 377 | | | | Depreciation expenses | | | 620 | | | | 312 | | | | Other research and development expenses | | | 2,043 | | | | 1,542 | | | | Less grant | | | (357 | ) | | | (280 | ) | | | Total | | $ | 9,622 | | | $ | 10,623 | | | | d. | Asset Purchase Agreement with Broaden. | | On July 10, 2024, the Company entered into an Asset Purchase Agreement (the Purchase Agreement) with Broaden Bioscience and Technology Corp. (Broaden) for the purchase by the Company of the following assets (the Assets): The process and algorithms developed by Broaden for processing CAR-T, RACE CAR-T and all oncology products that will enable the Company to develop and sell treatments to third parties, which include Broadens rights, title and interests in and to all intellectual property, including, but not limited to, patents, patent applications, know-how, materials, licenses, permits and approvals related thereto. Pursuant to the Purchase Agreement, in consideration for the purchase of the Assets, the Company will pay Broaden an amount equal to the value of the Assets established with the assistance of a third party valuation firm not to exceed $11,000 (the Consideration), less a debt adjustment relating to $10,767 owed to the Company by Broaden for work performed and invoiced (but fully impaired in the Companys financial statements) between August 2022 and May 2023 (the Debt), as detailed in the Purchase Agreement. The Consideration that exceeds the Debt will be payable at the election of the Company in shares of the Companys common stock at a price of $30.0 per share or 10% above the market price at such time it is paid, whichever is higher, or a note with amortization in 24 months from the date of the Purchase Agreement, including prepayment provisions. The Company accounted for the Purchase agreement by recording the difference between the Consideration and Debt as research and development expenses, and the consideration that exceeds the debt was recorded in other long-term liabilities. | F-45 | | *Asset Purchase Agreement with Theracell.* On July 12, 2024, the Company entered into an Asset Purchase Agreement (the Purchase Agreement) with Theracell Advanced Biotechnology S.A, Theracell Advanced Biotechnology LTD and IDNA Genomics Public Limited (collectively, Theracell) for the purchase by the Company of the following assets (the Assets) owned by Theracell: | | 50% of the outstanding ownership rights and equity interests in Theracell Laboratories IKE (Theracell IKE) not currently owned by the Company so that the Company shall own 100% of the outstanding equity interests of Theracell IKE; and | | | | Certain products (the Products), which include: (i) the manufacturing processes, algorithms, work instructions, test methods, standard operating procedures and specifications for producing Tumor Infiltrating Lymphocytes (TILs) that meet current Good Manufacturing Practice (cGMP) requirements that will enable the Company to potentially use this product as a platform for treating a wide variety of solid tumors; (ii) a 3rd generation GMP lentivirus production process, which is part of a therapy manufacturing process that will enable the Company to potentially treat Beta Thalassemia therapies; (iii) an oncolytic virus cell carrier platform which will enable the Company to potentially develop treatments for an array of cancers; (iv) a process for the potential treatment of mesenchymal stem cells for kidney disorders; (v) a process for controlled isolation of regenerative EVs derived from mesenchymal stem cells for the potential treatment of kidney disorders; and (vi) bioxome encapsulated APIs for improved transdermal delivery and bioavailability for the potential treatment of atopic dermatitis/wound healing; including Theracells rights, title and interests in and to all intellectual property, including, but not limited to, patents, patent applications, know-how, materials, licenses, permits and approvals relating to Products as further described in the Purchase Agreement. | | Pursuant to the Purchase Agreement, in consideration for the purchase of the Assets, the Company will pay Theracell an aggregate purchase price of $13,000 (the Consideration), which is equal to the value of the Assets established with the assistance of a third-party valuation firm, less a debt adjustment in the amount of $10,324 which was owed (but fully impaired in the Companys financial statements) by Theracell to the Company (the Debt). The aggregate Consideration will be paid by the Company as follows: (i) $400 will be paid to Theracell within 60 days after signing of the Purchase Agreement, (ii) $250 will be paid to Theracell within one year after signing of the Purchase Agreement, and (iii) the remaining amount (less any Debt) will be paid to Theracell in four equal annual payments beginning on December 30, 2025 and ending on December 30, 2028. As of the date of this annual report on Form 10-K, the Company had paid Theracell $243. The Company accounted for the Purchase agreement by recording the difference between the Consideration and Debt as research and development expenses, and the consideration that exceeds the debt was recorded in short term or other long-term liabilities as appropriate. **NOTE 19 FINANCIAL EXPENSES, NET** **** SCHEDULE OF FINANCIAL EXPENSES | | | | 2024 | | | | 2023 | | | | | | | Years Ended December 31, | | | | | | | 2024 | | | | 2023 | | | | | | | (in thousands) | | | | Interest expense on convertible loans | | $ | 3,737 | | | $ | 2,167 | | | | Foreign exchange loss, net | | | 782 | | | | 325 | | | | Other expense | | | (11 | ) | | | 7 | | | | Total | | $ | 4,508 | | | $ | 2,499 | | | **** | F-46 | | **** **NOTE 20 DECONSOLIDATION OF SUBSIDIARIES** **** *Deconsolidation of Orgenesis Biotech Israel Limited (OBI)* ** On February 14, 2024, following a claim for payment by employees of OBI of past salaries due, the district court in Haifa, Israel appointed a trustee to run the affairs of OBI. As a result of this appointment, effective February 14, 2024, the Company no longer controlled OBI and has ceased to consolidate the results of OBI into its consolidated results. The Company recognized a loss as a result of the deconsolidation of $66. The Company does not currently believe that rehabilitation is possible and purchased certain OBI equipment. The Company recorded $2,695 being what it owes to OBI under Accounts payable related Parties on the balance sheet of December 31, 2024. The following table summarizes the deconsolidated assets and liabilities as of February 14, 2024: SCHEDULE OF DECONSOLIDATE ASSETS AND LIABILITIES | | | | | | | | Total assets acquired: | | | | | | | Cash and cash equivalents | | $ | 4 | | | | Property, plants and equipment, net | | | 2,884 | | | | Other Assets | | | 1,422 | | | | Total assets | | $ | 4,310 | | | | | | | | | | | Total liabilities: | | $ | 4,244 | | | | Total Net Assets deconsolidated | | $ | 66 | | | | Loss from deconsolidation of OBI | | $ | 66 | | | Deconsolidation of Korea, Belgium, Services *Deconsolidation of Orgenesis Korea* ** During 2024, following a claim for payment by employees of Orgenesis Korea of past salaries due, the court in Korea ordered the liquidation of Orgenesis Korea. As a result of thereof, effective October 1, 2024 , the Company no longer controlled Orgenesis Korea and has ceased to consolidate the results of Orgenesis Korea into its consolidated results. The Company recognized a profit as a result of the deconsolidation of $1,335. | | | | | | | | Total assets acquired: | | | | | | | Cash and cash equivalents | | $ | 1 | | | | Property, plants and equipment, net | | | - | | | | Other Assets | | | 40 | | | | Total assets | | $ | 41 | | | | | | | | | | | Total liabilities: | | $ | 749 | | | | Total Net liabilities deconsolidated | | $ | 708 | | | | Total accumulated other comprehensive income deconsolidated | | $ | 627 | | | | Profit from deconsolidation of Orgenesis Korea | | $ | 1,335 | | | | F-47 | | *Deconsolidation of Orgenesis Belgium SRL and Orgenesis Services SRL (the Belgian subsidiaries)* ** On December 20, 2024, the Lige Business Court in Belgium appointed provisional liquidators for the Belgian subsidiaries. The Belgian subsidiaries had, on November 8, 2024, petitioned the Lige Business Court to allow a judicial reorganization pursuant to Article XX.41 of the Belgian Code of Economic Law. The petition followed the inability of the Belgian subsidiaries to pay employee payroll expenses and accounts payable. As a result of thereof, effective December 20, 2024, the Company no longer controlled the Belgian subsidiaries and has ceased to consolidate their results into its consolidated results. The Company recognized a profit as a result of the deconsolidation of $3,213. | | | | | | | | Orgenesis Belgium SRL | | | | | | | Total assets acquired: | | | | | | | Cash and cash equivalents | | $ | | | | | Property, plants and equipment, net | | | 13 | | | | Other Assets | | | 91 | | | | Total assets | | $ | 104 | | | | | | | | | | | Total liabilities assumed: | | $ | 2,453 | | | | Total net liabilities deconsolidated | | $ | 2,349 | | | | Total Accumulated Other Comprehensive income deconsolidated | | | 82 | | | | Profit from deconsolidation of Orgenesis Belgium SRL | | $ | 2,431 | | | | | | | | | | | Orgenesis Services SRL | | | | | | | Total assets acquired: | | | | | | | Cash and cash equivalents | | $ | 5 | | | | Property, plants and equipment, net | | | 768 | | | | Other Assets | | | 124 | | | | Total assets | | $ | 897 | | | | | | | | | | | Total liabilities assumed: | | $ | 1,852 | | | | Total net liabilities deconsolidated | | $ | 955 | | | | Total Accumulated Other Comprehensive loss deconsolidated | | $ | (175 | ) | | | Profit from deconsolidation of Orgenesis Services SRL | | $ | 782 | | | The deconsolidation of the Belgian subsidiaries is described in this note. For related legal proceedings, including the appointment of provisional liquidators by the Lige Business Court, see note 22. **NOTE 21 RELATED PARTIES TRANSACTIONS** **** | a. | Related Parties presented in the consolidated statements of comprehensive loss | | SCHEDULE OF RELATED PARTY TRANSACTIONS** | | | | Years ended December 31, | | | | | | | 2024 | | | | 2023 | | | | | | | (in thousands) | | | | Stock-based compensation expenses to executive officers | | $ | 89 | | | $ | 78 | | | | Stock-based compensation expenses to Board Members | | $ | 405 | | | $ | 99 | | | | Compensation of executive officers | | $ | 323 | | | $ | 690 | | | | Management and consulting fees to Board Members | | $ | 277 | | | $ | 380 | | | | F-48 | | | b. | Related Parties presented in the consolidated balance sheets | | SCHEDULE OF RELATED PARTIES PRESENTED IN CONSOLIDATED BALANCE SHEETS | | | December 31, | | | | | | 2024 | | | 2023 | | | | | | (in thousands) | | | | Executive officers payables | | $ | 225 | | | $ | 150 | | | | Non-executive directors payable | | $ | 543 | | | $ | 938 | | | | Amounts payable Orgenesis Biotech Israel Ltd | | $ | (2,695 | ) | | $ | - | | | ** **NOTE 22 LEGAL PROCEEDINGS** **** On January 18, 2022, a complaint (the Complaint) was filed in the Tel Aviv District Court (the Court) against the Company, Orgenesis Ltd (the Israeli Subsidiary), Prof. Sarah Ferber, Vered Caplan and Dr. Efrat Asa Kunik (collectively, the defendants) by plaintiffs the State of Israel, as the owner of Chaim Sheba Medical Center at Tel Hashomer (Sheba), and Tel Hashomer Medical Research, Infrastructure and Services Ltd. (collectively, the plaintiffs). In the Complaint, the plaintiffs are seeking that the Court issue a declaratory remedy whereby the defendants are required to pay royalties to the plaintiffs at the rate of 7% of the sales and 24% of any and all revenues in consideration for sublicenses related to any product, service or process that contain know-how and technology of Sheba and any and all know-how and technology either developed or supervised by Prof. Ferber in the field of cell therapy, including in the category of the point-of-care platform and any and all services and products in relation to the defendants CDMO activity. In addition, the plaintiffs seek that the defendants provide financial statements and pay NIS 10,000 to the plaintiffs due to the royalty provisions of the license agreement, dated February 2, 2012, between the Israeli subsidiary and Tel Hashomer Medical Research, Infrastructure and Services Ltd. (the License Agreement). The Complaint alleges that the Company and the Israeli subsidiary used know-how and technology of Sheba and know-how and technology either developed or supervised by Prof. Ferber while employed by Sheba in the field of cell therapy, including in the category of the point-of-care platform and the services and products in relation to the defendants CDMO activity and are entitled to the payment of certain royalties pursuant to the terms of the License Agreement. The defendants have filed their statements of defense responding to this Complaint, the Plaintiffs filed their response and the parties are now conducting disclosure proceedings in accordance with Israels civil regulations. In accordance with Israels civil regulations, the parties considered alternative means to resolve at least some of the disputes and have consented to engage the services of a mutually agreeable mediator. The mediation is currently taking place. According to managements estimation, since a loss is not considered probable, no provision was made in the financial statements. On September 6, 2023, a claim (the Claim) was filed in the Tel Aviv District Court (the Court) against the Company, the Israeli Subsidiary, Octomera LLC, Orgenesis Biotech Israel Ltd, Theracell Laboratories Private Company and Vered Caplan (collectively, the defendants) by Ehud Almon (Plaintiff) for certain finders fees and / or royalties related to sales made by an Octomera subsidiary to a Greek entity in the amount of $896 and also for other means of compensation. The Israeli Subsidiary and Vered Caplan filed their statement of defense on January 28, 2024 claiming, inter alia, that the Plaintiff did not serve as a broker, but rather served as the Greek entitys representative and as such he is not entitled to compensation of any kind from the defendants. It was also clarified that the defendants did not enter into a finders agreement with the Plaintiff. Additionally, the Israeli subsidiary and Vered Caplan claimed that the Plaintiff concealed material information from the court, including the signed partnership agreement between the Greek entitys owner and the Plaintiff, as well as certain criminal charges brought against him in Greece. On February 22, 2024, the Plaintiff filed a request for service of process to deliver the Claim to the Company and the other defendants incorporated outside of Israel. This request was denied on the same day. An appeal filed by the Plaintiff on the aforementioned decision was denied. On May 27, 2024, the Plaintiff filed a new request for service of process to deliver the Claim to the Company and the other defendants incorporated outside of Israel. On May 28, 2024 the request was accepted. The court ruled that the Claim be delivered via courier to the Company and Octomera LLC, and delivered in accordance with the Hague Convention to Theracell Laboratories. After requesting a continuance, on September 18, 2024, the Plaintiff filed an update that the Claim was delivered to the Company and Octomera LLC on August 16, 2024. On the same day, the Claimant also filed a motion, petitioning that the Claim will be delivered to Theracell Laboratories via the Company or via Vered Caplan, in order to minimize the costs of translating and delivering the Claim to Greece. On October 7, 2024 Vered Caplan filed her opposition to the abovementioned motion, claiming that there is no legal basis for the Claimants request, especially since the ruling regarding the service of process was made per the Plaintiffs request. On October 10, 2024 the Company filed its opposition to the request, on the same basis, mentioning, inter alia, that the claim itself has no connection to Israel and that the Israeli courts are not the appropriate forum for the Plaintiffs claims. Ruling on the abovementioned motion is pending. According to managements estimation, since the likelihood of the Plaintiff winning the case is less than fifty percent, no provision was made in the financial statements. | F-49 | | On October 26, 2023, a complaint was filed in the Supreme Court of the State of New York by plaintiffs Southern Israel Bridging Fund Two LP and Mr. Amir Hasidim, against the Company, seeking the payment of $1,150 together with interest in the amount of 6%. In the Complaint plaintiffs alleged the amount provided to the Company was based on a Convertible Loan Agreement dated May 17, 2022, which provided for a loan amount of $5,000. Notwithstanding the Convertible Loan Agreement, on August 21, 2023, Company sent the plaintiffs an offset notice in light of the plaintiffs breach of obligations under the Convertible Loan Agreement and the damages caused to the Company as a result of said breach. The Company counter sued as well, seeking damages for Plaintiffs breach of contract, fraud and harassment. Accordingly, the Company disputes whether it owes plaintiffs the amount sought in the Complaint. On November 1, 2023, a claim (the Claim) was filed in the Tel Aviv District Court (the Court) against the Company, the Israeli Subsidiary, and Vered Caplan (collectively, the Defendants) by Fidelity Venture Capital Ltd. and Dror Atzmon (together the Plaintiffs). The claim is based on two agreements the Company entered into with the Plaintiffs on November 2, 2016: (a) an unsecured convertible note agreements for an aggregate amount of NIS 1 million ($280). The loan bears a monthly interest rate of 2% and will mature on May 1, 2017, unless converted earlier and (b) a consultation agreement which awarded the Plaintiffs 80 thousand warrants. The exercise price of the warrants and conversion price were fixed at $5.2 per share (pre-reverse stock split implemented by the Company in November 2017). On April 27, 2017, and November 2, 2017, the Company entered into extension agreements through November 2, 2017 and May 2, 2018, respectively, in connection with the convertible note agreements. In March 2018, the Plaintiffs submitted a notice of their intention to convert into shares the Companys common stock, the principal amount of the loan, and accrued interest of approximately $383 outstanding. In addition, the Plaintiffs exercised all the warrants awarded in the consultation agreement. In light of the reverse stock split which took place in November 2017, the Company disagreed with the plaintiffs calculations regarding the number of issuable shares of Common Stock. The Company responded to the notice and rejected these contentions in their entirety. In April 2018, the Company terminated the agreements based on several claims, including mistake, intentional misrepresentation and bad faith. Therefore, the Company deposited the shares in total amount of 10,798 issued under those agreements and the principal amount and accrued interest of the loan in an escrow account. The deposit of the principal amount and accrued interest presented as restricted cash in the balance sheet as of December 31, 2024. Based on the calculation difference, in their Claim, the Plaintiffs request damages in the amount of NIS 40,143, and the issuance of 1,186,960 shares of the Company. The Defendants filed their statement of defense on April 15, 2024, in which they raised, among others, the aforementioned claims and additional procedural and substantial claims, including laches. The parties have agreed to start mediation proceeding in connection with the Claim. The mediation is currently taking place. According to managements estimation, since the likelihood of the Plaintiffs winning the case is less than fifty percent, no provision was made in the financial statements. On July 11, 2024, the Israeli subsidiary (Declared bankrupt by Israeli district court in August 2025) reached a settlement agreement regarding unpaid rentals sanctioned by the Tel Aviv Magistrates court pursuant to which the subsidiary will pay the amount of NIS 427,000 (approximately $114) including VAT to the lessor of leased premises no later than September 30, 2024, which includes a grace period for late payments. As of the date of this annual report on Form 10-K, the Company had paid all of the settlement amount less $47, and the lessor agreed to defer payment of the $47 to December 28, 2024. In the event that the Company fails to meet all of its obligations under the settlement agreement, the Company may be liable to pay an additional NIS 211,000 (approximately $57) over and above the amount still due, in respect of claims for unpaid rentals made by the lessor. On December 20, 2024, the Lige Business Court in Belgium appointed provisional liquidators for Orgenesis Belgium SRL and Orgenesis Services SRL (the Belgian subsidiaries). The Belgian subsidiaries had, on November 8, 2024, petitioned the Lige Business Court to allow a judicial reorganization pursuant to Article XX.41 of the Belgian Code of Economic Law. The petition followed the inability of the Belgian subsidiaries to pay employee payroll expenses and accounts payable. On December 19, 2024, Murray Bacal filed a complaint against Orgenesis, Inc. in the circuit court of the eleventh judicial circuit in and for Miami-Dade County, Florida claiming non-payment for services provided pursuant to terms of a strategic advisor agreement. On June 8, 2025, the court entered a default final judgment against the Company for damages calculated to be $512 plus post-judgment interest. The Company has filed a motion to vacate the default final judgment as void for non-service of the complaint on the defendant. On March 4, 2026, the Court vacated the default final judgment in its entirety. | F-50 | | On January 30, 2026, the Company, via service of process to the New York Secretary of State, was served with a complaint captioned Newtech Investment Holdings, LLC, Ariel Malik, and Guy Hoffman vs. Orgenesis Inc. and Theracell Advanced Biotechnology Ltd. The complaint requests specific performance. The complaint alleges that the Company and Theracell Advanced Biotechnology Ltd. entered into a Joint Venture Agreement dated December 25, 2022, and that rights previously assigned by the Company to Texas Advanced Therapies LLC were transferred to the plaintiffs upon the dissolution of Texas Advanced Therapies LLC. The Company disputes that the dissolution transferred those rights to the plaintiffs without the Companys consent and intends to contest the claim vigorously, furthermore the JV Agreement contains a clause that in the event of a dissolution of any party to the agreement the JV agreement is terminated. On March 10, 2026, the court denied Plaintiffs motion to seal the Joint Venture Agreement in its entirety and directed the clerk to unseal the filed agreement. Except as described above, the Company is not involved in any pending material legal proceedings. **NOTE 23 SUBSEQUENT EVENTS** **** On January 22, 2025, the Company entered into an Equity Purchase Agreement (the Equity Purchase Agreement) with Williamsburg Venture Holdings, LLC, a Nevada limited liability company (Investor), pursuant to which the Investor agreed to invest up to $5,000,000 over a 24-month period (unless otherwise determined therein) in accordance with the terms and conditions of an Equity Purchase Agreement, dated as of January 22, 2025, by and between Orgenesis and the Investor. In connection with the Equity Purchase Agreement, the parties also entered into a Registration Rights Agreement (the Registration Rights Agreement) pursuant to which the Company agreed to register with the SEC the ordinary shares issuable under the Equity Purchase Agreement, among other securities. The Investor agrees to fund $750,000 upon the Registration Statement being deemed effective by the SEC. During the remaining term, the Company shall be entitled to put to the Investor, and the Investor shall be obligated to purchase, such number of ordinary shares of Orgenesis (such shares, the Put Shares) and at such price as are determined in accordance with the Equity Purchase Agreement. The per share purchase price for the Put Shares shall be 90% of the market price defined as the average of the two (2) lowest Volume-Weighted Average Price (VWAP) for the five (5) consecutive trading days immediately preceding the relevant Clearing Date (defined therein), as reported by Bloomberg Finance L.P. or other reputable source. At the Companys option, under an Accelerated Purchase Notice (defined therein), the Company may deliver a put notice by 11:00 AM on a particular day with a per share purchase price that would be the lowest traded price on that day. Further, in consideration of Orgenesis Put rights, the Investor shall be entitled to 168,182 ordinary shares of Orgenesis from the date of the Equity Purchase Agreement and pursuant to the Equity Purchase Agreement, the Investor may not acquire at any point, more than 9.99% of the outstanding ordinary shares of Orgenesis. On February 28, 2025, the Company entered into an Agreement (the Asset Purchase Agreement) with Neurocords, LLC. (Neurocords) for the purchase by the Company of certain intellectual property assets and all development product, deliverables and data related thereto in the field of advanced regenerative medicine therapies for spinal cord injuries (SCI) (the Assets). In addition, Neurocords and Company entered into mutual releases against all future claims, and terminated certain licensing and related agreements previously entered into. In addition, the Company will have a three-month option at no further cost to receive an assignment of the William Rice University Option Agreement, dated November 24, 2024. Pursuant to the Asset Purchase Agreement, in consideration for the purchase of the Assets, the Company issued to Neurocords 1,200,000 shares of common stock, free and clear of any trading restrictions after the initial 6-month restricted period, or any other restrictions or third-party rights. On August 9, 2025, Yaron Adler and Adam Pelavin notified Orgenesis Inc. (the Company), of their decision to resign as directors of the Company, effective immediately. Mr. Adler and Mr. Pelavins resignations were not the result of any disagreement with the Company, or its management on any matter relating to the Companys operations, policies or practices. | F-51 | | On August 18, 2025, Santhosh Nagaraja notified Orgenesis Inc. (the Company), of his decision to resign as director of the Company, effective immediately. Mr. Nagarajas resignation was not the result of any disagreement with the Company, or its management on any matter relating to the Companys operations, policies or practices. On August 21, 2055, Ashish Nanda notified Orgenesis Inc. (the Company), of his decision to resign as director of the Company, effective immediately. Mr. Nandas resignation was not the result of any disagreement with the Company, or its management on any matter relating to the Companys operations, policies or practices. On August 6, 2025, the district court in Lod, Israel declared Orgenesis Limited, the Israeli subsidiary, bankrupt and ordered it to be dissolved. On June 13, 2025 the Company and Germfree reached a settlement thus resolving any remaining differences between themselves. On September 10, 2025, Theracell Laboratories IKE (Theracell), a subsidiary of Octomera LLC, which is a subsidiary of the Company, entered into a Convertible Loan Agreement (the Agreement) with Alpha Prosperity Fund SPC, acting on behalf of and for the account of Segregated Portfolio P (the Lender). Pursuant to the Agreement, the Lender agreed to provide Theracell with an initial loan in the principal amount of $1,000,000 (the Loan). The Loan will bear simple interest at a rate of 10% per annum and has a maturity of 36 months. For the first 30 days following the effective date, the Borrower may prepay the Loan without the consent of the Lender. Thereafter, repayment requires the Lenders prior approval. Beginning after 30 days and continuing until maturity, the Lender has the option, at its sole discretion, to convert the outstanding amount into equity of either the Company or Theracell, such that the Lender would hold up to 80% of the outstanding share capital of the applicable entity. The conversion of the Loan into shares of the Company is subject to shareholder approval of the issuance of the required shares. In addition, the Agreement provides that the Lender will be issued a warrant to purchase 15% of the fully diluted share capital of either the Company or Theracell, at the Lenders discretion, for an aggregate exercise price of $250,000 and exercisable for three years from issuance. The issuance of shares upon exercise of the warrant is likewise subject to shareholder approval of the issuance of such shares. Additional warrants would be issued in connection with each cumulative drawdown of an additional $1,000,000 under the credit facility referenced below. The Agreement further provides Theracell with access to a credit facility of up to $10,000,000, available in tranches with the Lenders prior written approval in its sole discretion. Drawdowns under the facility are subject to the same terms as the Loan, other than the conversion feature. Theracell has drawn $10,000,000 under the credit facility as well as $775,000 paid over and above the $10,000,000 credit line amount as of the date of this annual report on Form 10-K. The previously outstanding debt facilities from Newtech Investment Holdings, LLC and Ariel Malik totaling $6,083,857 were repaid from the proceeds of the facility. The Agreement also provides that, following the lapse of 30 days from the Effective Date and subject to the receipt of all necessary corporate and legal approvals, the Lender may appoint three members to the Companys Board of Directors, which appointments will be subject to the disclosure and filing requirements of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission. On January 9th, 2026, the Company issued to Lender a warrant (the Alpha Warrant) exercisable for 3,289,490 shares of the Companys common stock, par value $0.0001 per share (the Common Stock), with a three year expiration and an aggregate exercise price equal to $250,000. The Alpha Warrant and the shares of Common Stock issuable upon exercise of such Warrant have not been registered under the Securities Act of 1933, as amended (the Securities Act), and shall be exempt from registration under Section 4(a)(2) of the Securities Act as a transaction not involving a public offering. On August 8, 2025, Mr. Victor Miller, the Chief Financial Officer, Treasurer and Secretary of the Company, resigned effective immediately from all positions he held with the Company to pursue other opportunities. Mr. Millers decision to resign did not result from any disagreement with the Company, its management or its board of directors on any matter, whether related to the Companys operations, policies, practices or otherwise. On March 10, 2026, the Companys Board of Directors elected Adam Pelavin and Yaron Adler to serve as members of the Board, effective immediately, with terms expiring at the Companys 2026 annual meeting of stockholders and thereafter until their successors are duly elected and qualified, or until earlier death, resignation, or removal. In connection with these elections, the Board approved fixing the size of the Board at four members. Mr. Pelavin was appointed to the audit committee, and Mr. Adler was appointed to the compensation committee. On March 10, 2026, the Company appointed Douglas Karriker as its Chief Financial Officer, effective March 10, 2026. Mr. Karriker previously served in roles at the Company and has relevant employment experience. There is no arrangement or understanding pursuant to which he was selected as an officer, and the Company is not aware of any related-party transactions requiring disclosure under Item 404(a) of Regulation S-K. | F-52 | | ****