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Item 2. Management’s Discussion and Analysis

2022-02-07 compared with 2021-11-08 · 256 added, 179 removed, 87 unchanged (83% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking

quarterly report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform

Act of 1995 and other Federal securities laws, and is subject to the safe-harbor created by such Act and laws.

Forward-Looking Statements

may include statements regarding our goals, beliefs, strategies, objectives, plans, including product and technology developments, future

financial conditions, results or projections or current expectations.

In some cases, you can identify forward-looking statements by terminology

such as “may,” “will,” “should,” “expect,” “intend,” “plan,”

“anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,”

the negative of such terms, or other variations thereon or comparable terminology.

These statements are merely predictions and therefore

inherently subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results, performance

levels of activity, or our achievements, or industry results to be materially different from those contemplated by the forward-looking

Such forward-looking statements appear in this Item 2 – “Management’s Discussion and Analysis of Financial

Condition and Results of Operations,” and may appear elsewhere in this Quarterly Report on Form 10-Q and include, but are not limited

to, statements regarding the following:

the expected development

and potential benefits from our products in treating various medical conditions;

our entering into certain

contracts with third parties;

the prospects of entering

into additional license agreements, or other forms of cooperation with other companies, research organizations and medical institutions;

our pre-clinical and clinical

trials plans, including timing of initiation, expansion, enrollment and conclusion of trials;

achieving regulatory approvals,

including under accelerated paths;

receipt of future funding

from the Israel Innovation Authority, or IIA, the European Union’s Horizon 2020 program, as well as grants from other independent

third parties;

the receipt of funds pursuant

to our finance agreement, or the EIB Finance Agreement, with the European Investment Bank, or the EIB, and whether we will achieve

the milestones necessary to receive funds thereunder;

developing capabilities

for new clinical indications of placenta expanded, or PLX, cells and new products;

the progress of our regulated

clinical multinational trial program for the potential use of PLX cells in the treatment of patients suffering from ARDS associated

with COVID-19;

our expectation to demonstrate

a real-world impact and value from our pipeline, technology platform and commercial-scale manufacturing capacity;

our expectations regarding

our short- and long-term capital requirements;

our outlook for the coming

months and future periods, including but not limited to our expectations regarding future revenue and expenses;

information with respect

to any other plans and strategies for our business;

our expectation regarding

the impact of the COVID-19 pandemic, including on our clinical trials and operations.

business and operations are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained

in this report.

addition, historic results of scientific research, clinical and preclinical trials do not guarantee that the conclusions of future research

or trials would not suggest different conclusions.

Also, historic results referred to in this periodic report would be interpreted differently

in light of additional research, clinical and preclinical trials results.

Except as required by law, we undertake no obligation to release

publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the

date hereof or to reflect the occurrence of unanticipated events.

Further information on potential factors that could affect our business

is described under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended

June 30, 2021, or the 2021 Annual Report, as well as Item 1A of this Quarterly Report.

Readers are also urged to carefully review and

consider the various disclosures we have made in that report.

used in this quarterly report, the terms “we”, “us”, “our”, the “Company” and “Pluristem”

mean Pluristem Therapeutics Inc.

This quarterly report on Form

10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other

Federal securities laws, and is subject to the safe-harbor created by such Act and laws.

Forward-looking statements may include statements

regarding our goals, beliefs, strategies, objectives, plans, including product and technology developments, future financial conditions,

results or projections or current expectations.

In some cases, you can identify forward-looking statements by terminology such as “may,”

“will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,”

“estimate,” “predict,” “potential” or “continue,” the negative of such terms, or other

variations thereon or comparable terminology.

These statements are merely predictions and therefore inherently subject to known and unknown

risks, uncertainties, assumptions and other factors that may cause actual results, performance levels of activity, or our achievements,

or industry results to be materially different from those contemplated by the forward-looking statements.

Such forward-looking statements

appear in this Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”

and may appear elsewhere in this Quarterly Report on Form 10-Q and include, but are not limited to, statements regarding the following:

expected development and potential benefits from our products in treating various medical

entering into certain contracts with third parties;

prospects of entering into additional license agreements, or other forms of cooperation with

other companies, research organizations and medical institutions, including, without limitation

Tnuva (as defined below);

pre-clinical and clinical trials plans, including timing of initiation, expansion, enrollment,

results, and conclusion of trials;

regulatory approvals, including under accelerated paths;

of future funding from the Israel Innovation Authority, or IIA, the European Union’s

Horizon programs, as well as grants from other independent third parties;

receipt of additional funds pursuant to our finance agreement, or the EIB Finance Agreement,

with the European Investment Bank, or the EIB, and whether we will achieve further milestones

necessary to receive additional funds thereunder;

capabilities for new clinical indications of placenta expanded, or PLX, cells and new products;

progress of our multinational Phase III trial program for the potential use of PLX cells

in the treatment of muscle injury following arthroplasty for hip fracture;

expectation to demonstrate a real-world impact and value from our pipeline, technology platform

and commercial-scale manufacturing capacity;

possible impacts of cybersecurity incidents on our business and operations;

expectations regarding our short- and long-term capital requirements;

outlook for the coming months and future periods, including but not limited to our expectations

regarding future revenue and expenses;

● information

with respect to any other plans and strategies for our business;

expectations regarding the impact of the COVID-19 pandemic, including on our clinical trials

and operations.

Our business and operations

are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained in this report.

In addition, historic

results of scientific research, clinical and preclinical trials do not guarantee that the conclusions of future research or trials would

not suggest different conclusions.

Also, historic results referred to in this periodic report would be interpreted differently in light

of additional research, clinical and preclinical trials results.

Except as required by law, we undertake no obligation to release publicly

the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof

or to reflect the occurrence of unanticipated events.

Further information on potential factors that could affect our business is described

under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended June 30,

2021, or the 2021 Annual Report, as well as Item 1A of this Quarterly Report.

Readers are also urged to carefully review and consider

the various disclosures we have made in that report.

As used in this quarterly

report, the terms “we”, “us”, “our”, the “Company” and “Pluristem” mean Pluristem

Therapeutics Inc.

and our wholly owned subsidiaries, Pluristem Ltd.

and Pluristem GmbH, unless otherwise indicated or

as otherwise required by the context.

are a biotechnology company focused in the field of regenerative medicine, and a leading developer of placenta-based cell therapy product

candidates for the treatment of multiple inflammatory, muscle injuries and hematologic conditions.

Our operations are focused on the

research, development, manufacturing, conducting clinical studies and business development of cell therapeutics and related technologies.

develop, and intend to commercialize, cell therapy production technologies and products that are derived from the human placenta after

a full-term delivery of a healthy baby.

Our placental expanded, or PLX, cells are adherent stromal cells that are expanded using a proprietary

three-dimensional, or 3D, process.

This system utilizes a synthetic scaffold to create an artificial 3D environment where placental-derived

stromal cells can grow.

Our PLX cells can be administered to patients off-the-shelf, without blood or tissue matching or additional

manipulation prior to administration.

PLX cells are believed to release a range of therapeutic proteins in response to the patient’s

condition such as inflammation, muscle trauma, hematological disorders and radiation damage.

are conducting several multinational clinical studies which consist of a Phase III clinical study in muscle recovery following surgery

for hip fracture and two Phase II clinical studies in Acute Respiratory Distress Syndrome, or ARDS, associated with COVID-19 in the United

States, Europe and Israel.

In addition, we are focusing on other clinical programs in the hematological field such as a Phase I clinical

study for incomplete recovery following bone marrow transplantation in the United States and Israel, an investigator-led Phase I/II Chronic

Graft versus Host Disease study in Israel, and Acute Radiation Syndrome, or ARS, under the U.S.

Food and Drug Administration, or FDA,

We believe that each of these indications is a severe unmet medical need.

July 8, 2021, we announced that we are bringing our COVID-19 complicated by ARDS Phase II studies in the United States, Europe and Israel

to clinical readout.

The analysis will be based on 89 patients enrolled.

We expect to announce the topline results of the readout during

the fourth calendar quarter of 2021.

Our Phase III clinical study in muscle recovery following surgery for hip fracture has enrolled

more than 95 percent of its patients and is expected to complete enrollment in November 2021.

have completed enrollment in our first in human Phase I clinical study in incomplete hematopoietic recovery following hematopoietic cell

transplantation, or HCT, in the United States and Israel.

The study has completed enrollment of 21 patients and is designed to assess

the safety of PLX-R18.

We completed one year follow up for all patients during September 2021.

On April 2021, we announced positive

topline results of this study as disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission, or the

manufacturing facility complies with the European, Japanese, Israeli, South Korean and the FDA’s current Good Manufacturing Practice,

or cGMP, requirements and has been inspected and approved by the European and Israeli regulators for production of PLX cells for late

stage trials.

and Pluristem GmbH, unless otherwise indicated or as otherwise required

by the context.

We are a biotechnology company

with an advanced cell-based technology platform.

We have developed a unique three-dimensional, or 3D, technology platform for cell expansion

with an industrial scale in-house GMP cell manufacturing facility.

We are utilizing our technology in the field of regenerative medicine

and plan to utilize it in other industries and verticals that have a need for our mass scale and cost-effective cell expansion platform.

Our operations are focused

on the research, development and manufacturing of cells, conducting clinical studies and the business development of cell therapeutics

and cell based technologies, such as our recent collaboration with Tnuva Food Industries – Agricultural Cooperative in Israel Ltd.,

through its fully owned subsidiary, Tnuva Food-Tech Incubator (2019), Limited Partnership, or Tnuva, to use our technology to establish

a cultured food platform.

We use our advanced cell-based

technology platform in the field of regenerative medicine to develop placenta-based cell therapy product candidates for the treatment

of multiple inflammatory, muscle injuries and hematologic conditions.

We develop, and intend to commercialize, cell therapy production

technologies and products that are derived from the human placenta after a full-term delivery of a healthy baby.

Our placental expanded,

or PLX, cells are adherent stromal cells that are expanded using our 3D platform.

Our PLX cells can be administered to patients

off-the-shelf, without blood or tissue matching or additional manipulation prior to administration.

PLX cells are believed to release

a range of therapeutic proteins in response to the patient’s condition.

We intend to enhance the global

reach of our cell expansion technology and PLX product portfolio, enabling the development of various new cell-based products for multiple

applications, based on our innovative technology and manufacturing capabilities.

goal is to make significant progress with our clinical pipeline and clinical studies to ultimately bring innovative, potent therapies

to patients who need new treatment options.

In addition, we plan to continue leveraging our proprietary technology for other industries

and verticals that have a need for our mass scale and cost-effective cell expansion platform, such as the food tech industry.

to demonstrate a real-world impact and value from our cell based technology platform and PLX pipeline.

Our business model for commercialization

and revenue generation includes, but is not limited to, licensing deals, joint ventures, direct sale of our products and partnerships.

Clinical Studies

We are conducting several

multinational clinical studies which consist of a Phase III clinical study in muscle recovery following surgery for hip fracture and two

Phase II clinical studies in Acute Respiratory Distress Syndrome, or ARDS, associated with COVID-19 in the United States, Europe and Israel.

In addition, we are focusing on other clinical programs in the hematological field such as a Phase I clinical study for incomplete recovery

following bone marrow transplantation in the United States and Israel, an investigator-led Phase I/II Chronic Graft versus Host Disease

study in Israel, and Acute Radiation Syndrome, or ARS, under the U.S.

Food and Drug Administration, or FDA, animal rule.

We believe that

each of these indications is a severe unmet medical need.

On November 15, 2021, we announced

that we fully completed the enrollment of 240 patients for our Phase III clinical study in muscle recovery following surgery for hip fracture.

The multinational clinical study includes patients from the U.S., Europe, and Israel, and we expect to announce topline results in the

third calendar quarter of 2022.

On December 27, 2021, we announced

topline results for our COVID-19 studies based on 89 patients enrolled.

The primary efficacy endpoint was the number of ventilator free

days, or VFD, from day 1 through day 28 of the studies.

VFD at day 60 and all-cause mortality at days 28 and 60 were part of the secondary

efficacy endpoints in the studies.

The studies did not meet the primary efficacy endpoint of statistically significant improvement of

VFD at 28 days.

Taking into consideration the baseline risk factors of the ARDS patients, no differences in the safety profile were observed

between PLX-PAD and placebo.

We have completed enrollment

in our first in human Phase I clinical study in incomplete hematopoietic recovery following hematopoietic cell transplantation, or HCT,

in the United States and Israel.

The study has completed enrollment of 21 patients and is designed to assess the safety of PLX-R18.

completed one year follow up for all patients during September 2021.

In April 2021, we announced positive topline results of this

study and we plan to announce final results following a one year follow up during the first calendar quarter of 2022.

Our manufacturing facility

complies with the European, Japanese, Israeli, South Korean and the FDA’s current Good Manufacturing Practice, or cGMP, requirements

and has been inspected and approved by the European Qualified Person, or QP, and Israeli MoH for production of PLX cells for late stage

We have also been granted manufacturer/importer authorization and cGMP Certification by the Israeli Ministry of Health.

If we obtain FDA and other regulatory approvals to market PLX cells, we expect to have in-house production capacity to grow PLX cells

in commercial quantities.

goal is to make significant progress with our clinical pipeline and our clinical studies in order to ultimately bring innovative, potent

therapies to patients who need new treatment options.

We expect to demonstrate a real-world impact and value from our pipeline, technology

platform and commercial-scale manufacturing capacity.

Our business model for commercialization and revenue generation includes, but is

not limited to, licensing deals, joint ventures with pharmaceutical companies, direct sale of our products, and partnerships.

RESULTS OF OPERATIONS – THREE MONTHS

ENDED SEPTEMBER 30, 2021 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2020.

We had no revenues during the

three-month periods ended September 30, 2021 and September 30, 2020.

obtain FDA and other regulatory approvals to market PLX cells, we expect to have in-house production capacity to grow PLX cells in commercial

On January 5, 2022, we entered

a joint venture with Tnuva and through our fully owned subsidiary Pluristem Ltd.

Under the joint venture agreement, we established a new

company, Plurinuva Ltd.

(which name may be changed from time to time), an Israeli company, or NewCo, with the purpose of developing cultured

meat products of all types and kinds.

NewCo is intended to be engaged in the development, manufacturing and commercialization of technology,

know-how and products that will be based on licensed products relating to the field of cultured meat, or the Field.

Pursuant to the joint venture,

Tnuva entered into a Share Purchase Agreement, or the SPA, with NewCo and Pluristem Ltd., pursuant to which NewCo shall issue, on the

closing date of the SPA, 15.79% of its share capital to Tnuva, as well as a warrant to purchase additional shares of Newco, in consideration

of an aggregate of $7,500,000 in cash.

In addition, pursuant to the SPA, in the event the Company decides to use its technology for the

development of cultured milk or fish products, Tnuva shall also have the right, for a period of seven (7) years following the Closing

Date, to participate in the formation of additional separate joint ventures for the development of those products.

Prior to the Closing Date,

the Subsidiary and NewCo also agreed to execute a Technology License Agreement, or the License Agreement, and at the Closing, the Subsidiary

and NewCo shall execute a Transitional Services Agreement, or the Services Agreement.

Pursuant to the License Agreement, the Subsidiary

shall grant NewCo an exclusive, royalty bearing, perpetual and irrevocable, worldwide, non-transferable (except under specific circumstances

specified thereunder), sublicensable license to its technology for the use in the development of the Licensed Products.

In addition, NewCo

shall grant the Subsidiary, pursuant to the License Agreement, an exclusive, perpetual and irrevocable, worldwide, sublicensable, royalty-free,

license to use, make, exploit and develop the improvements made by NewCo to the licensed technology outside of the Field.

In consideration

for the license, NewCo agreed to grant the Subsidiary royalties in the mid-single digits.

Pursuant to the terms of the Services Agreement,

the Subsidiary shall provide NewCo transitional services to support its commercial efforts on a cost basis, for an initial term of eighteen

(18) months, subject to mutual extension for an additional six (6) months.

Pursuant to the SPA, Tnuva

and NewCo agreed to enter into a Commercialization Agreement within twelve (12) months pursuant to which Tnuva shall be granted exclusive

marketing, distribution and sale rights of the Licensed Products in Israel.

Tnuva’s exclusivity in the region will be subject to

achieving and maintaining specific milestones.

NewCo shall retain exclusive worldwide marketing, distribution, and sale rights for the

Licensed Products worldwide, except in Israel.

RESULTS OF OPERATIONS – THREE AND SIX

MONTHS ENDED DECEMBER 31, 2021 COMPARED TO THREE AND SIX MONTHS ENDED DECEMBER 31, 2020.

We had no revenues for either

the six or three-month periods ended December 31, 2021 and December 31, 2020.

Research and Development Expenses, Net

Research and development expense,

net (costs less participation and grants by the Horizon 2020 program, the IIA and other parties) for the three-month period ended September

30, 2021 increased by 7% from $5,938,000 for the three-month period ended September 30, 2020 to $6,353,000.

The increase is mainly attributed

(1) an increase in payroll expenses related to payroll adjustments and the strength of the New Israel Shekel, or NIS, against the

dollar and (2) a decrease in participation by the EU with respect to the Horizon 2020 program, as a result of our utilizing the entirety

of the grant under such program during the three month period ended September 30, 2020.

The increase was partially offset by lower clinical

trial subcontractor expenses associated with our CLI clinical trial that was terminated and a decrease in materials expenses.

net (costs less participation and grants by the Horizon 2020 program, the IIA and other parties) for the six-month period ended December

31, 2021 decreased by 8% from $13,915,000 for the six-month period ended December 31, 2020 to $12,860,000.

The decrease is mainly attributed

to a decrease in clinical trial subcontractor expenses following the termination of our prior study relating to the use of our PLX-PAD

cells for the treatment of critical limb ischemia, or CLI, and the progress of our Phase II studies of ARDS associated with COVID-19.

The decrease was partially offset by higher payroll expenses related to payroll adjustments and the strength of the New Israel Shekel,

or NIS, against the U.S.

dollar and a decrease in participation by the EU with respect to the Horizon 2020 program, as a result of our

utilizing the entirety of the grant under such program during the six-month period ended December 31, 2020.

Research and development expense,

net (costs less participation and grants by the Horizon 2020 program, the IIA and other parties) for the three-month period ended December

31, 2021 decreased by 18% from $7,977,000 for the three-month period ended December 31, 2020 to $6,507,000.

The decrease is mainly attributed

to a decrease in clinical trial subcontractor expenses following the termination of the CLI and the progress of our Phase II studies of

ARDS associated with COVID-19.

The decrease was partially offset by higher payroll expenses related to payroll adjustments and the strength

of the NIS against the U.S.

General and Administrative Expenses

General and administrative

expenses for the three-month period ended September 30, 2021 increased by 82% from $2,799,000 for the three-month period ended September

expenses for the six-month period ended December 31, 2021 increased by 19% from $7,896,000 for the six-month period ended December 31,

2020 to $9,376,000.

The increase is mainly attributed to:

(1) an increase in share-based compensation expenses related to the restricted

stock units, or RSUs, granted, as a result of the fair value of such grants at the time they were made and the expected vesting periods,

including the RSU grants to our Chief Executive Officer and Executive Chairman, and (2) an increase in directors and officers insurance

premium expenses.

The increase was partially offset by a decrease in payroll expenses related to the entitlement of Mr.

Aberman, our Executive

Chairman, to certain adjustment fees pursuant to his amended consulting agreement recorded in the three months ended September 30, 2020.

The increase is mainly attributed to an increase in share-based compensation expenses related to granted restricted

stock units, or RSUs, an increase in payroll expenses related to payroll adjustments, an increase in head count in general and administrative

departments and the strength of the NIS against the U.S.

General and administrative

expenses for the three-month period ended December 31, 2021 decreased by 16% from $5,097,000 for the three-month period ended December

31, 2020 to $4,288,000.

The decrease is mainly attributed to a decrease in share-based compensation expenses related to granted RSUs.

The decrease was partially offset by an increase in payroll expenses related to new employees and payroll adjustments, and provision for

losses due to cyber event as mentioned in the Risk Factors below.

Financial Income

Financial income decreased

from a financial income of $301,000 for the three-month period ended September 30, 2020 to a financial income of $263,000 for the three-month

period ended September 30, 2021.

This decrease is mainly attributable to decrease in income from exchange rate differences, partially

offset by an increase in interest income as a result of an increase in deposits.

from a financial income of $947,000 for the six-month period ended December 31, 2020 to a financial income of $419,000 for the six-month

period ended December 31, 2021.

This decrease is mainly attributable to a decrease in income from exchange rate differences on deposits

linked to the NIS, partially offset by an increase in interest income on deposits linked to the Euro.

Financial income decreased

from a financial income of $646,000 for the three-month period ended December 31, 2020 to a financial income of $156,000 for the three-month

period ended December 31, 2021.

This decrease is mainly attributable to a decrease in income from exchange rate differences on deposits

linked to the NIS, partially offset by an increase in interest income on deposits linked to the Euro.

Financial Expenses

Financial expenses increased

from a financial expense of $53,000 for the three-month period ended September 30, 2020 to a financial expense of $254,000 for the three-month

period ended September 30, 2021.

from financial expense of $179,000 for the six-month period ended December 31, 2020 to financial expenses of $555,000 for the six-month

period ended December 31, 2021.

This increase is mainly attributable to interest expenses related to the EIB loan provided to us pursuant

to the EIB Finance Agreement.

Net loss for the three-month

period ended September 30, 2021 was $11,432,000 as compared to net loss of $8,489,000 for the three-month period ended September 30, 2020.

The increases in net loss were mainly due to increases in research and development expenses and general and administrative expenses, as

described above.

Net loss per share for the three-month period ended September 30, 2021 was $0.36 as compared to $0.33 for the three-month

period ended September 30, 2020.

For the three-month periods

ended September 30, 2021 and September 30, 2020, we had weighted average common shares outstanding of 32,000,789 and 25,535,593, respectively,

which were used in the computations of net loss per share for the three-month periods.

Financial expenses increased

from a financial expense of $126,000 for the three-month period ended December 31, 2020 to financial expenses of $301,000 for the three-month

period ended December 31, 2021.

This increase is mainly attributable to interest expenses related to the EIB loan provided to us pursuant

to the EIB Finance Agreement.

Net loss for the six and three-month

periods ended December 31, 2021 was $22,372,000 and $10,940,000 respectively, as compared to net loss of $21,043,000 and $12,554,000 for

the six and three-month periods ended December 31, 2020.

For the six-month period, the increase was mainly due to increases in general

and administrative expenses, and for the three-month period the decrease was due to a decrease in general and administrative expenses

and research and development expenses, as described above.

Net loss per share for the six and three-month periods ended December 31, 2021

was $0.70 and $0.34 as compared to $0.82 and $0.49 for the six and three-month periods ended December 31, 2020.

For the six and three-month

periods ended December 31, 2021 and December 31, 2020, we had weighted average common shares outstanding of 32,068,271, 32,136,352, and

25,599,008, 25,662,752, respectively, which were used in the computations of net loss per share for the six and three-month periods.

increase in weighted average common shares outstanding reflects the issuance of additional shares mainly related to the issuances of shares

4 unchanged sentences

Liquidity and Capital Resources

As of September 30, 2021,

our total current assets were $62,826,000 and total current liabilities were $10,365,000.

On September 30, 2021, we had a working capital

surplus of $52,461,000, shareholders’ equity of $48,907,000 and an accumulated deficit of $341,453,000.

As of December 31, 2021, our

total current assets were $60 , 153,000 and total current liabilities were $9 , 595,000.

On December 31, 2021, we had a working

capital surplus of $50,558,000, shareholders’ equity of $39 , 840 , 000 and an accumulated deficit of $352 , 393,000.

Our cash and cash equivalents

as of September 30, 2021 amounted to $14,611,000, compared to $6,625,000 as of September 30, 2020, and compared to $31,241,000 as of June

Cash balances changed in the three months ended September 30, 2021 and 2020 for the reasons presented below.

as of December 31, 2021 amounted to $18,715,000, compared to $7,824,000 as of December 31, 2020, and compared to $31,241,000 as of June

Cash balances changed in the six months ended December 31, 2021 and 2020 for the reasons presented below.

Operating activities used

cash of $8,789,000 in the three months ended September 30, 2021, compared to $6,141,000 in the three months ended September 30, 2020.

Cash used in operating activities in the three months ended September 30, 2021 and 2020 consisted primarily of payments of fees to our

suppliers, subcontractors, professional services providers and consultants, including the costs of our clinical studies, and payments

of salaries to our employees, partially offset by grants from the IIA, the EU’s Horizon 2020 program, Israel’s Ministry of

Economy and other research grants.

Investing activities used

cash of $7,240,000 in the three months ended September 30, 2021, compared to cash provided of $4,199,000 for the three months ended September

The investing activities in the three-month period ended September 30, 2021 consisted primarily of the investment of $12,084,000

in short-term deposits and payments of $15,000 related to investment in property and equipment, partially offset by the withdrawal of

$4,859,000 of long-term deposits.

The investing activities in the three-month period ended September 30, 2020 consisted primarily of the

withdrawal of $3,754,000 of short-term deposits and the withdrawal of $522,000 of long-term deposits, partially offset by payments of

cash of $18 , 652,000 in the six months ended December 31, 2021, compared to $13 , 984,000 in the six months ended December

The increase is manly attributed to payments made to our suppliers, an increase in payments to our employees and the strength

of the NIS against the U.S.

Cash used in operating activities in the six months ended December 31, 2021 and 2020 consisted primarily

of payments of fees to our suppliers, subcontractors, professional services providers and consultants, including the costs of our clinical

studies, and payments of salaries to our employees, partially offset by grants from the IIA, the EU’s Horizon 2020 program, Israel’s

Ministry of Economy and other research grants.

Investing activities provided

cash of $7,075,000 in the six months ended December 31, 2021, compared to cash provided of $11,771,000 for the six months ended December

The investing activities in the six-month period ended December 31, 2021 consisted primarily of the withdrawal of $12,658,000

of long-term deposits, partially offset by the investment of $5,539,000 in short-term deposits and payments of $44,000 related to investments

in property and equipment.

The investing activities in the six-month period ended December 31, 2020, consisted primarily of the withdrawal

of $2 , 445,000 of short-term deposits and the withdrawal of $9,533,000 of long-term deposits, partially offset by payments of $207,000

related to investment in property and equipment.

Financing activities did not

generate cash during the three months ended September 30, 2021, compared to $300,000 for the three months ended September 30, 2020.

cash generated in the three months ended September 30, 2020 from financing activities was related to net proceeds of $300,000 from the

exercise of warrants.

generate cash during the six months period ended December 31, 2021, compared to $1,284,000 for the six months ended December 31, 2020.

The cash generated in the six months ended December 31, 2020 from financing activities was related to net proceeds of $920,000 related

to issuances made under the ATM Agreement and net proceeds of $364,000 from the exercise of warrants.

On July 16, 2020, we entered

6 unchanged sentences

of approximately $8,506,000.

During the three-months ended September 30, 2021, we did not sell any of our common shares under the

During the six-months ended December 31, 2021, we did not sell any of our common shares under the

ATM Agreement.

12 unchanged sentences

be repaid on June 1, 2026 and bears annual interest of 4% to be paid together with the principal of the loan.

As of September 30, 2021,

As of December 31, 2021,

the interest accrued was in the amount of $522,000 (€462,000).

3 unchanged sentences

In the absence of such sales, no payment

Through September 30, 2021, total grants obtained from the IIA aggregated to approximately $27,743,000 and total royalties

Through December 31, 2021, total grants obtained from the IIA aggregated to approximately $27,743,000 and total royalties

paid and accrued amounted to $169,000.

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CRISPR-IL is funded by the IIA with a total budget of approximately

$10,000,000 of which, an amount of approximately $480,000 is a direct grant allocated to us, for the initial period of 18 months.

Through September 30,

2021, we received total grants of approximately $443,000 in cash from the IIA pursuant to the CRISPR-IL consortium program, out of which

an amount of $42,000 was received during the three-months ended September 30, 2021.During October 2021, we received an approval for an

additional grant of approximately $583,000 from the IIA pursuant to the CRISPR-IL consortium program, for an additional period of 18 months.

$10,000,000 of which, an amount of approximately $480,000 was a direct grant allocated to us, for the initial period of 18 months.

October 2021, we received an approval for an additional grant of approximately $583,000 from the IIA pursuant to the CRISPR-IL consortium

program, for an additional period of 18 months.

December 31, 2021, we received total grants of approximately $646,000 in cash from the IIA pursuant to the CRISPR-IL consortium program,

out of which an amount of $245,000 was received during the six-months ended December 31, 2021.

The currency of our financial

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- “Quantitative and Qualitative Disclosures about Market Risk” in the 2021 Annual

Report on form 10-K for the fiscal year ended June 30, 2021.

We have an effective Form

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to purchase common shares, and units of two or more of such securities in one or more offerings up to a total dollar amount of $250,000,000.

As of November 4, 2021, other than the $75,000,000 of common shares we are eligible to sell pursuant to the ATM Agreement, and the $30,000,000

of common shares we sold in the registered direct offering in February 2021, no securities have been sold pursuant to our effective Form

As of February 4, 2022, other than the $75,000,000 of common shares we are eligible to sell pursuant to the ATM Agreement, and the $30,000,000

of common shares we sold in a registered direct offering in February 2021, no securities have been sold pursuant to our effective Form

S-3 registration statement.

15 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis