What changed in this filing

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Item 1A. Risk Factors

2021-09-13 compared with 2020-09-10 · 940 added, 850 removed, 16 unchanged (99% of the section changed)

Risk Factors.

following risk factors, among others, could affect our actual results of operations and could cause our actual results to differ

materially from those expressed in forward-looking statements made by us.

These forward-looking statements are based on current

expectations and except as required by law we assume no obligation to update this information.

You should carefully consider the

risks described below and elsewhere in this Annual Report before making an investment decision.

Our business, financial condition

or results of operations could be materially adversely affected by any of these risks.

Our common stock is considered speculative

and the trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

An investment in our securities

involves a high degree of risk.

You should consider carefully the following information about these risks, together with the other information

contained in this Annual Report on Form 10-K before making an investment decision.

Our business, prospects, financial condition and results

of operations may be materially and adversely affected as a result of any of the following risks.

The value of our securities could decline

as a result of any of these risks.

You could lose all or part of your investment in our securities.

Some of the statements in “Item

Risk Factors” are forward-looking statements.

The following risk factors are not the only risk factors facing our Company.

Additional risks and uncertainties not presently

known to us or that we currently deem immaterial may also affect our business.

may need to raise additional financing to support the research, development and manufacturing of our cell therapy products and

our products in the future but we cannot be sure we will be able to obtain additional financing on terms favorable to us when

If we are unable to obtain additional financing to meet our needs, our operations may be adversely affected or terminated.

is highly likely that we will need to raise significant additional capital in the future.

Although we were successful in raising

capital in the past, our current financial resources are limited, and are dependent, to a certain extent, on our achieving certain

milestones, and may not be sufficient to finance our operations until we become profitable, if that ever happens.

is likely that we will need to raise additional funds in the near future in order to satisfy our working capital and capital expenditure

requirements.

Therefore, we are dependent on our ability to sell our common stock for funds, receive grants, potentially receive

milestone payments pursuant to the EIB agreement, enter into collaborations and licensing deals or to otherwise raise capital.

There can be no assurance that we will be able to obtain financing, including any funding under the EIB Agreement.

our common stock in the future will result in dilution to existing stockholders and could adversely affect the market price of

our common stock.

we may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary

to conduct the development and commercialization of our potential cell therapy products, which could result in the loss of some

or all of one’s investment in our common stock.

likelihood of profitability depends on our ability to license and/or develop and commercialize products based on our cell production

technology, which is currently in the development stage.

If we are unable to complete the development and commercialization of

our cell therapy products successfully, our likelihood of profitability will be limited severely .

are engaged in the business of developing cell therapy products.

We have not realized a profit from our operations to date and

there is little likelihood that we will realize any profits in the short or medium term.

Any profitability in the future from

our business will be dependent upon successful commercialization of our potential cell therapy products and/or licensing of our

products, which will require additional research and development.

we are not able to successfully license and/or develop and commercialize our cell therapy product candidates and obtain the necessary

regulatory approvals, we may not generate sufficient revenues to continue our business operations.

far, the product candidates we are developing have completed one Phase I/II clinical trial of Gluteal Musculature rehabilitation

after total hip arthroplasty (efficacy, ongoing for safety), two Phase I clinical trials for CLI, and one Phase II clinical trial

In addition, we currently have an ongoing Phase II FDA study of PLX cells for the treatment of severe COVID-19 complicated

by ARDS and two Phase III multinational clinical trials with our PLX-PAD product candidate:

one in CLI, and the other in muscle

recovery following surgery for hip fracture.

Our early stage cell therapy product candidates may fail to perform as we expect.

Moreover, even if our cell therapy product candidates successfully perform as expected, in later stages of development they may

fail to show the desired safety and efficacy traits despite having progressed successfully through pre-clinical or initial clinical

We will need to devote significant additional research and development, financial resources and personnel to develop

commercially viable products and obtain the necessary regulatory approvals.

our cell therapy product candidates do not prove to be safe and effective in clinical trials, we will not obtain the required

regulatory approvals.

If we fail to obtain such approvals, we may not generate sufficient revenues to continue our business operations.

if we obtain regulatory approval of a product, that approval may be subject to limitations on the indicated uses for which it

may be marketed.

Even after granting regulatory approval, the FDA, the EMA, and regulatory agencies in other countries continue

to regulate marketed products, manufacturers and manufacturing facilities, which may create additional regulatory barriers and

Later discovery of previously unknown problems with a product, manufacturer or facility, may result in restrictions on

the product or manufacturer, including a withdrawal of the product from the market.

regulatory agencies may establish additional regulations that could prevent or delay regulatory approval of our product candidates.

cannot market and sell our cell therapy product candidates in the United States, Europe, or in other countries if we fail to obtain

the necessary regulatory approvals or licensure.

cannot sell our cell therapy product candidates until regulatory agencies grant marketing approval, or licensure.

of obtaining regulatory approval is lengthy, expensive and uncertain.

It is likely to take at least several years to obtain the

required regulatory approvals for our cell therapy product candidates, or we may never gain the necessary approvals.

difficulties that we encounter in obtaining regulatory approval may have a substantial adverse impact on our operations and cause

our stock price to decline significantly.

obtain marketing approvals in the United States and Europe for cell therapy product candidates we must, among other requirements,

complete carefully controlled and well-designed clinical trials sufficient to demonstrate to the FDA, the EMA and the PMDA that

the cell therapy product candidates is safe and effective for each disease for which we seek approval.

So far, we have successfully

conducted Phase I/II and Phase I clinical trials for our PLX-PAD product candidate.

Several factors could prevent completion or

cause significant delay of these trials, including an inability to enroll the required number of patients or failure to demonstrate

adequately that cell therapy product candidates are safe and effective for use in humans.

Negative or inconclusive results from

or adverse medical events during a clinical trial could cause the clinical trial to be repeated or a program to be terminated,

even if other studies or trials relating to the program are successful.

The FDA or EMA (or, if we seek to conduct development

efforts in Japan, the PMDA) can place a clinical trial on hold if, among other reasons, it finds that patients enrolled in the

trial are or would be exposed to an unreasonable and significant risk of illness or injury.

If safety concerns develop, we, the

FDA, the EMA or other regulatory bodies could stop our trials before completion.

we are not able to conduct our clinical trials properly and on schedule, marketing approval by FDA, EMA, MOH and other regulatory

authorities may be delayed or denied.

completion of our clinical trials may be delayed or terminated for many reasons, such as:

FDA, the EMA or the MOH does not grant permission to proceed or places additional trials

on clinical hold;

do not enroll in our trials at the rate we expect, including as a result of COVID-19;

actions, such as those enacted during the ongoing COVID-19 pandemic, that limit the general

populations movement;

regulators may ask to increase subject’s population in the clinical trials;

risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business, prospects, financial

condition and results of operations.

Summary of Risk Factors

Our business is subject to a number of risks,

including risks that may adversely affect our business, financial condition and results of operations.

These risks are discussed more

fully below and include, but are not limited to, risks related to:

COVID-19 pandemic has caused interruptions and delays of our business plan and may have a significant adverse effect on our business;

have a history of losses and have not generated significant revenues to date.

We expect to experience future losses and do not foresee

generating significant or steady revenues in the immediate future;

may need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult

to obtain and could dilute our shareholders’ ownership interests, and such offers or availability for sale of a substantial number

of our common shares may cause the price of our publicly traded shares to decline;

may become subject to claims by much larger and better funded competitors enforcing their intellectual property rights against us or

seeking to invalidate our intellectual property or our rights thereto;

studies necessary to support the approval of our applications are often lengthy and expensive and require the enrollment of a large number

Suitable patients may be difficult to identify and enroll.

Any delay or failure of clinical trials could delay us from commercializing

our product candidates, which would materially and adversely affect our results of operations and the value of our business;

may not be able to successfully license our product candidates;

are inherent risks in the manufacturing of our product candidates, including meeting relevant high regulatory standards, the failure

of which could materially and adversely affect our results of operations and the value of our business;

may be subject, directly or indirectly, to applicable U.S.

federal and state anti-kickback, false claims laws, healthcare and security

laws and regulations, which could expose us to criminal sanctions civil penalties, contractual damages, reputational harm and diminished

profits and future earnings;

may be exposed to product liability and corporate claims and insurance may not be sufficient to cover these claims;

the United States and Europe, our business could be significantly and adversely affected by healthcare reform initiatives and/or other

legislation or judicial interpretations of existing or future healthcare laws and/or regulations;

we are unable to obtain and maintain intellectual property protection covering our products and technology, others may be able to utilize

our intellectual property, which would adversely affect our business;

are an international business, and we are exposed to various global and local risks that could have a material adverse effect on our

financial condition and results of operations;

market prices of our common shares are subject to fluctuation and have been and may continue to be volatile, which could result in substantial

losses for investors;

anticipate being subject to fluctuations in currency exchange rates because a significant portion of our business is conducted outside

the United States and we are exposed to currency exchange fluctuations in other currencies such as the New Israeli Shekel, or NIS, and

the Euro, because a significant portion of our expenses in Israel are paid in NIS, and we anticipate receipt of additional funds in Euros

from the EIB Finance Agreement;

● restrictions

and covenants contained in the EIB Finance Agreement may restrict our ability to conduct certain strategic initiatives;

limitations we may face relating to the grants we have received from the IIA may impact our plans and future decisions;

there are significant shifts in the political, economic and military conditions in Israel and its neighboring countries, it could have

a material adverse effect on our business relationships and profitability;

may be difficult for investors in the United States to enforce any judgments obtained against us or some of our directors or officers.

Risk Related to Our Business

We may need to raise additional financing

to support the research, development and manufacturing of our cell therapy products in the future, but we cannot be sure we will be able

to obtain additional financing on terms favorable to us when needed.

If we are unable to obtain additional financing to meet our needs,

our operations may be adversely affected or terminated.

It is highly likely that we

will need to raise significant additional capital in the future.

Although we were successful in raising capital in the past, our current

financial resources are limited, and are dependent, to a certain extent, on our achieving certain milestones, and may not be sufficient

to finance our operations until we become profitable, if that ever happens.

It is likely that we will

need to raise additional funds in the future in order to satisfy our working capital and capital expenditure requirements.

we are dependent on our ability to sell our common shares for funds, receive grants, potentially receive milestone payments pursuant to

the EIB Finance Agreement, enter into collaborations and licensing deals or to otherwise raise capital.

There can be no assurance that

we will be able to obtain financing, including any funding under the EIB Finance Agreement.

Any sale of our common shares in the future

will result in dilution to existing shareholders and could adversely affect the market price of our common shares.

Also, we may not be able to

borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to conduct the development

and commercialization of our potential cell therapy products, which could result in the loss of some or all of one’s investment

in our common shares.

Our likelihood of profitability depends

on our ability to license and/or develop and commercialize our products based on our cell production technology, which is currently in

the development stage.

If we are unable to complete the development and commercialization of our cell therapy products successfully, our

likelihood of profitability will be limited severely .

We are engaged in the business

of developing cell therapy products.

We have not realized a profit from our operations to date and there is little likelihood that we

will realize any profits in the short or medium term.

Any profitability in the future from our business will be dependent upon successful

commercialization of our potential cell therapy products and/or licensing of our products, which will require additional research and

The clinical manufacturing process for cell

therapy products is complex and requires meeting high regulatory standards.

Any delay or problem in the clinical manufacturing of PLX

may result in a material adverse effect on our business.

Our manufacturing process,

controls, equipment and quality system for PLX-PAD have received approval from the FDA, EMA, Germany’s PEI, the MFDS and the PMDA.

However, the clinical manufacturing process is complex, and we have no experience in manufacturing our product candidates at a commercial

There can be no guarantee

that we will be able to successfully develop and manufacture our product candidates in a manner that is cost-effective or commercially

viable, or that our development and manufacturing capabilities might not take much longer than currently anticipated to be ready for the

In addition, if we fail to maintain regulatory approvals for our manufacturing facilities, we may suffer delays in our ability

to manufacture our product candidates.

This may result in a material adverse effect on our business.

If we are not able to successfully license

and/or develop and commercialize our cell therapy product candidates and obtain the necessary regulatory approvals, we may not generate

sufficient revenues to continue our business operations.

So far, the product candidates

we are developing have completed one Phase I/II clinical trial of Gluteal Musculature rehabilitation after total hip arthroplasty (efficacy,

ongoing for safety), two Phase I clinical trials for CLI, one Phase II clinical trial in IC and a multinational Phase III study in CLI.

In addition, we currently have two ongoing Phase II FDA studies of PLX cells for the treatment of COVID-19 complicated by ARDS and one

Phase III multinational clinical trial with our PLX-PAD product candidate in muscle recovery following surgery for hip fracture.

our second product candidate, PLX-R18, is currently in a Phase I study for recovery following HCT.

Our early stage cell therapy product

candidates may fail to perform as we expect.

Moreover, even if our cell therapy product candidates successfully perform as expected, in

later stages of development they may fail to show the desired safety and efficacy traits despite having progressed successfully through

pre-clinical or initial clinical testing.

We will need to devote significant additional research and development, financial resources

and personnel to develop commercially viable products and obtain the necessary regulatory approvals.

If our cell therapy product

candidates do not prove to be safe and effective in clinical trials, we will not obtain the required regulatory approvals.

to obtain such approvals, we may not generate sufficient revenues to continue our business operations.

Even if we obtain regulatory

approval of a product, that approval may be subject to limitations on the indicated uses for which it may be marketed.

Even after granting

regulatory approval, the FDA, the EMA, and regulatory agencies in other countries continue to regulate marketed products, manufacturers

and manufacturing facilities, which may create additional regulatory barriers and burdens.

Later discovery of previously unknown problems

with a product, manufacturer or facility, may result in restrictions on the product or manufacturer, including a withdrawal of the product

from the market.

Further, regulatory agencies

may establish additional regulations that could prevent or delay regulatory approval of our product candidates.

We have not generated significant or consistent revenues to date,

which raises doubts with respect to our ability to generate revenues in the future.

We have a limited operating

history in our business of commercializing cell production technology.

Until we entered into the prior license agreement with United Therapeutics

Corporation which was terminated in December 2015, we did not generate any material revenues and we have not generated any material revenues

since that date.

It is not clear when we will generate revenues or whether we will experience further delays in recognizing revenues such

as if we experienced a clinical hold.

Our primary source of funds has been the sale of our common shares, government grants and funds

distributed pursuant to our EIB Finance Agreement.

We cannot give assurances that we will be able to generate any significant revenues

or income in the future.

There is no assurance that we will ever be profitable.

If we encounter problems or delays in the

research and development of our potential cell therapy products, we may not be able to raise sufficient capital to finance our operations

during the period required to resolve such problems or delays.

Our cell therapy products

are currently in the development stage and we anticipate that we will continue to incur substantial operating expenses and incur net losses

until we have successfully completed all necessary research and clinical trials.

We, and any of our potential collaborators, may encounter

problems and delays relating to research and development, regulatory approval and intellectual property rights of our technology.

research and development programs may not be successful, and our cell culture technology may not facilitate the production of cells outside

the human body with the expected result.

Our cell therapy products may not prove to be safe and efficacious in clinical trials.

of these events occur, we may not have adequate resources to continue operations for the period required to resolve the issue delaying

commercialization and we may not be able to raise capital to finance our continued operation during the period required for resolution

of that issue.

Accordingly, we may be forced to discontinue or suspend our operations.

Because most of our officers and directors

are located in non-U.S.

jurisdictions, you may have no effective recourse against the management for misconduct and may not be able to

enforce judgment and civil liabilities against our officers, directors, experts and agents.

Most of our directors and

officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of their assets are

located outside the United States.

As a result, it may be difficult

to enforce within the United States any judgments obtained against our officers or directors, including judgments predicated upon the

civil liability provisions of the securities laws of the United States or any U.S.

Risks Related to Development,

Clinical studies, and Regulatory Approval of Our Product Candidates

We cannot market and sell our cell therapy

product candidates in the United States, Europe, or in other countries if we fail to obtain the necessary regulatory approvals or licensure.

We cannot sell our cell therapy

product candidates until regulatory agencies grant marketing approval, or licensure.

The process of obtaining regulatory approval is lengthy,

expensive and uncertain.

It is likely to take at least several years to obtain the required regulatory approvals for our cell therapy

product candidates, or we may never gain the necessary approvals.

Any difficulties that we encounter

in obtaining regulatory approval may have a substantial adverse impact on our operations and cause our share price to decline significantly.

To obtain marketing approvals

in the United States and Europe for cell therapy product candidates we must, among other requirements, complete carefully controlled and

well-designed clinical trials sufficient to demonstrate to the FDA, the EMA and the PMDA that the cell therapy product candidates is safe

and effective for each disease for which we seek approval.

So far, we have successfully conducted Phase I/II and Phase I clinical trials

for our PLX-PAD product candidate.

Several factors could prevent completion or cause significant delay of these trials, including an inability

to enroll the required number of patients or failure to demonstrate adequately that cell therapy product candidates are safe and effective

for use in humans.

Negative or inconclusive results from or adverse medical events during a clinical trial could cause the clinical trial

to be repeated or a program to be terminated, even if other studies or trials relating to the program are successful.

The FDA or EMA (or,

if we seek to conduct development efforts in Japan, the PMDA) can place a clinical trial on hold if, among other reasons, it finds that

patients enrolled in the trial are or would be exposed to an unreasonable and significant risk of illness or injury.

If safety concerns

develop, we, the FDA, the EMA or other regulatory bodies could stop our trials before completion.

If we are not able to conduct our clinical

trials properly and on schedule, marketing approval by FDA, EMA, MOH and other regulatory authorities may be delayed or denied.

The completion of our clinical

trials may be delayed or terminated for many reasons, such as:

FDA, the EMA or the MOH does not grant permission to proceed or places additional trials on clinical hold;

do not enroll in our trials at the rate we expect, including as a result of COVID-19 pandemic;

actions, such as those enacted during the ongoing COVID-19 pandemic, that limit the general populations movement;

regulators may ask to increase subject’s population in the clinical trials;

experience an unacceptable rate or severity of adverse side effects;

● Third-party

clinical investigators do not perform our clinical trials on our anticipated schedule

or consistent with the clinical trial protocol, GCP and regulatory requirements, or other

third parties do not perform data collection and analysis in a timely or accurate manner;

● Third-party

clinical investigators do not perform our clinical trials on our anticipated schedule

or consistent with the clinical trial protocol, GCP and regulatory requirements, or other

third parties do not perform data collection and analysis in a timely or accurate manner;

● Third party clinical

investigators and other related vendors do not perform our clinical trials on our anticipated schedule or consistent with the

clinical trial protocol, GCP and regulatory requirements, or other third parties do not perform data collection and analysis in a

timely or accurate manner;

● Third party clinical

investigators and other related vendors may declare bankruptcy or terminate their business unexpectedly, which most likely will

result in further delays in our clinical trials’ anticipated schedule and cause additional expenditures;

● Inspections

of clinical trial sites by the FDA, EMA, MOH and other regulatory authorities find regulatory

violations that require us to undertake corrective action, suspend or terminate one or

more sites, or prohibit us from using some or all of the data in support of our marketing

of clinical trial sites by the FDA, EMA, MOH and other regulatory authorities find regulatory violations that require us to undertake

corrective action, suspend or terminate one or more sites, or prohibit us from using some or all of the data in support of our marketing

applications;

or more IRBs suspends or terminates the trial at an investigational site, precludes enrollment

of additional subjects, or withdraws its approval of the trial.

development costs will increase if we have material delays in our clinical trials, or if we are required to modify, suspend, terminate

or repeat a clinical trial.

If we are unable to conduct our clinical trials properly and on schedule, marketing approval may be

delayed or denied by the FDA, EMA, MOH and other regulatory authorities.

results of our clinical trials may not support our product candidates claims or any additional claims we may seek for our product

candidates and our clinical trials may result in the discovery of adverse side effects.

if any clinical trial that we need to undertake is completed as planned, or if interim results from existing clinical trials are

released, we cannot be certain that such results will support our product candidates claims or any new indications that we may

seek for our products or that the FDA or foreign authorities will agree with our conclusions regarding the results of those trials.

The clinical trial process may fail to demonstrate that our products or a product candidate is safe and effective for the proposed

indicated use, which could cause us to stop seeking additional clearances or approvals for our product candidates.

termination of our clinical trials will delay the filing of our regulatory submissions and, ultimately, our ability to commercialize

a product candidate.

It is also possible that patients enrolled in clinical trials will experience adverse side effects that are

not currently part of the product candidate’s profile.

If our processing and storage facility or our clinical manufacturing facilities are damaged or destroyed, our business and prospects

would be adversely affected.

our processing and storage facility, our clinical manufacturing facilities or the equipment in such facilities were to be damaged

or destroyed, the loss of some or all of the stored units of our cell therapy drug candidates would force us to delay or halt

our clinical trial processes.

We have one clinical manufacturing facilities located in Haifa, Israel.

If these facilities

or the equipment in them are significantly damaged or destroyed, we may not be able to quickly or inexpensively replace our manufacturing

we encounter problems or delays in the research and development of our potential cell therapy products, we may not be able to

raise sufficient capital to finance our operations during the period required to resolve such problems or delays.

cell therapy products are currently in the development stage and we anticipate that we will continue to incur substantial operating

expenses and incur net losses until we have successfully completed all necessary research and clinical trials.

We, and any of

our potential collaborators, may encounter problems and delays relating to research and development, regulatory approval and intellectual

property rights of our technology.

Our research and development programs may not be successful, and our cell culture technology

may not facilitate the production of cells outside the human body with the expected result.

Our cell therapy products may not

prove to be safe and efficacious in clinical trials.

If any of these events occur, we may not have adequate resources to continue

operations for the period required to resolve the issue delaying commercialization and we may not be able to raise capital to

finance our continued operation during the period required for resolution of that issue.

Accordingly, we may be forced to discontinue

or suspend our operations.

may not be able to secure and maintain research institutions to conduct our clinical trials.

rely on research institutions to conduct our clinical trials.

Specifically, the limited number of centers experienced with cell

therapy product candidates heightens our dependence on such research institutions.

Our reliance upon research institutions, including

hospitals and clinics, provides us with less control over the timing and cost of clinical trials and the ability to recruit subjects.

If we are unable to reach agreements with suitable research institutions on acceptable terms, or if any resulting agreement is

terminated, we may be unable to quickly replace the research institution with another qualified institution on acceptable terms.

We may not be able to secure and maintain suitable research institutions to conduct our clinical trials.

product development programs are based on novel technologies and are inherently risky.

are subject to the risks of failure inherent in the development of products based on new technologies.

The novel nature of our

therapeutics creates significant challenges in regards to product development and optimization, manufacturing, government regulation,

third-party reimbursement and market acceptance.

For example, the FDA, the EMA and other countries’

regulatory authorities

have relatively limited experience with cell therapies.

Very few cell therapy products have been approved by regulatory authorities

to date for commercial sale, and the pathway to regulatory approval for our cell therapy product candidates may accordingly be

more complex and lengthy.

As a result, the development and commercialization pathway for our therapies may be subject to increased

uncertainty, as compared to the pathway for new conventional drugs.

are very few drugs and limited therapies that the FDA or EMA and other regulatory authorities have approved as treatments for

some of the disease indications we are pursuing.

This could complicate and delay FDA, EMA or other countries’

authorities approval of our biologic drug candidates.

are very few drugs and limited therapies currently approved for treatment of CLI, IC, ARS, muscle recovery following surgery for

hip fracture or HCT.

As a result, the clinical efficacy endpoints, or the criteria to measure the intended results of treatment

may be difficult to determine.

Despite our eligibility for certain accelerated pathways, this could increase the difficulty of

our obtaining FDA, EMA or other countries’

regulatory authorities’

approval to market our products.

cell therapy drug candidates represent new classes of therapy that the marketplace may not understand or accept.

if we successfully develop and obtain regulatory approval for our cell therapy candidates, the market may not understand or accept

We are developing cell therapy product candidates that represent novel treatments and will compete with a number of more

conventional products and therapies manufactured and marketed by others, including major pharmaceutical companies.

of market acceptance of any of our developed and potential products will depend on a number of factors, including:

clinical safety and effectiveness of our cell therapy drug candidates and their perceived

advantage over alternative treatment methods, if any;

events involving our cell therapy product candidates or the products or product candidates

of others that are cell-based;

cost of our products and the reimbursement policies of government and private third-party

the health care community does not accept our potential products for any of the foregoing reasons, or for any other reason, it

could affect our sales, having a material adverse effect on our business, financial condition and results of operations.

clinical manufacturing process for cell therapy products is complex and requires meeting high regulatory standards.

or problem in the clinical manufacturing of PLX may result in a material adverse effect on our business.

manufacturing process, controls, equipment and quality system for PLX-PAD have received approval from the FDA, EMA, Germany’s

PEI, the Korean MFDS and the PMDA.

However, the clinical manufacturing process is complex and we have no experience in manufacturing

our product candidates at a commercial level.

can be no guarantee that we will be able to successfully develop and manufacture our product candidates in a manner that is cost-effective

or commercially viable, or that our development and manufacturing capabilities might not take much longer than currently anticipated

to be ready for the market.

In addition, if we fail to maintain regulatory approvals for our manufacturing facilities, we may

suffer delays in our ability to manufacture our product candidates.

This may result in a material adverse effect on our business.

we received grants from the IIA we are subject to on-going restrictions.

have received royalty-bearing grants from the IIA, for research and development programs that meet specified criteria.

of the IIA’s grants limit our ability to transfer know-how developed under an approved research and development program

outside of Israel, regardless of whether the royalties are fully paid.

Any non-Israeli citizen, resident or entity that, among

other things, becomes a holder of 5% or more of our share capital or voting rights, is entitled to appoint one or more of our

directors or our Chief Executive Officer, or CEO, serves as a director of our Company or as our CEO is generally required to notify

the same to the IIA and to undertake to observe the law governing the grant programs of the IIA, the principal restrictions of

which are the transferability limits described above.

For more information, see “Item 7.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations - Liquidity and Capital Resources”.

have limited operating history, which raises doubts with respect to our ability to generate revenues in the future.

have a limited operating history in our business of commercializing cell production technology.

Until we entered into the United

Agreement, which was terminated in December 2015, we did not generate any revenues.

While we generated minimal revenue for the

year ended June 30, 2019 and 2020, it is not clear when we will generate additional revenues or whether we will experience further

delays in recognizing revenues such as if we experienced a clinical hold.

Our primary source of funds has been the sale of our

common stock and government grants.

We cannot give assurances that we will be able to generate any significant revenues or income

in the future.

There is no assurance that we will ever be profitable.

we do not keep pace with our competitors and with technological and market changes, our technology and products may become obsolete

and our business may suffer.

cellular therapeutics industry, of which we are a part, is very competitive and is subject to technological changes that can be

rapid and intense.

We have faced, and will continue to face, intense competition from biotechnology, pharmaceutical and biopharmaceutical

companies, academic and research institutions and governmental agencies engaged in cellular therapeutic and drug discovery activities

or funding, both in the United States and internationally.

Some of these competitors are pursuing the development of cellular

therapeutics, drugs and other therapies that target the same diseases and conditions that we target in our clinical and pre-clinical

of our competitors have greater resources, more product candidates and have developed product candidates and processes that directly

compete with our products.

Our competitors may have developed, or could develop in the future, new products that compete with

our products or even render our products obsolete.

depend to a significant extent on certain key personnel, the loss of any of whom may materially and adversely affect our Company.

success depends to a significant extent on the continued services of certain highly qualified scientific and management personnel,

in particular, Zami Aberman, our Executive Chairman, and Yaky Yanay, our CEO and President.

We face competition for qualified

personnel from numerous industry sources, and there can be no assurance that we will be able to attract and retain qualified personnel

on acceptable terms.

loss of service of any of our key personnel could have a material adverse effect on our operations or financial condition.

the event of the loss of services of such personnel, no assurance can be given that we will be able to obtain the services of

adequate replacement personnel.

We do not maintain key person insurance on the lives of any of our officers or employees.

market for our products will be heavily dependent on third party reimbursement policies.

ability to successfully commercialize our product candidates will depend on the extent to which government healthcare programs,

as well as private health insurers, health maintenance organizations and other third party payers will pay for our products and

related treatments.

Reimbursement

by third party payers depends on a number of factors, including the payer’s determination that use of the product is safe

and effective, not experimental or investigational, medically necessary, appropriate for the specific patient and cost-effective.

Reimbursement

in the United States or foreign countries may not be available or maintained for any of our product candidates.

not obtain approvals for adequate third party reimbursements, we may not be able to establish or maintain price levels sufficient

to realize an appropriate return on our investment in product development.

Any limits on reimbursement from third party

payers may reduce the demand for, or negatively affect the price of, our products.

The lack of reimbursement for these procedures

by insurance payers has negatively affected the market for our products in this indication in the past.

and reducing health care costs has been a general concern of federal and state governments in the United States and of foreign

In addition, third party payers are increasingly challenging the price and cost-effectiveness of medical products

and services, and many limit reimbursement for newly approved health care products.

In particular, third party payers may

limit the indications for which they will reimburse patients who use any products that we may develop.

Cost control initiatives

could decrease the price for products that we may develop, which would result in lower product revenues to us.

success depends in large part on our ability to develop and protect our technology and our cell therapy products.

If our patents

and proprietary rights agreements do not provide sufficient protection for our technology and our cell therapy products, our business

and competitive position will suffer.

success will also depend in part on our ability to develop our technology and commercialize cell therapy products without infringing

the proprietary rights of others.

We have not conducted full freedom of use patent searches and no assurance can be given that

patents do not exist or could not be filed which would have an adverse effect on our ability to develop our technology or maintain

our competitive position with respect to our potential cell therapy products.

If our technology components, devices, designs,

products, processes or other subject matter are claimed under other existing United States or foreign patents or are otherwise

protected by third party proprietary rights, we may be subject to infringement actions.

In such event, we may challenge the validity

of such patents or other proprietary rights or we may be required to obtain licenses from such companies in order to develop,

manufacture or market our technology or products.

There can be no assurances that we would be able to obtain such licenses or

that such licenses, if available, could be obtained on commercially reasonable terms.

Furthermore, the failure to either develop

a commercially viable alternative or obtain such licenses could result in delays in marketing our proposed products or the inability

to proceed with the development, manufacture or sale of products requiring such licenses, which could have a material adverse

effect on our business, financial condition and results of operations.

If we are required to defend ourselves against charges

of patent infringement or to protect our proprietary rights against third parties, substantial costs will be incurred regardless

of whether we are successful.

or more IRBs suspends or terminates the trial at an investigational site, precludes enrollment of additional subjects, or withdraws its

approval of the trial.

Our development costs will

increase if we have material delays in our clinical trials, or if we are required to modify, suspend, terminate or repeat a clinical trial.

If we are unable to conduct our clinical trials properly and on schedule, marketing approval may be delayed or denied by the FDA, EMA,

MOH and other regulatory authorities.

The results of our clinical trials may not

support our product candidates’ claims or any additional claims we may seek for our product candidates and our clinical trials may

result in the discovery of adverse side effects.

Even if any clinical trial

that we need to undertake is completed as planned, or if interim results from existing clinical trials are released, we cannot be certain

that such results will support our product candidates claims or any new indications that we may seek for our products or that the FDA

or foreign authorities will agree with our conclusions regarding the results of those trials.

The clinical trial process may fail to demonstrate

that our products or a product candidate is safe and effective for the proposed indicated use, which could cause us to stop seeking additional

clearances or approvals for our product candidates.

Any delay or termination of our clinical trials will delay the filing of our regulatory

submissions and, ultimately, our ability to commercialize a product candidate.

It is also possible that patients enrolled in clinical

trials will experience adverse side effects that are not currently part of the product candidate’s profile.

If our processing and storage facilities or our clinical

manufacturing facilities are damaged or destroyed, our business and prospects would be adversely affected.

If our processing and storage

facilities, our clinical manufacturing facility or the equipment in such facilities were to be damaged or destroyed, the loss of some

or all of the stored units of our cell therapy drug candidates would force us to delay or halt our clinical trial processes.

have one clinical manufacturing facility located in Haifa, Israel.

If these facilities or the equipment in them are significantly damaged

or destroyed, we may not be able to quickly or inexpensively replace our manufacturing capacity.

Favorable results from compassionate use

treatment or initial interim results from a clinical trial do not ensure that later clinical trials will be successful and success in

early stage clinical trials does not ensure success in later-stage clinical trials.

PLX cells have been administered

as part of compassionate use treatments, which permit the administration of the PLX cells outside of clinical trials.

No assurance can

be given that any positive results are attributable to the PLX cells, or that administration of PLX cells to other patients will have

positive results.

Compassionate use is a term that is used to refer to the use of an investigational drug outside of a clinical trial

to treat a patient with a serious or immediately life-threatening disease or condition who has no comparable or satisfactory alternative

treatment options.

Regulators often allow compassionate use on a case-by-case basis for an individual patient or for defined groups of

patients with similar treatment needs.

There is no assurance that

we will obtain regulatory approval for PLX cells.

We will only obtain regulatory approval to commercialize a product candidate if we can

demonstrate to the satisfaction of the FDA, the EMA or other applicable regulatory authorities, in well-designed and conducted clinical

trials, that the product candidate is safe and effective and that the product candidate, including the cell production methodology, otherwise

meets the appropriate standards required for approval.

Clinical trials can be lengthy, complex and extremely expensive processes with

uncertain results.

A failure of one or more clinical trials may occur at any stage of testing.

Success in early clinical

trials does not ensure that later clinical trials will be successful, and initial results from a clinical trial do not necessarily predict

final results.

While results from treating patients through compassionate use have in certain cases been successful, we cannot be assured

that further trials will ultimately be successful.

Results of further clinical trials may be disappointing.

Even if early stage clinical

trials are successful, we may need to conduct additional clinical trials for product candidates with patients receiving the drug for longer

periods before we are able to seek approvals to market and sell these product candidates from the FDA and regulatory authorities outside

the United States.

Even if we are able to obtain approval for our product candidates through an accelerated approval review program, we

may still be required to conduct clinical trials after such an approval.

If we are not successful in commercializing any of our lead product

candidates, or are significantly delayed in doing so, our business will be materially harmed.

We may not be able to secure and maintain research institutions

to conduct our clinical trials.

We rely on research institutions

to conduct our clinical trials.

Specifically, the limited number of centers experienced with cell therapy product candidates heightens

our dependence on such research institutions.

Our reliance upon research institutions, including hospitals and clinics, provides us with

less control over the timing and cost of clinical trials and the ability to recruit subjects.

If we are unable to reach agreements with

suitable research institutions on acceptable terms, or if any resulting agreement is terminated, we may be unable to quickly replace the

research institution with another qualified institution on acceptable terms.

We may not be able to secure and maintain suitable research

institutions to conduct our clinical trials.

Our product 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 therapeutics creates

significant challenges in regard to product development and optimization, manufacturing, government regulation, third party

reimbursement and market acceptance.

For example, the FDA, the EMA and other countries’ regulatory authorities have relatively

limited experience with cell therapies.

Very few cell therapy products have been approved by regulatory authorities to date for

commercial sale, and the pathway to regulatory approval for our cell therapy product candidates may accordingly be more complex and

As a result, the development and commercialization pathway for our therapies may be subject to increased uncertainty, as

compared to the pathway for new conventional drugs.

There are very few drugs and limited therapies

that the FDA or EMA and other regulatory authorities have approved as treatments for some of the disease indications we are pursuing.

This could complicate and delay FDA, EMA or other countries’ regulatory authorities’ approval of our biologic drug candidates.

There are very few drugs and

limited therapies currently approved for the treatment of COVID-19, IC, ARS, muscle recovery following surgery for hip fracture or HCT.

As a result, the clinical efficacy endpoints, or the criteria to measure the intended results of treatment may be difficult to determine.

Despite our eligibility for certain accelerated pathways, this could increase the difficulty of our obtaining FDA, EMA or other countries’

regulatory authorities’ approval to market our products.

Our cell therapy drug candidates represent

new classes of therapy that the marketplace may not understand or accept.

Even if we successfully develop

and obtain regulatory approval for our cell therapy candidates, the market may not understand or accept them.

We are developing cell therapy

product candidates that represent novel treatments and will compete with a number of more conventional products and therapies manufactured

and marketed by others, including major pharmaceutical companies.

The degree of market acceptance of any of our developed and potential

products will depend on a number of factors, including:

clinical safety and effectiveness of our cell therapy drug candidates and their perceived advantage over alternative treatment methods,

events involving our cell therapy product candidates or the products or product candidates of others that are cell-based;

cost of our products and the reimbursement policies of government and private third party payers.

If the health care community

does not accept our potential products for any of the foregoing reasons, or for any other reason, it could affect our sales, having a

material adverse effect on our business, financial condition and results of operations.

We have limited experience in conducting

Phase III trials.

If we fail in the conduct of such trials, our business will be materially harmed.

Even though we have conducted

Phase I, Phase II and Phase III trials, and we are currently conducting one Phase III trial for our PLX-PAD product candidate, two Phase

II studies of PLX cells for the treatment of severe COVID-19 complicated by ARDS, and a Phase I study for our PLX-R18 product, and have

recruited employees who are experienced in managing and conducting clinical trials, we have limited experience in this area.

We will need to expand our experience and

rely on consultants in order to obtain regulatory approvals for our therapeutic product candidates.

The failure to successfully conduct

clinical trials could materially harm our business.

Interim, “top-line,” and

preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available

or as additional analyses are conducted, and as the data are subject to audit and verification procedures, that could result in material

changes in the final data.

From time to time, we may publish interim, “top-line,” or

preliminary data from our clinical studies.

Interim data from clinical trials that we may complete are subject to the risk that one or

more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.

or “top-line” data also remain subject to audit and verification procedures that may result in the final data being

materially different from the preliminary data we previously published.

As a result, interim and preliminary data should be viewed with

caution until the final data are available.

Material adverse changes between preliminary, “top-line,” or interim

data and final data could significantly harm our business prospects.

Risk Related to Commercialization of Our Product

We may not successfully maintain our existing

exclusive out-licensing agreement with CHA, or establish new collaborative and licensing arrangements, which could adversely affect our

ability to develop and commercialize our product candidates.

One of the elements of our

business strategy is to license our technology to other companies.

Our business strategy includes establishing collaborations and licensing

agreements with one or more pharmaceutical or biotechnology companies.

To date, we have a strategic partnership with CHA for both the

IC and CLI indications in Korea.

Notwithstanding, we may not be able to further establish or maintain such licensing and collaboration

arrangements necessary to develop and commercialize our product candidates.

Even if we are able to maintain

or establish licensing or collaboration arrangements, these arrangements may not be on favorable terms and may contain provisions that

will restrict our ability to develop, test and market our product candidates.

Any failure to maintain or establish licensing or collaboration

arrangements on favorable terms could adversely affect our business prospects, financial condition or ability to develop and commercialize

our product candidates.

Our agreements with our collaborators

and licensees may have provisions that give rise to disputes regarding the rights and obligations of the parties.

These and other possible

disagreements could lead to termination of the agreement or delays in collaborative research, development, supply, or commercialization

of certain product candidates, or could require or result in litigation or arbitration.

Moreover, disagreements could arise with our collaborators

over rights to intellectual property or our rights to share in any of the future revenues of products developed by our collaborators.

These kinds of disagreements could result in costly and time-consuming litigation.

Any such conflicts with our collaborators could reduce

our ability to obtain future collaboration agreements and could have a negative impact on our relationship with existing collaborators.

The market for our products will be heavily dependent on third

party reimbursement policies.

Our ability to successfully

commercialize our product candidates will depend on the extent to which government healthcare programs, as well as private health insurers,

health maintenance organizations and other third party payers will pay for our products and related treatments.

Reimbursement by third party payers depends on

a number of factors, including the payer’s determination that use of the product is safe and effective, not experimental or investigational,

medically necessary, appropriate for the specific patient and cost-effective.

Reimbursement in the United States or foreign

countries may not be available or maintained for any of our product candidates.

If we do not obtain approvals for adequate third

party reimbursements, we may not be able to establish or maintain price levels sufficient to realize an appropriate return on our investment

in product development.

Any limits on reimbursement from third party payers may reduce the demand for, or negatively affect the

price of, our products.

The lack of reimbursement for these procedures by insurance payers has negatively affected the market for

our products in this indication in the past.

Managing and reducing health

care costs has been a general concern of federal and state governments in the United States and of foreign governments.

third party payers are increasingly challenging the price and cost-effectiveness of medical products and services, and many limit reimbursement

for newly approved health care products.

In particular, third party payers may limit the indications for which they will reimburse

patients who use any products that we may develop.

Cost control initiatives could decrease the price for products that we may develop,

which would result in lower product revenues to us.

Risk Related to Intellectual Property

Our success depends in large part on our

ability to develop and protect our technology and our cell therapy products.

If our patents and proprietary rights agreements do not provide

sufficient protection for our technology and our cell therapy products, our business and competitive position will suffer.

Our success will also depend

in part on our ability to develop our technology and commercialize cell therapy products without infringing the proprietary rights of

We have not conducted full freedom of use patent searches and no assurance can be given that patents do not exist or could not

be filed which would have an adverse effect on our ability to develop our technology or maintain our competitive position with respect

to our potential cell therapy products.

If our technology components, devices, designs, products, processes or other subject matter are

claimed under other existing United States or foreign patents or are otherwise protected by third party proprietary rights, we may be

subject to infringement actions.

In such event, we may challenge the validity of such patents or other proprietary rights or we may be

required to obtain licenses from such companies in order to develop, manufacture or market our technology or products.

There can be no

assurances that we would be able to obtain such licenses or that such licenses, if available, could be obtained on commercially reasonable

Furthermore, the failure to either develop a commercially viable alternative or obtain such licenses could result in delays in

marketing our proposed products or the inability to proceed with the development, manufacture or sale of products requiring such licenses,

which could have a material adverse effect on our business, financial condition and results of operations.

If we are required to defend

ourselves against charges of patent infringement or to protect our proprietary rights against third parties, substantial costs will be

incurred regardless of whether we are successful.

Such proceedings are typically protracted with no certainty of success.

An adverse outcome could

subject us to significant liabilities to third parties and force us to curtail or cease our development of our technology and

the commercialization our potential cell therapy products.

have built the ability to manufacture clinical grade ASCs in-house.

Through our experience with ASC-based product development,

An adverse outcome

could subject us to significant liabilities to third parties and force us to curtail or cease our development of our technology and the

commercialization our potential cell therapy products.

We have built the ability

to manufacture clinical grade adherent stromal cells in-house.

Through our experience with adherent stromal cell-based product development,

we have developed expertise and know-how in this field.

2 unchanged sentences

These agreements generally provide for protection

of confidential information, restrictions on the use of materials and assignment of inventions conceived during the course of

performance for us.

of confidential information, restrictions on the use of materials and assignment of inventions conceived during the course of performance

These agreements might not effectively prevent disclosure of our confidential information.

price of our common stock may fluctuate significantly.

market for our shares of common stock may fluctuate significantly.

A number of events and factors may have an adverse impact on

the market price of our common stock, such as:

of our clinical trials or adverse events associated with our products;

amount of our cash resources and our ability to obtain additional funding;

in our revenues, expense levels or operating results;

into or terminating strategic relationships;

● announcements

of technical or product developments by us or our competitors;

conditions for pharmaceutical and biotechnology stocks in particular;

in laws and governmental regulations, including changes in tax, healthcare, competition

and patent laws;

concerning patents or proprietary rights;

accounting pronouncements or regulatory rulings;

announcements regarding medical advances in the treatment of the disease states that

we are targeting;

or proprietary rights developments;

actions that may impact our products;

sales of our common stock, or the perception of such sales;

● disruptions

in our manufacturing processes;

● competition.

addition, a global pandemic, such as the COVID-19 pandemic and a market downturn in general and/or in the biopharmaceutical sector

in particular, may adversely affect the market price of our securities, which may not necessarily reflect the actual or perceived

value of our Company.

sales of our common stock may cause dilution.

sales of our common stock, or the perception that such sales may occur, could cause immediate dilution and adversely affect the

market price of our common stock.

If we raise additional capital by issuing equity securities, the percentage ownership of our

existing stockholders may be reduced, and accordingly these stockholders may experience substantial dilution.

We may also issue

equity securities that provide for rights, preferences and privileges senior to those of our common stock.

Given our need for

cash and that equity raising is the most common type of fundraising for companies like ours, the risk of dilution is particularly

significant for stockholders of our company.

Third parties may initiate legal proceedings

alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material

adverse effect on 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 the proprietary rights of third parties.

We have yet to conduct comprehensive freedom-to-operate searches

to determine whether our proposed business activities or use of certain of the patent rights owned by us would infringe patents issued

to third parties.

We may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property

rights with respect to our products and technology, including interference proceedings before the U.S.

Patent and Trademark Office.

parties may assert infringement claims against us based on existing patents or patents that may be granted in the future.

If we are found

to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue

developing and marketing our products and technology.

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 access to the same technologies licensed to us.

We could be forced,

including by court order, to cease commercializing the infringing technology or product.

In addition, we could be found liable for monetary

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.

For example, we are aware of issued third party patents directed to placental stem

cells and their use for therapy and in treating various diseases.

We may need to seek a license for one or more of these patents.

No assurances

can be given that such a license will be available on commercially reasonable terms, if at all.

Claims that we have misappropriated the

confidential information or trade secrets of third parties could have a similar negative impact on our business.

Even if resolved in our favor,

litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract

our technical and management personnel from their normal responsibilities.

In addition, there could be public announcements of the results

of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be

negative, it could have a substantial adverse effect on the price of our common shares.

Such litigation or proceedings could substantially

increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution

We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings.

competitors are able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material

adverse effect on our ability to compete in the marketplace.

We must further protect and develop our technology and products

in order to become a profitable company.

If we do not complete the

development of our technology and products by the time our patents expire and create additional sufficient layers of patents or other

intellectual property rights, other companies may use the technology to develop competing products.

If this happens, we may lose our competitive

position and our business would likely suffer.

Furthermore, the scope of

our patents may not be sufficiently broad to offer meaningful protection.

In addition, our patents could be successfully challenged, invalidated

or circumvented so that our patent rights would not create an effective competitive barrier.

We also intend to seek patent protection

for any of our potential cell therapy products once we have completed their development.

We also rely on trade secrets and un-patentable

know-how that we seek to protect, in part, by confidentiality agreements with our employees, consultants, suppliers and licensees.

agreements may be breached, and we might not have adequate remedies for any breach.

If this were to occur, our business and competitive

position would likely suffer.

The patent approval process is complex,

and we cannot be sure that our pending patent applications or future patent applications will be approved.

The patent position of biotechnology

and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been

the subject of much litigation.

As a result, the issuance, scope, validity, enforceability and commercial value of our and any future

licensors’ patent rights are highly uncertain.

Our pending and future patent applications may not result in patents being issued

which protect our technology or products or which effectively prevent others from commercializing competitive technologies and products.

Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value

of our patents or narrow the scope of our patent protection.

The laws of foreign countries may not protect our rights to the same extent

as the laws of the United States and we may not be able to obtain meaningful patent protection for any of our commercial products either

in or outside the United States.

No assurance can be given

that the scope of any patent protection granted will exclude competitors or provide us with competitive advantages, that any of the patents

that have been or may be issued to us will be held valid if subsequently challenged, or that other parties will not claim rights to or

ownership of our patents or other proprietary rights that we hold.

Furthermore, there can be no assurance that others have not developed

or will not develop similar products, duplicate any of our technology or products or design around any patents that have been or may be

issued to us or any future licensors.

Since patent applications in the United States and in Europe are not publicly disclosed until patents

are issued, there can be no assurance that others did not first file applications for products covered by our pending patent applications,

nor can we be certain that we will not infringe any patents that may be issued to others.

Risk Related to Our Common

The price of our common shares may fluctuate significantly.

The market for our common

shares may fluctuate significantly.

A number of events and factors may have an adverse impact on the market price of our common shares,

results of our clinical trials or adverse events associated with our products;

the amount of our cash resources and our ability to obtain additional funding;

changes in our revenues, expense levels or operating results;

entering into or terminating strategic relationships;

announcements of technical or product developments by us or our competitors;

market conditions for pharmaceutical and biotechnology shares in particular;

changes in laws and governmental regulations, including changes in tax, healthcare, competition and patent laws;

disputes concerning patents or proprietary rights;

new accounting pronouncements or regulatory rulings;

public announcements regarding medical advances in the treatment of the disease states that we are targeting;

patent or proprietary rights developments;

regulatory actions that may impact our products;

future sales of our common shares, or the perception of such sales;

disruptions in our manufacturing processes;

In addition, a global pandemic,

such as the COVID-19 pandemic and a market downturn in general and/or in the biopharmaceutical sector in particular, may adversely affect

the market price of our securities, which may not necessarily reflect the actual or perceived value of our Company.

Future sales of our common shares may cause dilution.

Future sales of our common

shares, or the perception that such sales may occur, could cause immediate dilution and adversely affect the market price of our common

If we raise additional capital by issuing equity securities, the percentage ownership of our existing shareholders may be reduced,

and accordingly these shareholders may experience substantial dilution.

We may also issue equity securities that provide for rights, preferences

and privileges senior to those of our common shares.

Given our need for cash and that equity raising is the most common type of fundraising

for companies like ours, the risk of dilution is particularly significant for shareholders of our company.

Risks Related to Foreign Exchange Rates

We are exposed to fluctuations in currency exchange rates.

significant portion of our business is conducted outside the United States.

Therefore, we are exposed to currency exchange fluctuations

in other currencies such as the New Israeli Shekel, or NIS, and the Euro, because a portion of our expenses in Israel and Europe

are paid in NIS and Euros, respectively, which subjects us to the risks of foreign currency fluctuations.

Our primary expenses

paid in NIS are employee salaries, subcontractors and material suppliers, fees for consultants and lease payments on our facilities.

During the year ended June 30, 2020, or the fiscal year 2020, we entered into options contracts to hedge against some of the risk

of changes in future cash flows from payments of payroll and related expenses and costs of operations denominated in NIS.

dollar cost of our operations in Israel will increase to the extent increases in the rate of inflation in Israel are not offset

by a devaluation of the NIS in relation to the dollar, which would harm our results of operations.

a considerable portion of our expenses such as employees’

salaries are linked to an extent to the rate of inflation in Israel,

the dollar cost of our operations is influenced by the extent to which any increase in the rate of inflation in Israel is or is

not offset by the devaluation of the NIS in relation to the dollar.

As a result, we are exposed to the risk that the NIS, after

adjustment for inflation in Israel, will appreciate in relation to the dollar.

In that event, the dollar cost of our operations

in Israel will increase and our dollar-measured results of operations will be adversely affected.

We cannot predict whether the

NIS will appreciate against the dollar or vice versa in the future.

Any increase in the rate of inflation in Israel, unless the

increase is offset on a timely basis by a devaluation of the NIS in relation to the dollar, will increase labor and other costs,

which will increase the dollar cost of our operations in Israel and harm our results of operations.

product liability claims could adversely affect our future earnings and financial condition.

face an inherent business risk of exposure to product liability claims in the event that the use of our products results in adverse

We may not be able to maintain adequate levels of insurance for these liabilities at reasonable cost and/or reasonable

Excessive insurance costs or uninsured claims would add to our future operating expenses and adversely affect our financial

principal research and development and manufacturing facilities are located in Israel and the unstable military and political

conditions of Israel may cause interruption or suspension of our business operations without warning.

principal research and development and manufacturing facilities are located in Israel.

As a result, we are directly influenced

by the political, economic and military conditions affecting Israel.

Since the establishment of the State of Israel in 1948, a

number of armed conflicts have taken place between Israel and its Arab neighbors.

During July and August 2014 and November 2012,

Israel was engaged in an armed conflict with a militia group and political party which controls the Gaza Strip, and during the

summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group and political

These conflicts involved missile strikes against civilian targets in various parts of Israel, including areas in which

our employees and some of our consultants are located, and negatively affected business conditions in Israel.

addition, Israeli-based companies and companies doing business with Israel, have been the subject of an economic boycott by members

of the Arab League and certain other predominantly Muslim countries since Israel’s establishment.

Although Israel has entered

into various agreements with certain Arab countries and the Palestinian Authority, and various declarations have been signed in

connection with efforts to resolve some of the economic and political problems in the Middle East, we cannot predict whether or

in what manner these problems will be resolved.

Wars and acts of terrorism have resulted in significant damage to the Israeli

economy, including reducing the level of foreign and local investment.

certain of our employees may be obligated to perform annual reserve duty in the Israel Defense Forces and are subject to being

called up for active military duty at any time.

All Israeli male citizens who have served in the army are subject to an obligation

to perform reserve duty until they are between 40 and 49 years old, depending upon the nature of their military service.

trend towards consolidation in the pharmaceutical and biotechnology industries may adversely affect us.

is a trend towards consolidation in the pharmaceutical and biotechnology industries.

This consolidation trend may result in the

remaining companies having greater financial resources and technical discovery capabilities, thus intensifying competition in

these industries.

This trend may also result in fewer potential collaborators or licensees for our therapeutic product candidates.

Also, if a consolidating company is already doing business with our competitors, we may lose existing licensees or collaborators

as a result of such consolidation.

This trend may adversely affect our ability to enter into license agreements or agreements

for the development and commercialization of our product candidates, and as a result may materially harm our business.

A significant portion of our

business is conducted outside the United States.

Therefore, we are exposed to currency exchange fluctuations in other currencies such

as the NIS and the Euro, because a significant portion of our expenses in Israel are paid in NIS, and we have also received €20 million

pursuant to the EIB Finance Agreement, all of which subjects us to the risks of foreign currency fluctuations.

Our primary expenses paid

in NIS are employee salaries, and lease payments on our facilities.

During the fiscal year ended June 30, 2021, or Fiscal Year 2021, we

entered into options contracts to hedge against some of the risk of changes in future cash flows from payments of payroll and related

expenses and costs of operations denominated in NIS.

The dollar cost of our operations in Israel

will increase to the extent increases in the rate of inflation in Israel are not offset by a devaluation of the NIS in relation to the

dollar, which would harm our results of operations.

Since a considerable portion

of our expenses such as employees’ salaries are linked to an extent to the rate of inflation in Israel, the dollar cost of our operations

is influenced by the extent to which any increase in the rate of inflation in Israel is or is not offset by the devaluation of the NIS

in relation to the dollar.

As a result, we are exposed to the risk that the NIS, after adjustment for inflation in Israel, will appreciate

in relation to the dollar.

In that event, the dollar cost of our operations in Israel will increase and our dollar-measured results of

operations will be adversely affected.

We cannot predict whether the NIS will appreciate against the dollar or vice versa in the future.

Any increase in the rate of inflation in Israel, unless the increase is offset on a timely basis by a devaluation of the NIS in relation

to the dollar, will increase labor and other costs, which will increase the dollar cost of our operations in Israel and harm our results

of operations.

The dollar cost of our loan from the EIB

will be subject to currency valuations of the U.S.

dollar and the Euro

Following the receipt of the

first tranche of the loan from the EIB, which was provided in Euros pursuant to the EIB Finance Agreement, we have established both a

cash asset and a liability in our financial statements.

If the Euro increases in value in relation to the U.S.

dollar, both the asset

and the liability of our loan from the EIB will increase, and if the Euro decreases in relation to the U.S.

dollar, both the asset and

liability will conversely decrease.

Since the tranche of the loan

received from the EIB and the accumulated interest are payable together in a single installment within five years from disbursement of

the tranche, and we are likely to use the cash received from the EIB to finance our operations, as time progress the cost basis of the

liability is expected to increase and the cash asset is expected to decrease.

Therefore, the effect of currency

fluctuations of the Euro in relation to the U.S.

dollar on the liability resulting from the loan from the EIB is expected to be greater

than the effect on the cash asset.

As part of our hedging strategy,

we may use currency transactions of options and forward contracts to minimize the risk of financial exposure from fluctuations in the

exchange rate of the U.S.

dollar against the Euro, but there are no guaranties that we will be able to offset some or all the losses if

the Euro inclines in value in relation to the U.S.

Our cash may be subject to a risk of loss

and we may be exposed to fluctuations in the market values of our portfolio investments and in interest rates.

assets include a significant component of cash and cash equivalents and bank deposits.

We adhere to an investment policy

set by our investment committee which aims to preserve our financial assets, maintain adequate liquidity and maximize returns.

We believe that our cash is held in institutions whose credit risk is minimal and that the value and liquidity of our deposits

are accurately reflected in our consolidated financial statements as of June 30, 2020.

Currently, we hold part of our current

assets in bank deposits.

However, nearly all of our cash and bank deposits are not insured by the Federal Deposit Insurance Corporation,

or the FDIC, or similar governmental deposit insurance outside the United States.

Therefore, our cash and any

bank deposits that we now hold or may acquire in the future may be subject to risks, including the risk of loss or of reduced

and we may be exposed to fluctuations in interest rates.

Our assets include a significant component of cash and cash equivalents

and bank deposits.

We adhere to an investment policy set by our investment committee which aims to preserve our financial assets,

maintain adequate liquidity and maximize returns.

We believe that our cash is held in institutions whose credit risk is minimal and that

the value and liquidity of our deposits are accurately reflected in our consolidated financial statements as of June 30, 2021.

we hold part of our cash assets in bank deposits.

However, nearly all of our cash and bank deposits are not insured by the Federal Deposit

Insurance Corporation, or the FDIC, or similar governmental deposit insurance outside the United States.

Therefore, our

cash and any bank deposits that we now hold or may acquire in the future may be subject to risks, including the risk of loss or of reduced

value or liquidity, particularly in light of the increased volatility and worldwide pressures in the financial and banking sectors.

our internal control over financial reporting was considered effective as of June 30, 2020, there is no assurance that our internal

control over financial reporting will continue to be effective in the future, which could result in our financial statements being

unreliable, government investigations or loss of investor confidence in our financial report.

to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to furnish an annual report by our management assessing the

effectiveness of our internal control over financial reporting.

This assessment must include disclosure of any material weaknesses

in our internal control over financial reporting identified by management.

Management’s report as of the end of fiscal year 2020

concluded that our internal control over financial reporting was effective.

There is, however, no assurance that we will be able

to maintain such effective internal control over financial reporting in the future.

Ineffective internal control over financial

reporting can result in errors or other problems in our financial statements.

In the future, if we or our registered independent

public accounting firm are unable to assert that our internal controls are effective, our investors could lose confidence in the

accuracy and completeness of our financial report, which in turn could cause our stock price to decline.

Failure to maintain effective

internal control over financial reporting could also result in investigation or sanctions by regulatory authorities.

most of our officers and directors are located in non-U.S.

jurisdictions, you may have no effective recourse against the management

for misconduct and may not be able to enforce judgment and civil liabilities against our officers, directors, experts and agents.

of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial

portion of their assets are located outside the United States.

a result, it may be difficult to enforce within the United States any judgments obtained against our officers or directors, including

judgments predicated upon the civil liability provisions of the securities laws of the United States or any U.S.

we do not intend to pay any dividends on our common stock, investors seeking dividend income should not purchase shares of our

common stock.

have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends

for the foreseeable future.

Investors seeking dividend income should not invest in our common stock.

are dependent upon third-party suppliers for raw materials needed to manufacture PLX;

if any of these third parties fails or is

unable to perform in a timely manner, our ability to manufacture and deliver will be compromised.

addition to the placenta used in the clinical manufacturing process of PLX, we require certain raw materials.

These items must

be manufactured and supplied to us in sufficient quantities and in compliance with current GMP.

To meet these requirements, we

have entered into supply agreements with firms that manufacture these raw materials to current GMP standards.

Our requirements

for these items are expected to increase if and when we transition to the manufacture of commercial quantities of our cell-based

drug candidates.

addition, as we proceed with our clinical trial efforts, we must be able to continuously demonstrate to the FDA, EMA and other

regulatory authorities that we can manufacture our cell therapy product candidates with consistent characteristics.

we are materially dependent on these suppliers for supply of current GMP-grade materials of consistent quality.

Our ability to

complete ongoing clinical trials may be negatively affected in the event that we are forced to seek and validate a replacement

source for any of these critical materials.

intend to decrease our dependency in third-party suppliers for raw materials.

To that effect we have developed a serum-free formulation

which is expected to support the manufacturing of cell therapy products.

This serum-free formulation was developed using our deep

understanding in cell therapy industrial scale production standards, and the quality methods designed to support implementation

in Phase III development and marketing.

Achieving this significant technological challenge is expected to provide us with large-scale,

highly consistent production with operational independency from third party suppliers for standard serum, an expensive and quantity

limited product.

There can be no guarantee that we will successfully implement the use of our serum-free formulation to support

the manufacturing of cell therapy products or any other future product candidates, if any, that we seek to produce using such

formulation, or that such implementation of the serum-free formulation will decrease our dependency on third-party suppliers for

raw materials.

rely and will rely on third parties to conduct our clinical trials.

If these third parties do not successfully carry out their

contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our product

depend and will depend upon independent investigators and collaborators, such as universities, medical institutions, CROs,

vendors and strategic partners to conduct our pre-clinical and clinical trials under agreements with us.

We negotiate budgets

and contracts with CROs, vendors and study sites which may result in delays to our development timelines and increased costs.

We rely heavily on these third parties over the course of our clinical trials, and we control only certain aspects of their

Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with applicable

protocol, legal, regulatory and scientific standards, and our reliance on third parties does not relieve us of our regulatory

responsibilities.

We and these third parties are required to comply with current good clinical practices, or cGCPs, which are

regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for product candidates in

clinical development.

Regulatory authorities enforce these cGCPs through periodic inspections of trial sponsors, principal

investigators and trial sites.

If we or any of these third parties fail to comply with applicable cGCP regulations, the

clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory

authorities may require us to perform additional clinical trials before approving our marketing applications.

assure that, upon inspection, such regulatory authorities will determine that any of our clinical trials comply with the cGCP

In addition, any Phase III clinical trials which we may conduct must be conducted with biologic product produced

under cGMP and may require a large number of test patients.

Biologic products for commercial purposes must also be produced

Our failure or any failure by these third parties to comply with these regulations or to recruit a sufficient

number of patients may require us to repeat clinical trials, which would delay the regulatory approval process.

Moreover, our

business may be implicated if any of these third parties violates federal or state fraud and abuse or false claims laws and

regulations or healthcare privacy and security laws and regulations.

third parties conducting our clinical trials are not and will not be our employees and, except for remedies available to us under

our agreements with such third parties, which in some instances may be limited, we cannot control whether or not they devote sufficient

time and resources to our ongoing pre-clinical, clinical and nonclinical programs.

These third parties may also have relationships

with other commercial entities, including our competitors, for whom they may also be conducting clinical trials

or other drug development activities, which could affect their performance on our behalf.

If these third parties do not

successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the

quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or

regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able

to complete development of, obtain regulatory approval of or successfully commercialize our product candidates.

As a result, our

financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability

to generate revenue could be delayed.

Switching or adding third parties to conduct our clinical trials involves substantial cost

and requires extensive management time and focus.

In addition, there is a natural transition period when a new third party commences

As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines.

may not be able to take advantage of the new regulatory pathways in the United States, Europe and Japan to shorten our time to

market our products.

pathways in United States, Europe and Japan may allow for early commercialization of our products and thereby reducing the time

to market our products.

FDA’s Fast Track designation is a process designed to facilitate the development and expedite the review of drugs to treat

serious conditions and unmet medical needs.

The FDA granted PLX-PAD with “Fast Track”

designation for the treatment

EAP allows the use of an investigational medical product outside of clinical trials and is usually granted in cases where patients

are unsuitable for inclusion under the study protocol and the patient’s condition is life-threatening with an unmet medical

The FDA has cleared PLX-PAD EAP, for the treatment of patients with CLI.

As part of the EAP, our PLX-PAD cell therapy will

be made available to a limited number of CLI patients in the United States who are unsuitable for revascularization and cannot

take part in our ongoing Phase III clinical trial .

In addition, the FDA has cleared

our EAP for the use of our PLX-PAD cells to treat ARDS caused by COVID-19 outside of our ongoing Phase II COVID-19 study in the

The EAP will include up to 100 patients with the resulting data being collected and evaluated alongside our existing clinical

trial in the U.S.

purpose of the EMA’s Adaptive Pathways Project is to shorten the time it takes for innovative medicines to reach patients

with serious conditions that lack adequate treatment options.

After a therapy is selected for the program, the discussion group

that oversees a given project entering into the EMA’s Adaptive Pathways Project conducts high level discussions and provides

guidance to the applicant regarding the formal regulatory processes that precede a trial targeting early approval and further

expansion of the indications.

The EMA selected our PLX-PAD cell program in CLI and in recovery following surgery for hip fracture

for its Adaptive Pathways Project.

Japan, a regulation regarding regenerative therapies, including cell therapies.

This regulation allows for conditional, time-limited

approval of products for marketing after limited proof of efficacy.

addition, the PMDA approved the proposed quality and large-scale manufacturing methods for PLX-PAD and has cleared our PLX-PAD

cells for use in clinical trials in Japan.

since these new regulatory pathways are relatively new, we may not be able to meet the regulatory requirements and as a result

would not benefit from early access to the market.

results from compassionate use treatment or initial interim results from a clinical trial do not ensure that later clinical trials

will be successful and success in early stage clinical trials does not ensure success in later-stage clinical trials.

cells have been administered as part of compassionate use treatments, which permit the administration of the PLX cells outside

of clinical trials.

No assurance can be given that any positive results are attributable to the PLX cells, or that administration

of PLX cells to other patients will have positive results.

Compassionate use is a term that is used to refer to the use of an

investigational drug outside of a clinical trial to treat a patient with a serious or immediately life-threatening disease or

condition who has no comparable or satisfactory alternative treatment options.

Regulators often allow compassionate use on a case-by-case

basis for an individual patient or for defined groups of patients with similar treatment needs.

is no assurance that we will obtain regulatory approval for PLX cells.

We will only obtain regulatory approval to commercialize

a product candidate if we can demonstrate to the satisfaction of the FDA, the EMA or other applicable regulatory authorities,

in well-designed and conducted clinical trials, that the product candidate is safe and effective and that the product candidate,

including the cell production methodology, otherwise meets the appropriate standards required for approval.

Clinical trials can

be lengthy, complex and extremely expensive processes with uncertain results.

A failure of one or more clinical trials may occur

at any stage of testing.

in early clinical trials does not ensure that later clinical trials will be successful, and initial results from a clinical trial

do not necessarily predict final results.

While results from treating patients through compassionate use have in certain cases

been successful, we cannot be assured that further trials will ultimately be successful.

Results of further clinical trials may

be disappointing.

if early stage clinical trials are successful, we may need to conduct additional clinical trials for product candidates with patients

receiving the drug for longer periods before we are able to seek approvals to market and sell these product candidates from the

FDA and regulatory authorities outside the United States.

Even if we are able to obtain approval for our product candidates through

an accelerated approval review program, we may still be required to conduct clinical trials after such an approval.

not successful in commercializing any of our lead product candidates, or are significantly delayed in doing so, our business will

be materially harmed.

may not successfully maintain our existing exclusive out-licensing agreement with CHA, or establish new collaborative and licensing

arrangements, which could adversely affect our ability to develop and commercialize our product candidates.

of the elements of our business strategy is to license our technology to other companies.

Our business strategy includes establishing

collaborations and licensing agreements with one or more pharmaceutical or biotechnology companies.

To date, we have a strategic

partnership with CHA for both the IC and CLI indications in Korea.

CHA will conduct PLX clinical trials

in South Korea, and, following approval, a joint venture equally owned by both parties will be established to market PLX

products in South Korea.

Our PLX cells are also being used in South Korean sites participating to our International IC study through

our partnership with CHA.

Notwithstanding, we may not be able to further establish or maintain such licensing and collaboration

arrangements necessary to develop and commercialize our product candidates.

if we are able to maintain or establish licensing or collaboration arrangements, these arrangements may not be on favorable terms

and may contain provisions that will restrict our ability to develop, test and market our product candidates.

Any failure to maintain

or establish licensing or collaboration arrangements on favorable terms could adversely affect our business prospects, financial

condition or ability to develop and commercialize our product candidates.

agreements with our collaborators and licensees may have provisions that give rise to disputes regarding the rights and obligations

of the parties.

These and other possible disagreements could lead to termination of the agreement or delays in collaborative research,

development, supply, or commercialization of certain product candidates, or could require or result in litigation or arbitration.

Moreover, disagreements could arise with our collaborators over rights to intellectual property or our rights to share in any

of the future revenues of products developed by our collaborators.

These kinds of disagreements could result in costly and time-consuming

Any such conflicts with our collaborators could reduce our ability to obtain future collaboration agreements and could

have a negative impact on our relationship with existing collaborators.

internal computer systems, or those used by our CROs or other contractors or consultants, may fail or suffer security breaches.

rely on and utilize services provided by third parties in connection with our clinical trials, which services involve the collection,

use, storage and analysis of personal health information.

While we receive assurances from these vendors that their services are

compliant with the Health Insurance Portability and Accountability Act, or HIPAA, and other applicable privacy laws, there can

be no assurance that such third parties will comply with applicable laws or regulations.

Non-compliance by such vendors may result

in liability for us which would have a material adverse effect on our business, financial conditions and results of operations.

the implementation of security measures, our internal computer systems and those of our current and future CROs and other contractors

and consultants are vulnerable to damage from computer viruses and unauthorized access.

While, to our knowledge, we have not experienced

any such material system failure or security breach to date, if such an event were to occur and cause interruptions in our operations,

it could result in a material disruption of our development programs and our business operations.

For example, the loss of clinical

trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly

increase our costs to recover or reproduce the data.

To the extent that any disruption or security breach were to result in a

loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could

incur liability and the further development and commercialization of our product candidates could be delayed.

compliance with certain European privacy regulations could have an adverse effect on our business and reputation.

collection and use of personal health data in the European Union is governed by the provisions of the General Data Protection

Regulation, or GDPR.

This directive imposes several requirements relating to the consent of the individuals to whom the personal

data relates, the information provided to the individuals, notification of data processing obligations to the competent national

data protection authorities and the security and confidentiality of the personal data.

The GPDR also extends the geographical

scope of European Union data protection law to non-European Union entities under certain conditions, tightens existing European

Union data protection principles and creates new obligations for companies and new rights for individuals.

Failure to comply with

the requirements of the GDPR and the related national data protection laws of the European Union Member States may result in fines

and other administrative penalties.

There may be circumstances under which a failure to comply with GDPR, or the exercise of individual

rights under the GDPR, would limit our ability to utilize clinical trial data collected on certain subjects.

The GDPR regulations

impose additional responsibility and liability in relation to personal data that we process and we intend to put in place additional

mechanisms ensuring compliance with these and/or new data protection rules.

to these European privacy regulations and unsuccessful compliance may be onerous and adversely affect our business, financial

condition, prospects, results of operations and reputation.

have limited experience in conducting Phase III trials.

If we fail in the conduct of such trials, our business will be materially

though we conducted Phase I and Phase II trials and we are currently conducting two Phase III trials for our PLX-PAD product candidate,

a Phase II FDA study of PLX cells for the treatment of severe COVID-19 complicated by ARDS, and a Phase I for our PLX-R18 product,

and have recruited employees who are experienced in managing and conducting clinical trials, we have limited experience in this

will need to expand our experience and rely on consultants in order to obtain regulatory approvals for our therapeutic product

The failure to successfully conduct clinical trials could materially harm our business.

government programs and tax benefits may be terminated.

have received certain Israeli government approvals under certain programs and may in the future utilize certain tax benefits in

Israel by virtue of these programs.

The COVID-19 pandemic, or any other pandemic,

epidemic or outbreak of an infectious disease, may materially and adversely affect our business and operations.

While COVID-19

is still spreading globally, and the final implications of the pandemic are difficult to estimate at this stage, it is clear that it has

affected the lives of a large portion of the global population.

At this time, the pandemic has caused states of emergency to be declared

in various countries, travel restrictions imposed globally, quarantines established in certain jurisdictions and various institutions

and companies being closed.

We are actively monitoring any developments regarding the pandemic and we are taking any necessary measures

to respond to the situation in cooperation with the various stakeholders.

COVID-19 infection

of our workforce could result in a temporary disruption in our business activities, including manufacturing and other functions.

on guidelines provided by the Israeli Government, we have increased as much as possible the capacity and arrangement for employees to

work remotely, and although the vast majority of our employees have been vaccinated and we have adopted hybrid working models to minimize

exposure, we cannot guaranty that there will be no infection and spread of the virus among our employees and staff.

The COVID-19 pandemic

is also affecting the United States, Israel and global economies and has affected, and may continue to affect, the conduct of our clinical

trials and may in the future affect our operations and those of third parties on which we rely, including by causing disruptions in our

raw material supply.

In that regard, to date we have experienced delays in enrolling patients in our various studies due to the COVID-19

In addition, the

COVID-19 pandemic may affect the operations of the FDA and other health authorities, which could result in delays of reviews and approvals,

including with respect to our Phase III clinical trial related to muscle recovery following surgery for hip fracture.

The evolving COVID-19

pandemic has already impacted, and may continue to, directly or indirectly impact the pace of enrollment in our clinical trials as patients

may avoid or may not be able to travel to healthcare facilities and physicians’ offices unless due to a health emergency and clinical

trial staff may not be able to physically arrive to the clinical sites.

Additionally, such facilities and offices have been and may continue

to be required to focus limited resources on non-clinical trial matters, including treatment of COVID-19 patients, thereby decreasing

availability, in whole or in part, for clinical trial services.

Additionally, the stock market has been unusually volatile during the

COVID-19 outbreak and such volatility may continue.

To date, during certain periods of the COVID-19 pandemic, our share price fluctuated

significantly, and such fluctuation may continue to occur.

The ultimate impact

of the COVID-19 pandemic is highly uncertain and subject to change.

We do not yet know the full extent of potential delays or impacts

on our business, financing or clinical trial activities, or on healthcare systems or the global economy as a whole if the pandemic continues

for an extended period of time or significantly worsens.

However, these effects could have a material impact on our liquidity, capital

resources, operations and business and those of the third parties on which we rely.

Since we received grants from the IIA, we are subject to on-going

restrictions.

We have received royalty-bearing

grants from the IIA, for research and development programs that meet specified criteria.

The terms of the IIA’s grants limit our

ability to transfer know-how developed under an approved research and development program outside of Israel, regardless of whether the

royalties are fully paid.

Any non-Israeli citizen, resident or entity that, among other things, becomes a holder of 5% or more of our

share capital or voting rights, is entitled to appoint one or more of our directors or our Chief Executive Officer, or CEO, serves as

a director of our Company or as our CEO is generally required to notify the same to the IIA and to undertake to observe the law governing

the grant programs of the IIA, the principal restrictions of which are the transferability limits described above.

For more information,

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital

Since we have signed the EIB Finance Agreement,

we have agreed to guaranty the loan and have also agreed to other limitations that require us to notify the EIB, and in some cases obtain

their approval, before we engage with other banks for additional sources of funding or with potential partners for certain strategic activities.

The EIB Finance Agreement

contains certain limitations that we must adhere to such as the use of proceeds received from the EIB, the disposal of assets, substantive

changes in the nature of our business, our potential execution of mergers and acquisitions, changes in our holding structure, distributions

of future potential dividends and our engaging with other banks and financing entities for other loans.

Our principal research and development and manufacturing facilities

are located in Israel and the unstable military and political conditions of Israel may cause interruption or suspension of our business

operations without warning.

Our principal research and

development and manufacturing facilities are located in Israel.

As a result, we are directly influenced by the political, economic and

military conditions affecting Israel.

Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place

between Israel and its Arab neighbors.

During June 2021, July and August 2014 and November 2012, Israel was engaged in an armed conflict

with a militia group and political party which controls the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed

conflict with Hezbollah, a Lebanese Islamist Shiite militia group and political party.

These conflicts involved missile strikes against

civilian targets in various parts of Israel, including areas in which our employees and some of our consultants are located, and negatively

affected business conditions in Israel.

We cannot predict if or when armed conflict will take place and the duration of each conflict.

Furthermore, certain of our

employees may be obligated to perform annual reserve duty in the Israel Defense Forces and are subject to being called up for active military

duty at any time.

All Israeli male citizens who have served in the army are required to perform reserve duty until they are between 40

and 49 years old, depending upon the nature of their military service.

In addition, Israeli-based

companies and companies doing business with Israel, have been the subject of an economic boycott by members of the Arab League and certain

other predominantly Muslim countries since Israel’s establishment.

Although Israel has entered into various agreements with certain

Arab countries and the Palestinian Authority, and various declarations have been signed in connection with efforts to resolve some of

the economic and political problems in the Middle East, we cannot predict whether or in what manner these problems will be resolved.

and acts of terrorism have resulted in significant damage to the Israeli economy, including reducing the level of foreign and local investment.

Risk Related to Our Industry

The trend towards consolidation in the pharmaceutical and biotechnology

industries may adversely affect us.

There is a trend towards consolidation

in the pharmaceutical and biotechnology industries.

This consolidation trend may result in the remaining companies having greater financial

resources and technical discovery capabilities, thus intensifying competition in these industries.

This trend may also result in fewer

potential collaborators or licensees for our therapeutic product candidates.

Also, if a consolidating company is already doing business

with our competitors, we may lose existing licensees or collaborators as a result of such consolidation.

This trend may adversely affect

our ability to enter into license agreements or agreements for the development and commercialization of our product candidates, and as

a result may materially harm our business.

If we do not keep pace with our competitors

and with technological and market changes, our technology and products may become obsolete and our business may suffer.

The cellular therapeutics

industry, of which we are a part, is very competitive and is subject to technological changes that can be rapid and intense.

We have faced,

and will continue to face, intense competition from biotechnology, pharmaceutical and biopharmaceutical companies, academic and research

institutions and governmental agencies engaged in cellular therapeutic and drug discovery activities or funding, both in the United States

and internationally.

Some of these competitors are pursuing the development of cellular therapeutics, drugs and other therapies that target

the same diseases and conditions that we target in our clinical and pre-clinical programs.

Some of our competitors have

greater resources, more product candidates and have developed product candidates and processes that directly compete with our products.

Our competitors may have developed, or could develop in the future, new products that compete with our products or even render our products

Potential product liability claims could

adversely affect our future earnings and financial condition.

We face an inherent business

risk of exposure to product liability claims in the event that the use of our products results in adverse effects.

We may not be able

to maintain adequate levels of insurance for these liabilities at reasonable cost and/or reasonable terms.

Excessive insurance costs or

uninsured claims would add to our future operating expenses and adversely affect our financial condition.

Risk Related to Our Dependence on Third Parties

We are dependent upon third party suppliers

for raw materials needed to manufacture PLX;

if any of these third parties fails or is unable to perform in a timely manner, our ability

to manufacture and deliver will be compromised.

In addition to the placenta

used in the clinical manufacturing process of PLX, we require certain raw materials.

These items must be manufactured and supplied to

us in sufficient quantities and in compliance with current GMP.

To meet these requirements, we have entered into supply agreements with

firms that manufacture these raw materials to current GMP standards.

Our requirements for these items are expected to increase if and

when we transition to the manufacture of commercial quantities of our cell-based drug candidates.

In addition, as we proceed

with our clinical trial efforts, we must be able to continuously demonstrate to the FDA, EMA and other regulatory authorities that we

can manufacture our cell therapy product candidates with consistent characteristics.

Accordingly, we are materially dependent on these

suppliers for supply of current GMP-grade materials of consistent quality.

Our ability to complete ongoing clinical trials may be negatively

affected in the event that we are forced to seek and validate a replacement source for any of these critical materials.

We intend to decrease our

dependency in third party suppliers for raw materials.

To that effect we have developed a serum-free formulation which is expected to

support the manufacturing of cell therapy products.

This serum-free formulation was developed using our deep understanding in cell therapy

industrial scale production standards, and the quality methods designed to support implementation in Phase III development and marketing.

Achieving this significant technological challenge is expected to provide us with large-scale, highly consistent production with operational

independency from third party suppliers for standard serum, an expensive and quantity limited product.

There can be no guarantee that

we will successfully implement the use of our serum-free formulation to support the manufacturing of cell therapy products or any other

future product candidates, if any, that we seek to produce using such formulation, or that such implementation of the serum-free formulation

will decrease our dependency on third party suppliers for raw materials.

We rely and will continue to rely on third

parties to conduct our clinical trials.

If these third parties do not successfully carry out their contractual duties or meet expected

deadlines, we may not be able to obtain regulatory approval of or commercialize our product candidates.

We depend and will depend

upon independent investigators and collaborators, such as universities, medical institutions, CROs, vendors and strategic partners to

conduct our pre-clinical and clinical trials under agreements with us.

We negotiate budgets and contracts with CROs, vendors and study

sites which may result in delays to our development timelines and increased costs.

We rely heavily on these third parties over the course

of our clinical trials, and we control only certain aspects of their activities.

Nevertheless, we are responsible for ensuring that each

of our studies is conducted in accordance with applicable protocol, legal, regulatory and scientific standards, and our reliance on third

parties does not relieve us of our regulatory responsibilities.

We and these third parties are required to comply with current good clinical

practices, or cGCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for product

candidates in clinical development.

Regulatory authorities enforce

these cGCPs through periodic inspections of trial sponsors, principal investigators and trial sites.

If we or any of these third parties

fail to comply with applicable cGCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and the FDA

or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

We cannot assure that, upon inspection, such regulatory authorities will determine that any of our clinical trials comply with the cGCP

In addition, any Phase III clinical trials which we may conduct must be conducted with biologic product produced under cGMP

and may require a large number of test patients.

Biologic products for commercial purposes must also be produced under cGMP.

or any failure by these third parties to comply with these regulations or to recruit a sufficient number of patients may require us to

repeat clinical trials, which would delay the regulatory approval process.

Moreover, our business may be implicated if any of these third

parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws and regulations.

Any third parties conducting

our clinical trials are not and will not be our employees and, except for remedies available to us under our agreements with such third

parties, which in some instances may be limited, we cannot control whether or not they devote sufficient time and resources to our ongoing

pre-clinical, clinical and nonclinical programs.

These third parties may also have relationships with other commercial entities, including

our competitors, for whom they may also be conducting clinical trials or other

drug development activities, which could affect their performance on our behalf.

If these third parties do not successfully carry out

their contractual duties or obligations or meet expected deadlines, if they declare bankruptcy or if they need to be replaced for whatever

reason or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols

or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to

complete development of, obtain regulatory approval of or successfully commercialize our product candidates.

As a result, our financial

results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate

revenue could be delayed.

Switching or adding third parties to conduct our clinical trials involves substantial cost and requires extensive

management time and focus.

In addition, there is a natural transition period when a new third party commences work.

As a result, delays

occur, which can materially impact our ability to meet our desired clinical development timelines.

Our internal computer systems, or those

used by our CROs or other contractors or consultants, may fail or suffer security breaches.

We rely on and utilize services

provided by third parties in connection with our clinical trials, which services involve the collection, use, storage and analysis of

personal health information.

While we receive assurances from these vendors that their services are compliant with the Health Insurance

Portability and Accountability Act, or HIPAA, and other applicable privacy laws, there can be no assurance that such third parties will

comply with applicable laws or regulations.

Non-compliance by such vendors may result in liability for us which would have a material

adverse effect on our business, financial conditions and results of operations.

implementation of security measures, our internal computer systems and those of our current and future CROs and other contractors

and consultants are vulnerable to damage from computer viruses, cyber security incidents and unauthorized access.

While, to our

knowledge, we have not experienced any such material system failure or security breach to date, if such an event were to occur and

cause interruptions in our operations, it could result in a material disruption of our development programs and our business

For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our

regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

To the extent that any disruption

or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential

or proprietary information, we could incur liability and the further development and commercialization of our product candidates

could be delayed.

Unsuccessful compliance with certain European

privacy regulations could have an adverse effect on our business and reputation.

collection and use of personal health data in the European Union is governed by the provisions of the General Data Protection Regulation,

This directive imposes several requirements relating to the consent of the individuals to whom the personal data relates, the

information provided to the individuals, notification of data processing obligations to the competent national data protection authorities

and the security and confidentiality of the personal data.

The GPDR also extends the geographical scope of European Union data protection

law to non-European Union entities under certain conditions, tightens existing European Union data protection principles and creates new

obligations for companies and new rights for individuals.

Failure to comply with the requirements of the GDPR and the related national

data protection laws of the European Union Member States may result in fines and other administrative penalties.

There may be circumstances

under which a failure to comply with GDPR, or the exercise of individual rights under the GDPR, would limit our ability to utilize clinical

trial data collected on certain subjects.

The GDPR regulations impose additional responsibility and liability in relation to personal

data that we process and we intend to put in place additional mechanisms ensuring compliance with these and/or new data protection rules.

to these European privacy regulations and unsuccessful compliance may be onerous and adversely affect our business, financial condition,

prospects, results of operations and reputation.

Existing government programs and tax benefits may be terminated.

We have received certain Israeli

government approvals under certain programs and may in the future utilize certain tax benefits in Israel by virtue of these programs.

To remain eligible for such tax benefits, we must continue to meet certain conditions.

we fail to comply with these conditions in the future, the benefits we receive could be canceled and have to pay additional taxes.

We cannot guarantee that these programs and tax benefits will be continued in the future, at their current levels or at all.

these programs and tax benefits are ended, our business, financial condition and results of operations could be materially adversely

we fail to obtain or maintain orphan drug exclusivity for our products, our competitors may sell products to treat the same conditions

and our revenue will be reduced.

business strategy focuses on the development of drugs that are eligible for FDA and European Union orphan drug designation.

the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is intended to treat a rare disease or condition,

defined as a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the

United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the

United States.

In the European Union, the EMA’s Committee for Orphan Medicinal Products, or COMP, grants orphan drug designation

to promote the development of products that are intended for the diagnosis, prevention, or treatment of a life-threatening or

chronically debilitating condition affecting not more than five in 10,000 persons in the European Union Community.

Additionally,

designation is granted for products intended for the diagnosis, prevention, or treatment of a life threatening, seriously debilitating

or serious and chronic condition and when, without incentives, it is unlikely that sales of the drug in the European Union would

be sufficient to justify the necessary investment in developing the drug or biological product.

the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards

clinical trial costs, tax advantages, and user-fee waivers.

In addition, if a product receives the first FDA approval for the

indication for which it has orphan designation, the product is entitled to orphan drug exclusivity, which means the FDA may not

approve any other application to market the same drug for the same indication for a period of seven years, except in limited circumstances,

such as a showing of clinical superiority over the product with orphan exclusivity or where the manufacturer is unable to assure

sufficient product quantity.

In the European Union, orphan drug designation also entitles a party to financial incentives such

as reduction of fees or fee waivers and ten years of market exclusivity is granted following drug or biological product approval.

This period may be reduced to six years if the orphan drug designation criteria are no longer met, including where it is shown

that the product is sufficiently profitable not to justify maintenance of market exclusivity.

if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition

because different drugs with different active moieties can be approved for the same condition.

with orphan drug exclusivity, if a third party were to prepare or market a product which infringes upon our intellectual property,

we may need to initiate litigation, which may be costly, to enforce our rights against such party.

After an orphan drug is approved,

the FDA can subsequently approve the same drug with the same active moiety for the same condition if the FDA concludes that the

later drug is safer, more effective, or makes a major contribution to patient care.

Orphan drug designation on its own neither

shortens the development time or regulatory review time for a drug.

orphan drug products are typically sold at a high price relative to other medications, the market may not be receptive to high

pricing of our products.

develop our product candidates to treat rare and ultra-rare diseases, a space where medications are usually sold at high prices

compared with other medications.

even if regulatory authorities approve our product candidates, the market may not be receptive to, and it may be difficult for

us to achieve, a per-patient per-year price high enough to allow us to realize a return on our investment.

patent approval process is complex and we cannot be sure that our pending patent applications or future patent applications will

patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual

questions and has in recent years been the subject of much litigation.

As a result, the issuance, scope, validity, enforceability

and commercial value of our and any future licensors’

patent rights are highly uncertain.

Our pending and future patent applications

may not result in patents being issued which protect our technology or products or which effectively prevent others from commercializing

competitive technologies and products.

Changes in either the patent laws or interpretation of the patent laws in the United States

and other countries may diminish the value of our patents or narrow the scope of our patent protection.

The laws of foreign countries

may not protect our rights to the same extent as the laws of the United States and we may not be able to obtain meaningful patent

protection for any of our commercial products either in or outside the United States.

assurance can be given that the scope of any patent protection granted will exclude competitors or provide us with competitive

advantages, that any of the patents that have been or may be issued to us will be held valid if subsequently challenged, or that

other parties will not claim rights to or ownership of our patents or other proprietary rights that we hold.

Furthermore, there

can be no assurance that others have not developed or will not develop similar products, duplicate any of our technology or products

or design around any patents that have been or may be issued to us or any future licensors.

Since patent applications in the United

States and in Europe are not publicly disclosed until patents are issued, there can be no assurance that others did not first

file applications for products covered by our pending patent applications, nor can we be certain that we will not infringe any

patents that may be issued to others.

parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which

would be uncertain and could have a material adverse effect on our business.

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 the proprietary rights of third parties.

to conduct comprehensive freedom-to-operate searches to determine whether our proposed business activities or use of certain of

the patent rights owned by us would infringe patents issued to third parties.

We may become party to, or threatened with, future

adversarial proceedings or litigation regarding intellectual property rights with respect to our products and technology, including

interference proceedings before the U.S.

Patent and Trademark Office.

Third parties may assert infringement claims against us

based on existing patents or patents that may be granted in the future.

If we are found to infringe a third party’s intellectual

property rights, we could be required to obtain a license from such third party to continue developing and marketing our products

and technology.

However, we may not be able to obtain any required license on commercially reasonable terms or at all.

if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies

licensed to us.

We could be forced, including by court order, to cease commercializing the infringing technology or product.

addition, we could be found liable for monetary damages.

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.

For example, we are

aware of issued third party patents directed to placental stem cells and their use for therapy and in treating various diseases.

We may need to seek a license for one or more of these patents.

No assurances can be given that such a license will be available

on commercially reasonable terms, if at all.

Claims that we have misappropriated the confidential information or trade secrets

of third parties could have a similar negative impact on our business.

if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur

significant expenses, and could distract our technical and management personnel from their normal responsibilities.

there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities

analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common

Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for

development activities or any future sales, marketing or distribution activities.

We may not have sufficient financial or other

resources to adequately conduct such litigation or proceedings.

Some of our competitors are able to sustain the costs of such

litigation or proceedings more effectively than we can because of their greater financial resources.

Uncertainties resulting from

the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability

to compete in the marketplace.

must further protect and develop our technology and products in order to become a profitable company.

we do not complete the development of our technology and products in development by the time our patents expire, create additional

sufficient layers of patents or other intellectual property rights, other companies may use the technology to develop competing

If this happens, we may lose our competitive position and our business would likely suffer.

the scope of our patents may not be sufficiently broad to offer meaningful protection.

In addition, our patents could be successfully

challenged, invalidated or circumvented so that our patent rights would not create an effective competitive barrier.

We also intend

to seek patent protection for any of our potential cell therapy products once we have completed their development.

on trade secrets and unpatentable know-how that we seek to protect, in part, by confidentiality agreements with our employees,

consultants, suppliers and licensees.

These agreements may be breached, and we might not have adequate remedies for any breach.

If this were to occur, our business and competitive position would suffer.

may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt

Practices Act could have a material adverse effect on our business.

are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit U.S.

companies or their agents and employees

from providing anything of value to a foreign official or political party for the purposes of influencing any act or decision

of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate

entity or obtain any unfair advantage.

We have operations and agreements with third parties.

Our international activities create

the risk of unauthorized and illegal payments or offers of payments by our employees or consultants, even though they may not

always be subject to our control.

We discourage these practices by our employees and consultants.

However, our existing safeguards

and any future improvements may prove to be less than effective, and our employees or consultants, may engage in conduct for which

we might be held responsible for Any failure by us to adopt appropriate compliance procedures and ensure that our employees and

consultants comply with the FCPA and applicable laws and regulations in foreign jurisdictions could result in substantial penalties

or restrictions on our ability to conduct business in certain foreign jurisdictions.

of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively

affect our business, operating results and financial condition.

If we fail to comply with these conditions in the

future, the benefits we receive could be canceled and have to pay additional taxes.

We cannot guarantee that these programs and tax benefits

will be continued in the future, at their current levels or at all.

If these programs and tax benefits are ended, our business, financial

condition and results of operations could be materially adversely affected.

If we fail to obtain or maintain orphan

drug exclusivity for our products, our competitors may sell products to treat the same conditions and our potential future revenue will

Our business strategy focuses

on the development of drugs that are eligible for FDA and European Union orphan drug designation.

Under the Orphan Drug Act, the FDA may

designate a product as an orphan drug if it is intended to treat a rare disease or condition, defined as a patient population of fewer

than 200,000 in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation

that the cost of developing the drug will be recovered from sales in the United States.

In the European Union, the EMA’s Committee

for Orphan Medicinal Products, or COMP, grants orphan drug designation to promote the development of products that are intended for the

diagnosis, prevention, or treatment of a life-threatening or chronically debilitating condition affecting not more than five in 10,000

persons in the European Union Community.

Additionally, designation is granted for products intended for the diagnosis, prevention, or

treatment of a life threatening, seriously debilitating or serious and chronic condition and when, without incentives, it is unlikely

that sales of the drug in the European Union would be sufficient to justify the necessary investment in developing the drug or biological

In the United States, orphan

drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages,

and user-fee waivers.

In addition, if a product receives the first FDA approval for the indication for which it has orphan designation,

the product is entitled to orphan drug exclusivity, which means the FDA may not approve any other application to market the same drug

for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical superiority over the

product with orphan exclusivity or where the manufacturer is unable to assure sufficient product quantity.

In the European Union, orphan

drug designation also entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of market exclusivity

is granted following drug or biological product approval.

This period may be reduced to six years if the orphan drug designation criteria

are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.

Even if we obtain orphan drug

exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different

active moieties can be approved for the same condition.

Even with orphan drug exclusivity,

if a third party were to prepare or market a product which infringes upon our intellectual property, we may need to initiate litigation,

which may be costly, to enforce our rights against such party.

After an orphan drug is approved, the FDA can subsequently approve the

same drug with the same active moiety for the same condition if the FDA concludes that the later drug is safer, more effective, or makes

a major contribution to patient care.

Orphan drug designation on its own neither shortens the development time or regulatory review time

While orphan drug products are typically

sold at a high price relative to other medications, the market may not be receptive to high pricing of our products.

We develop our product candidates

to treat rare and ultra-rare diseases, a space where medications are usually sold at high prices compared with other medications.

Accordingly, even if regulatory

authorities approve our product candidates, the market may not be receptive to, and it may be difficult for us to achieve, a per-patient

per-year price high enough to allow us to realize a return on our investment.

We may be exposed to liabilities under the

Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse

effect on our business.

We are subject to the Foreign

Corrupt Practice Act, or FCPA, and other laws that prohibit U.S.

companies or their agents and employees from providing anything of value

to a foreign official or political party for the purposes of influencing any act or decision of these individuals in their official capacity

to help obtain or retain business, direct business to any person or corporate entity or obtain any unfair advantage.

We have operations

and agreements with third parties.

Our international activities create the risk of unauthorized and illegal payments or offers of payments

by our employees or consultants, even though they may not always be subject to our control.

We discourage these practices by our employees

and consultants.

However, our existing safeguards and any future improvements may prove to be less than effective, and our employees or

consultants, may engage in conduct for which we might be held responsible for Any failure by us to adopt appropriate compliance procedures

and ensure that our employees and consultants comply with the FCPA and applicable laws and regulations in foreign jurisdictions could

result in substantial penalties or restrictions on our ability to conduct business in certain foreign jurisdictions.

Violations of the FCPA may

result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business,

operating results and financial condition.

In addition, the U.S.

government may seek to hold our Company

liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

COVID-19 pandemic, or any other pandemic, epidemic or outbreak of an infectious disease, may materially and adversely affect our

business and operations.

recent outbreak of COVID-19 originated in Wuhan, China, in December 2019 and has since spread to approximately 200 countries,

including the United States, Israel and many European countries in which we operate.

On March 11, 2020, the World Health Organization

declared the outbreak a pandemic.

While COVID-19 is still spreading and the final implications of the pandemic are difficult to

estimate at this stage, it is clear that it has affected the lives of a large portion of the global population.

At this time,

the pandemic has caused states of emergency to be declared in various countries, travel restrictions imposed globally, quarantines

established in certain jurisdictions and various institutions and companies being closed.

We are actively monitoring the pandemic

and we are taking any necessary measures to respond to the situation in cooperation with the various stakeholders.

on guidelines provided by the Israeli Government, employers (including us) are also required to prepare and increase as much as

possible the capacity and arrangement for employees to work remotely.

In addition, COVID-19 infection of our workforce could result

in a temporary disruption in our business activities, including manufacturing and other functions.

COVID-19 pandemic is also affecting the United States, Israel and global economies and has affected, and may continue to affect,

the conduct of our clinical trials and may in the future affect our operations and those of third parties on which we rely, including

by causing disruptions in our raw material supply, though to date we have not experienced any such disruptions.

addition, the COVID-19 pandemic may affect the operations of the FDA and other health authorities, which could result in delays

of reviews and approvals, including with respect to our Phase III clinical trials relating to CLI and muscle recovery following

surgery for hip fracture.

The evolving COVID-19 pandemic has already impacted, and may continue to, directly or indirectly impact

the pace of enrollment in our clinical trials as patients may avoid or may not be able to travel to healthcare facilities and

physicians’

offices unless due to a health emergency and clinical trial staff can no longer get to the clinic.

Additionally,

such facilities and offices have been and may continue to be required to focus limited resources on non-clinical trial matters,

including treatment of COVID-19 patients, thereby decreasing availability, in whole or in part, for clinical trial services.

Additionally,

the stock market has been unusually volatile during the COVID-19 outbreak and such volatility may continue.

To date, during certain

periods of the COVID-19 pandemic, our stock price fluctuated significantly, and such fluctuation may continue to occur.

impact of the COVID-19 pandemic is highly uncertain and subject to change.

We do not yet know the full extent of potential delays

or impacts on our business, financing or clinical trial activities, or on healthcare systems or the global economy as a whole.

However, these effects could have a material impact on our liquidity, capital resources, operations and business and those of

the third parties on which we rely.

impact of the use of our PLX cells in various COVID-19 related compassionate use programs, as well as our expected clinical trial,

if any, on our business and our results of operations cannot be predicted with certainty, as factors including, but not limited

to, the ultimate duration and scope of the compassionate use authorization, as well as the availability of our product internationally,

are not determinable at this time.

Our PLX cells may not be successful in treating complications associated with COVID-19.

Unresolved Staff Comments.

government may seek to hold our Company liable for successor liability

FCPA violations committed by companies in which we invest or that we acquire.

Unresolved Staff

Not Applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors