Pluri Inc. 10-Q

Item 1. Financial Statements. PLURI INC. AND ITS SUBSIDIARIES INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As of March 31, 2024 U.S. DOLLARS IN THOUSANDS (Unaudited) INDEX Page Interim Condensed Consolidated Balance Sheets 1-2 Interim Condensed Consolidated Statements of Operations 3 Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit) 4-5 Interim Condensed Consolidated Statements of Cash Flows 6-7 Notes to Interim Condensed Consolidated Financial Statements 8-14 i PLURI INC. AND ITS SUBSIDIARIES INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) U.S. Dollars in thousands (except share and per share data) Note March 31, 2024 June 30, 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 7,081 $ 5,360 Short-term bank deposits 18,926 34,811 Restricted cash 273 269 Prepaid expenses and other current assets 1,087 969 Total current assets 27,367 41,409 LONG-TERM ASSETS: Restricted bank deposits 637 627 Severance pay fund 459 439 Property and equipment, net 769 688 Operating lease right-of-use asset 7,151 7,633 Long-term deposit and other long-term assets 7 1 Total long-term assets 9,023 9,388 Total assets $ 36,390 $ 50,797 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 PLURI INC. AND ITS SUBSIDIARIES INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) U.S. Dollars in thousands (except share and per share data) Note March 31, 2024 June 30, 2023 LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) CURRENT LIABILITIES Trade payables $ 1,030 $ 1,812 Accrued expenses 958 1,209 Operating lease liability 675 627 Accrued vacation and recuperation 810 873 Advances from customers 101 7 Other accounts payable 952 1,093 Total current liabilities 4,526 5,621 LONG-TERM LIABILITIES Accrued severance pay 611 598 Operating lease liability 5,343 5,748 Loan from the European Investment Bank (“EIB”) 4 24,065 23,530 Total long-term liabilities 30,019 29,876 COMMITMENTS AND CONTINGENCIES 3 SHAREHOLDERS’ EQUITY (DEFICIT) Share capital (**): 5 Common shares, $ 0.00001 par value per share: Authorized: 37,500,000 as of March 31, 2024, and June 30, 2023; Issued and outstanding: 5,228,737 and 5,155,687 shares as of March 31, 2024, and June 30, 2023, respectively * * Additional paid-in capital 414,387 412,939 Accumulated deficit ( 414,743 ) ( 399,584 ) Total shareholders’ (deficit) equity ( 356 ) 13,355 Non-controlling interests 2,201 1,945 Total equity 1,845 15,300 Total liabilities and equity $ 36,390 $ 50,797 (*) Less than $1 (**) See note 1d regarding reverse stock split The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 PLURI INC. AND ITS SUBSIDIARIES INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) U.S. Dollars in thousands (except share and per share data) Nine months ended March 31 Three months ended March 31, 2024 2023 2024 2023 Revenues $ 230 $ 176 $ 71 $ 87 Operating expenses: Research and development expenses $ ( 10,066 ) $ ( 13,412 ) $ ( 3,362 ) $ ( 4,333 ) Less: participation by the National Institute of Allergy and Infectious Diseases (“NIAID”), the Israeli Innovation Authority (“IIA”), Horizon Europe and other parties 1,015 1,189 268 166 Research and development expenses, net ( 9,051 ) ( 12,223 ) ( 3,094 ) ( 4,167 ) General and administrative expenses ( 7,303 ) ( 8,655 ) ( 2,511 ) ( 3,020 ) Operating loss ( 16,124 ) ( 20,702 ) ( 5,534 ) ( 7,100 ) Interest expenses ( 648 ) ( 623 ) ( 218 ) ( 217 ) Other financial income (expenses), net 1,290 ( 956 ) 362 ( 441 ) Total financial income (expenses), net 642 ( 1,579 ) 144 ( 658 ) Net loss $ ( 15,482 ) $ ( 22,281 ) $ ( 5,390 ) $ ( 7,758 ) Net loss attributed to non-controlling interest $ ( 323 ) $ ( 419 ) $ ( 97 ) $ ( 134 ) Net loss attributed to shareholders $ ( 15,159 ) $ ( 21,862 ) $ ( 5,293 ) $ ( 7,624 ) Loss per share: Basic and diluted net loss per share $ ( 2.92 ) $ ( 5.04 ) $ ( 1.01 ) $ ( 1.52 ) Weighted average number of shares used in computing basic and diluted net loss per share (**) 5,193,808 4,402,130 5,221,162 4,993,451 (**) See note 1d regarding reverse stock split The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 PLURI INC. AND ITS SUBSIDIARIES INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) (UNAUDITED) U.S. Dollars in thousands (except share and per share data) Shareholders’ Equity Common Shares Additional Paid-in Accumulated Total Shareholders’ Non-controlling Total Shares (**) Amount Capital Deficit Equity Interests Equity Balance as of July 1, 2022 4,063,437 $ (* ) $ 401,302 $ ( 371,263 ) $ 30,039 $ 2,147 $ 32,186 Share-based compensation to employees, directors, and non-employee consultants 51,104 (* ) 2,224 - 2,224 718 2,942 Issuance of common shares and warrants related to December 2022 private placement, net of issuance costs of $ 435 1,019,487 (* ) 8,034 - 8,034 - 8,034 Modification of warrants to non-controlling interests - - ( 385 ) - ( 385 ) 385 - Expiration of warrants in Ever After - - 1,014 - 1,014 ( 1,014 ) - Net loss - - - ( 21,862 ) ( 21,862 ) ( 419 ) ( 22,281 ) Balance as of March 31, 2023 5,134,028 $ (* ) $ 412,189 $ ( 393,125 ) $ 19,064 $ 1,817 $ 20,881 Shareholders’ Equity Common Shares Additional Paid-in Accumulated Total Shareholders’ Non-controlling Total Shares (**) Amount Capital Deficit Equity Interests Equity Balance as of January 1, 2023 4,786,394 $ (* ) $ 408,692 $ ( 385,501 ) $ 23,191 $ 1,775 $ 24,966 Share-based compensation to employees, directors, and non-employee consultants 21,912 (* ) 869 - 869 176 1,045 Issuance of common shares and warrants related to December 2022 private placement, net of issuance costs of $ 74 325,722 (* ) 2,628 - 2,628 - 2,628 Net loss - - - ( 7,624 ) ( 7,624 ) ( 134 ) ( 7,758 ) Balance as of March 31, 2023 5,134,028 $ (* ) $ 412,189 $ ( 393,125 ) $ 19,064 $ 1,817 $ 20,881 (*) Less than $1 (**) See note 1d regarding reverse stock split 4 PLURI INC. AND ITS SUBSIDIARIES INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) (UNAUDITED) U.S. Dollars in thousands (except share and per share data) Shareholders’ Equity (Deficit) Common Shares Additional Paid-in Accumulated Total Shareholders’ Non- controlling Total Shares (**) Amount Capital Deficit Equity (Deficit) Interests Equity Balance as of July 1, 2023 5,155,687 $ (* ) $ 412,939 $ ( 399,584 ) $ 13,355 $ 1,945 $ 15,300 Share-based compensation to employees, directors, and non-employee consultants 73,050 (* ) 1,448 - 1,448 579 2,027 Net loss - - - ( 15,159 ) ( 15,159 ) ( 323 ) ( 15,482 ) Balance as of March 31, 2024 5,228,737 $ (* ) $ 414,387 $ ( 414,743 ) $ ( 356 ) $ 2,201 $ 1,845 Shareholders’ Equity (Deficit) Common Shares Additional Paid-in Accumulated Total Shareholders’ Non- controlling Total Shares (**) Amount Capital Deficit Equity (Deficit) Interests Equity Balance as of January 1, 2024 5,210,003 $ (* ) $ 413,849 $ ( 409,450 ) $ 4,399 $ 2,218 $ 6,617 Share-based compensation to employees, directors, and non-employee consultants 18,734 (* ) 538 - 538 80 618 Net loss - - - ( 5,293 ) ( 5,293 ) ( 97 ) ( 5,390 ) Balance as of March 31, 2024 5,228,737 $ (* ) $ 414,387 $ ( 414,743 ) $ ( 356 ) $ 2,201 $ 1,845 (*) Less than $1 (**) See note 1d regarding reverse stock split The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 PLURI INC. AND ITS SUBSIDIARIES INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) U.S. Dollars in thousands (except share and per share data) Nine months ended March 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 15,482 ) $ ( 22,281 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 192 285 Share-based compensation to employees, directors and non-employee consultants 2,027 2,942 Increase in prepaid expenses, other current assets and other long-term assets ( 124 ) ( 510 ) Decrease in trade payables ( 742 ) ( 393 ) Decrease in other accounts payable and accrued expenses ( 455 ) ( 1,135 ) Increase in advances from customers 94 7 Increase (decrease) in operating lease right-of-use asset and liability, net 125 ( 2 ) Decrease (increase) in interest receivable on deposits 218 ( 786 ) Effect of exchange rate changes on cash, cash equivalents, deposits and restricted cash ( 89 ) 278 Long term interest payable and exchange rate differences relate to EIB loan 535 1,668 Accrued severance pay, net ( 7 ) ( 33 ) Net cash used for operating activities $ ( 13,708 ) $ ( 19,960 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment $ ( 313 ) $ ( 165 ) Proceeds from short-term deposits, net 15,702 5,539 Net cash provided by investing activities $ 15,389 $ 5,374 CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common shares and warrants, net of issuance costs - 8,034 Net cash provided by financing activities $ - $ 8,034 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 PLURI INC. AND ITS SUBSIDIARIES INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) U.S. Dollars in thousands (except share and per share data) Nine months ended March 31, 2024 2023 EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH $ 54 $ ( 278 ) Increase (decrease) in cash, cash equivalents and restricted cash 1,735 ( 6,830 ) Cash, cash equivalents and restricted cash at the beginning of the period 6,256 11,413 Cash, cash equivalents and restricted cash at the end of the period $ 7,991 $ 4,583 Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets: Cash and cash equivalents 7,081 3,677 Restricted cash 273 273 Long-term restricted bank deposits 637 633 Total cash, cash equivalents, restricted cash and restricted bank deposits $ 7,991 $ 4,583 (a) Supplemental disclosure of non-cash activities: Purchase of property and equipment on credit $ 34 $ 87 Accrued expenses related to issuance of common shares and warrants 100 - Lease liabilities arising from obtaining right-of-use assets $ 82 $ - 216 87 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 PLURI INC. AND ITS SUBSIDIARIES NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) U.S. Dollars in thousands (except share and per share amounts) NOTE 1: - GENERAL a. Pluri Inc. (formally known as Pluristem Therapeutics Inc.), a Nevada corporation, was incorporated on May 11, 2001. Pluri Inc.’s common shares trade on Nasdaq Capital Market and Tel Aviv Stock Exchange under the symbol “PLUR”. Pluri Inc. has a wholly owned subsidiary, Pluri-Biotech Ltd. (formerly known as Pluristem Ltd.) (the “Subsidiary”), which is incorporated under the laws of the State of Israel. In January 2020, the Subsidiary established a wholly owned subsidiary, Pluristem GmbH (the “German Subsidiary”) which is incorporated under the laws of Germany. In January 2022, the Subsidiary established a new subsidiary, Ever After Foods Ltd. (“Ever After”) formerly known as Plurinuva Ltd. Ever After is incorporated under the laws of Israel, which followed the execution of the collaboration agreement with Tnuva Food Industries – Agricultural Cooperative in Israel Ltd., through its fully owned subsidiary, Tnuva Food-Tech Incubator (2019), Limited Partnership (“Tnuva”). Pluri Inc., the Subsidiary, the German Subsidiary and Ever After are referred to as the “Company” or “Pluri.” The Subsidiary, the German Subsidiary and Ever After are referred to as the “Subsidiaries.” b. The Company is a bio-technology company with an advanced cell-based technology platform, which operates in one operating segment. The Company has developed a unique three-dimensional technology platform for cell expansion with an industrial scale in-house Good Manufacturing Practice cell manufacturing facility. Pluri currently uses its technology in the field of regenerative medicine, food tech and agtech and recently launched a Contract Development and Manufacturing Organization (“CDMO”) business, and plans to utilize its technology in other industries and verticals that have a need for a mass scale and cost-effective cell expansion platform. Pluri is focused on the research, development and manufacturing of cell-based products and the business development of cell therapeutics and cell-based technologies providing potential solutions for various industries. c. The Company has incurred an accumulated deficit of approximately $ 414,743 and incurred recurring operating losses and negative cash flows from operating activities since inception. As of March 31, 2024, the Company’s total shareholders’ equity deficit amounted to $ 356 . During the nine-month period ended March 31, 2024, the Company incurred losses of $ 15,482 and its negative cash flow from operating activities was $ 13,708 . As of March 31, 2024, the Company’s cash position (cash and cash equivalents, short-term bank deposits, restricted cash and restricted bank deposits) totaled $ 26,917 . The Company plans to continue to finance its operations from its current resources, by entering into licensing or other commercial, and collaboration agreements, by providing CDMO services to clients, from grants and contracts to support its research and development activities and from sales of its equity securities. The Company’s management believes that its current resources, together with its existing operating plan, are sufficient for the Company to meet its obligations as they come due at least for a period of twelve months from the date of the issuance of these condensed consolidated financial statements. There is no assurance, however, that the Company will be able to obtain the adequate level of financial resources that is required for the long-term development and commercialization of its products. d. Reverse stock split In March 2024, the Company’s Board of Directors approved a 1-for-8 reverse stock split of the Company’s (a) authorized common shares; and (b) issued and outstanding common shares. The reverse stock split became effective on April 1, 2024, subsequent to the balance sheet date. All common shares, options, warrants and securities convertible or exercisable into common shares, as well as loss per share, have been adjusted to give retroactive effect to this reverse stock split for all periods presented. 8 PLURI INC. AND ITS SUBSIDIARIES NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) U.S. Dollars in thousands (except share and per share amounts) NOTE 2: - SIGNIFICANT ACCOUNTING POLICIES a. Unaudited Interim Financial Information The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair statement have been included (consisting only of normal recurring adjustments). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2023. The year-end balance sheet data was derived from the audited consolidated financial statements as of June 30, 2023, but not all disclosures required by GAAP are included. Operating results for the nine-month period ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending June 30, 2024. b. Significant Accounting Policies The significant accounting policies followed in the preparation of these interim unaudited condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements. c. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates, judgments and assumptions that are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. d. Fair value of financial instruments The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, restricted cash, short-term bank deposits, long-term bank deposit and restricted bank deposits and other current assets, trade payable and other accounts payable and accrued expenses, approximate their fair value because of their generally short-term maturities. The Company measures its derivative instruments at fair value under Accounting Standards Codification (“ASC”), “Fair Value Measurements and Disclosures” (“ASC 820”). Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level  1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level  2 - Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly; and Level  3 - Unobservable inputs for the asset or liability. 9 PLURI INC. AND ITS SUBSIDIARIES NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) U.S. Dollars in thousands (except share and per share amounts) NOTE 2: - SIGNIFICANT ACCOUNTING POLICIES (CONT.) The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy. On April 30, 2020, the German Subsidiary entered into a finance contract (the “Finance Contract”) with the EIB, pursuant to which the German Subsidiary can obtain a loan in the amount of up to € 50 million, subject to certain milestones being reached (the “Loan”). During June 2021, Pluri received € 20 million under the Finance Contract. The amount received is due on June 1, 2026 , and bears annual interest of 4 % to be paid with the principal of the Loan. The Company measures its liability pursuant to the Finance Contract with the EIB based on the aggregate outstanding amount of the combined principal and accrued interest thereunder. As of March 31, 2024, the Company does not reflect its liability for future royalty payments pursuant to the Finance Contract with the EIB since the accrual liability pertaining to royalties to EIB is immaterial (see also note 4). e. New Accounting Pronouncements i. Recently adopted accounting pronouncements ASU No. 2016-13 - “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”): In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-13, which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans, and other instruments, entities are required to use a new forward-looking “expected loss” model that generally results in the earlier recognition of allowances for losses. The guidance also requires increased disclosures. The amendments contained in ASU 2016-13 were originally effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years for the Company. In November 2019, the FASB issued ASU No. 2019-10, which delayed the effective date of ASU 2016-13 for smaller reporting companies (as defined by the U.S. Securities and Exchange Commission (“SEC”) rules) to fiscal years beginning after December 15, 2022, including interim periods. The guidance requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company meets the SEC definition of a smaller reporting company and adopted the new accounting standard effective July 1, 2023. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. ii. Recently issued accounting pronouncements, not yet adopted ASU No. 2023-07 - “Segment Reporting (Topic 280): Improvements to reportable segment disclosures” (“ASU 2023-07”): In November 2023, the FASB issued ASU 2023-07. This guidance expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition of other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The guidance is effective for the fiscal year beginning after December 15, 2023, and interim periods within the fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures. 10 PLURI INC. AND ITS SUBSIDIARIES NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) U.S. Dollars in thousands (except share and per share amounts) NOTE 2: - SIGNIFICANT ACCOUNTING POLICIES (CONT.) ASU No. 2023-09 - “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”): In December 2023, the FASB issued ASU 2023-09. This guidance is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and regarding income tax paid both in the U.S. and foreign jurisdictions. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption and retroactive application are permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures. NOTE 3: - COMMITMENTS AND CONTINGENCIES a. As of March 31, 2024, an amount of $ 910 of cash and deposits was pledged by the Subsidiary for bank guarantees related to its facility operating lease agreement and to secure its credit line for hedging transactions. b. Under the Law for the Encouragement of Industrial Research and Development, 1984, (the “Research Law”), research and development programs that meet specified criteria and are approved by the IIA are eligible for grants of up to 50 % of the project’s expenditures, as determined by the research committee, in exchange for the payment of royalties from the sale of products developed under the program. Regulations under the Research Law generally provide for the payment of royalties to the IIA of 3 % on sales of products and services derived from a technology developed using these grants until 100 % of the U.S. dollar-linked grant is repaid. The Company’s obligation to pay these royalties is contingent on its actual sale of such products and services. In the absence of such sales, no payment is required. The outstanding balance of the grants will be subject to interest at a rate equal to the 12-month LIBOR (from January 1, 2024, to the 12-month SOFR) applicable to U.S. dollar deposits that is published on the first business day of each calendar year. Following the full repayment of the grant, there is no further liability for royalties. As of March 31, 2024, the Company’s contingent liability in respect to royalties to the IIA amounted to $ 27,746 , not including LIBOR (from January 1, 2024, SOFR) interest as described above. c. In September 2017, the Company signed an agreement with the Tel-Aviv Sourasky Medical Center (Ichilov Hospital) to conduct a Phase I/II trial of PLX-PAD cell therapy for the treatment of Steroid-Refractory Chronic Graft-Versus-Host-Disease (“cGVHD”). As part of the agreement with Ichilov Hospital, the Company will pay royalties of 1 % from its net sales of the PLX-PAD product relating to cGVHD, with a maximum aggregate royalty amount of approximately $ 500 . d. As to royalties to the EIB, see note 4. NOTE 4: - LOAN FROM THE EIB On April 30, 2020, the German Subsidiary entered into a Finance Contract with the EIB, pursuant to which the German Subsidiary can obtain a loan in the amount of up to € 50 million, subject to certain milestones being reached, for a period of 36 months from the signing of the Finance Contract. During June 2021, Pluri received € 20 million of the Finance Contract. The amount received is due on June 1, 2026 , and bears annual interest of 4 % to be paid with the principal of the Loan. As of March 31, 2024, the linked principal balance in the amount of $ 21,620 and the interest accrued in the amount of $ 2,445 are presented among long-term liabilities. Since the project period ended on December 31, 2022, the Company does not expect to receive additional funds pursuant to the Finance Contract. In addition to interest payable on the Loan, the EIB is entitled to receive royalties from revenues for a period of seven years starting at the beginning of fiscal year 2024 and continuing up to and including its fiscal year 2030 in an amount equal to between 0.2 % to 2.3 % of the Company’s consolidated revenues, pro-rated to the amount disbursed from the Loan. As of March 31, 2024, the accrual liability pertaining to royalties to EIB is immaterial. The Finance Contract also contains certain limitations such as the use of proceeds received from the EIB, limitations related to disposal of assets, substantive changes in the nature of the Company’s business, changes in holding structure, distributions of future potential dividends and engaging with other banks and financing entities for other loans. 11 PLURI INC. AND ITS SUBSIDIARIES NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) U.S. Dollars in thousands (except share and per share amounts) NOTE 5: - SHAREHOLDERS’ EQUITY Between December 13, 2022 and December 27, 2022, the Company entered into a series of securities purchase agreements with several purchasers for an aggregate of 1,019,488 common shares and warrants, (the “Warrants”) to purchase up to 1,019,488 common shares (the “December 2022 Private Placement”). On December 13, 2022, the Company executed securities purchase agreements to sell, at a purchase price of $ 8.24 per share, up to 697,486 common shares and Warrants to purchase up to 697,486 common shares, with an exercise price of $ 8.24 per share and a term of three years . On December 14, 2022, the Company executed securities purchase agreements to sell, at a purchase price of $ 8.4 per share, up to 258,565 common shares and Warrants to purchase up to 258,565 common shares, with an exercise price of $ 8.4 per share and a term of three years . On December 15, 2022, the Company executed securities purchase agreements to sell, at a purchase price of $ 8.48 per share, up to 29,688 common shares and Warrants to purchase up to 29,688 common shares, with an exercise price of $ 8.48 per share and a term of three years . On December 19, 2022, the Company executed a securities purchase agreement to sell, at a purchase price of $ 8.72 per share, up to 16,875 common shares and Warrants to purchase up to 16,875 common shares, with an exercise price of $ 8.72 per share and a term of three years . On December 27, 2022, the Company executed a securities purchase agreement to sell, at a purchase price of $ 8.96 per share, up to 16,875 common shares and Warrants to purchase up to 16,875 common shares, with an exercise price of $ 8.96 per share and a term of three years . The Warrants sold in the December 2022 Private Placement are exercisable upon the later of six months from their issuance date, or from the date the Company increased its authorized shares. The Company issued 1,019,488 common shares and Warrants that relate to the December 2022 Private Placement and received $ 8,034 as of that date net of $ 435 from issuance expenses. On August 31, 2023, and as amended and restated as of October 9, 2023, Ever After entered into a Simple Agreement for Future Equity (the “SAFE Agreement”) with an investor. Pursuant to the terms of the SAFE Agreement, Ever After will receive an aggregate amount of $ 2,500 (the “SAFE Amount”). As of December 31, 2023, the SAFE Agreement had been terminated and the SAFE Amount was not received. Pursuant to a shelf registration on Form S-3 declared effective by the SEC on September 21, 2023, on February 13, 2024 the Company entered into an Open Market Sales Agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners (“A.G.P.”) which provides that, upon the terms and subject to the conditions and limitations in the Sales Agreement, the Company may elect, from time to time, to offer and sell common shares having an aggregate offering price of up to $ 10,000 through A.G.P. acting as sales agent. During April 2024, and after the balance sheet date, the Company sold 42,729 common shares under the Sales Agreement at an average price of $ 5.93 per share. a. Options to consultants: A summary of the share options to non-employee consultants under equity incentive plans of Pluri Inc. is as follows: Nine months ended March 31, 2024 Number (**) Weighted Average Exercise Price Weighted Average Remaining Contractual Terms (in years) Aggregate Intrinsic Value Price Share options outstanding at the beginning of the period 8,100 $ 7.44 6.24 $ 234 Share options granted 9,375 4.40 4.81 156 Share options outstanding at the end of the period 17,475 $ 5.80 5.12 $ 390 Share options exercisable at the end of the period 8,100 $ 7.41 5.49 $ 234 Share options unvested at the end of the period 9,375 4.40 4.81 156 (**) See note 1d regarding reverse stock split Compensation expenses recorded in general and administrative expenses related to options granted to consultants for the nine months ended March 31, 2024 and 2023 were $ 5 and $ 5 , respectively. Compensation expenses recorded in general and administrative expenses related to options granted to consultants for the three months ended March 31, 2024 and 2023 were $ 4 and $ 1 , respectively. 12 PLURI INC. AND ITS SUBSIDIARIES NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) U.S. Dollars in thousands (except share and per share amounts) NOTE 5: - SHAREHOLDERS’ EQUITY (CONT.) b. Options to the Chief Executive Officer and Director: A summary of the share options granted to the Chief Executive Officer and Director under equity incentive plans of Pluri Inc. is as follows: Nine months ended March 31, 2024 Number (**) Weighted Average Exercise Price Weighted Average Remaining Contractual Terms (in years) Share options outstanding at the beginning of the period 229,353 $ 15.20 3.47 Share options granted 12,500 6.08 6.91 Share options outstanding at the end of the period 241,853 $ 14.77 2.69 Share options exercisable at the end of the period 235,603 $ 15.00 2.58 Share options unvested 6,250 $ 6.08 7.16 Share options vested and expected to vest at the end of the period 241,853 $ 14.77 2.69 (**) See note 1d regarding reverse stock split As of March 31, 2024, the aggregate intrinsic value of these options was $ 0 . Compensation expenses recorded in general and administrative expenses related to options granted to the Chief Executive Officer and a director for the nine months ended March 31, 2024 and 2023, were $ 223 and $ 310 , respectively. Compensation expenses recorded in general and administrative expenses related to options granted to the Chief Executive Officer and a director for the three months ended March 31, 2024 and 2023, were $ 10 and $ 310 , respectively. c. Restricted Stock (“RS”) and Restricted Stock Units (“RSUs”) to employees, directors, officers and consultants: 1. RSUs to employees and directors: The following table summarizes the activity related to RSUs granted to employees, directors and officers under equity incentive plans of Pluri Inc. for the nine-month periods ended March 31, 2024 and 2023: Nine months ended March 31, 2024 2023 Number (**) Unvested at the beginning of the period 207,199 241,877 Granted 395,150 41,853 Forfeited ( 129,622 ) ( 6,424 ) Vested ( 55,121 ) ( 48,448 ) Unvested at the end of the period 417,606 228,858 Expected to vest after the end of the period 378,911 226,414 (**) See note 1d regarding reverse stock split 13 PLURI INC. AND ITS SUBSIDIARIES NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) U.S. Dollars in thousands (except share and per share amounts) NOTE 5: - SHAREHOLDERS’ EQUITY (CONT.) Compensation expenses related to RSUs granted to employees, directors and officers were recorded as follows: Nine months ended March 31, Three months ended March 31, 2024 2023 2024 2023 Research and development expenses $ 172 $ 35 $ 110 $ ( 82 ) General and administrative expenses 931 1,725 371 586 $ 1,103 $ 1,760 $ 481 $ 504 As of March 31, 2024, unamortized compensation expenses related to RSUs granted to employees, directors and officers by Pluri Inc. are approximately $ 3,801 , to be recognized by the end of January 2027. 2. RS and RSUs to consultants: The following table summarizes the activity related to RS and RSUs granted to consultants for the nine-month periods ended March 31, 2024 and 2023: Nine months ended March 31, 2024 2023 Number (**) Unvested at the beginning of the period 2,500 5,157 Granted 19,831 - Vested ( 17,929 ) ( 2,657 ) Unvested at the end of the period 4,402 2,500 (**) See note 1d regarding reverse stock split Compensation expenses related to RS and RSUs granted to consultants by Pluri Inc. were recorded as follows: Nine months ended March 31, Three months ended March 31, 2024 2023 2024 2023 Research and development expenses $ - $ 1 $ - $ 1 General and administrative expenses 117 148 43 55 $ 117 $ 149 $ 43 $ 56 14