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Item 7. Management’s Discussion and Analysis

2024-09-18 compared with 2023-09-12 · 283 added, 237 removed, 71 unchanged (88% of the section changed)

4 unchanged sentences

scale in-house GMP cell manufacturing facility.

We are utilizing our technology in the field of regenerative medicine and food tech and

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

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 inflammatory, muscle injuries and hematologic conditions.

Our 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 are utilizing our technology in the field of regenerative medicine, food tech, CDMO,

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

via partnerships, joint ventures, licensing agreements and other types of collaborations.

Our operations are focused

on the research, development and manufacturing of cells and cell-based products, conducting clinical studies and the business development

of cell therapeutics and cell-based technologies, such as our collaboration with Tnuva to use our technology to establish a cultivated

food platform, as well as the collaboration agreement we signed in 2022 with a leading European manufacturer of APIs to use our expansion

technology, which aims to revolutionize the production of biologics by enabling a cost-effective, sustainable and cruelty-free ingredient.

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.

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 inflammatory, muscle injuries, hematologic conditions and, most recently, we have also launched a novel immunotherapy platform.

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.

In the pharmaceutical area,

we have focused on several indications utilizing our product candidates, including, but not limited to, muscle recovery following surgery

for hip fracture, incomplete recovery following bone marrow transplantation CLI Chronic Graft versus Host Disease and a potential treatment

Some of these studies have been completed while others are still ongoing.

We believe that each of these indications is a severe

unmet medical need.

for hip fracture, incomplete recovery following bone marrow transplantation, CLI, Chronic GvHD and a potential treatment for H-ARS.

of these studies have been completed while others are still ongoing.

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

In July 2023, we announced

that we signed a three-year $4.2 million contract with the NIAID, which is part of the NIH.

Pluri will collaborate with the U.S.

of Defense’s Armed Forces Radiobiology Research Institute, or AFRRI, and the Uniformed Services University of Health Sciences, or

USUHS, in Maryland, U.S.A., to further advance the development of its PLX-R18 cell therapy as a potential novel treatment for H-ARS, a

deadly disease that can result from nuclear disasters and radiation exposure.

In the food tech field, we

established a new venture with Tnuva, Ever After Foods .

Ever After Foods is developing cultivated meat products based on Pluri’s

platform 3D cell expansion technology.

OF OPERATIONS – YEAR ENDED JUNE 30, 2023 COMPARED TO YEAR ENDED JUNE 30, 2022.

for the year ended June 30, 2023 were $287,000, compared to $234,000 for the year ended June 30, 2022.

The revenues in the year ended

June 30, 2023 were mainly related to our API Collaboration and the revenues in the year ended June 30, 2022 were related to the revenue

derived from our license agreement with Takeda and the sale of our PLX cells for research use.

and Development, Net

Under such contract, we will collaborate with

the AFRRI and the USUHS, to further advance the development of our PLX-R18 cell therapy as a potential novel treatment for H-ARS, a deadly

disease that can result from nuclear disasters and radiation exposure.

2024, we launched a novel immunotherapy platform utilizing MAIT cells specifically designed to address solid tumors – a critical

area in medicine where effective treatments are currently insufficient.

We believe that our MAIT cells, isolated from the human placenta ,

offer substantial potential benefits compared to conventional T cells.

Placental MAIT cells are potent effector cells,

potentially targeting tumors through multiple mechanisms while expressing high levels of various chemokine receptors, which facilitate

their migration directly to tumor sites.

Furthermore, unlike conventional autologous T-cells typically collected from peripheral blood,

our MAIT cells are designed to be allogenic universal product.

Benefiting with very restricted TCR, the MAIT cells minimizes their likelihood

of inducing Graft versus Host Disease, or GvHD, a significant advantage over other potential allogeneic products.

We are designing the

MAIT to potentially show better persistence in the body for a longer duration, enhancing their therapeutic efficacy.

In January 2024, we

announced that we are launching a new business division offering cell therapy manufacturing services as a CDMO:

offers CDMO services to companies from early preclinical development, through late-stage clinical trials and commercialization, with a

mission to deliver high-quality, essential therapies to patients.

We have signed several agreements with clients and generating revenues

from PluriCDMO™.

are actively involved in several initiatives leveraged by Pluri’s 3D cell expansion in the agtech field, such as:

(a) cell-based

coffee business activity through PluriAgtech business vertical, which we announced in January 2024, (b) an innovative POC collaboration

with ICL Group, a leading global specialty minerals company, to revolutionize bio stimulant delivery and enhance yield sustainably, and

(c) a strategic POC agreement with a leading international agriculture corporation which is intended to boost the global vegetable product

supply, streamline supply chains, and combat global climate change while ensuring a natural and more sustainable future for agriculture.

In 2022, we announced the

establishment of a joint venture with Tnuva, Ever After Foods, which is incorporated under the laws of the State of Israel, with the purpose

of developing cultivated meat product of all kinds and types.

Leveraging Pluri’s innovative

technology, Ever After Foods has rapidly advanced its scalable production platform, developing a B2B version of its proprietary technology

system, Ever After Foods has demonstrated the natural production of muscle and fat tissues for various animal cells, ensuring taste, feel,

and texture akin to conventional animal-derived meat.

June 12, 2024, we entered into a share purchase agreement, or the Agreement, by and among Ever After Foods, Tnuva, and certain other international

investors, or, collectively, the Investors, pursuant to which Ever After Foods issued and sold ordinary shares in a private placement

offering, or the Offering, for aggregate gross proceeds of $10 million.

As part of the Offering, we invested $1.25 million.

the Subsidiary and Ever After Foods executed an Amended and Restated Technology License Agreement, dated June 12, 2024, or the Amended

The Amended License amended the parties’ existing license agreement dated as of February 23, 2022, to expand the scope

of the license to include fish and seafood.

$10 million funding round was intended to support Ever After Foods’ B2B technology platform, positioning it as a sustainable technology

Following the closing of the Offering, the Subsidiary holds approximately 69% of Ever After Foods.

RESULTS OF OPERATIONS – YEAR ENDED JUNE 30, 2024 COMPARED

TO YEAR ENDED JUNE 30, 2023

Revenues for the year ended

June 30, 2024 were $326,000, compared to $287,000 for the year ended June 30, 2023.

The revenues in the year ended June 30, 2024 were

mainly related to fees derived from services provided to CDMO clients and to a POC collaboration with ICL Group in the agtech field.

revenues in the year ended June 30, 2023 were mainly related to our collaboration in the biologic field.

The increase in revenues is mainly

attributed to the launch of new business verticals, specifically in the CDMO and agtech fields.

Research and Development, Net

Research and development,

net (costs less participation and grants by the IIA, Horizon 2020, Horizon Europe and other parties) decreased by 35% from $24,377,000

for the year ended June 30, 2022, to $15,745,000 for the year ended June 30, 2023.

net (costs less participation by the IIA, Horizon Europe and the NIAID) decreased by 21% from $15,745,000 for the year ended June 30,

2023, to $12,446,000 for the year ended June 30, 2024.

The decrease is mainly attributed to:

(1) a decrease

in clinical studies expenses following the completion of our CLI and ARDS associated with COVID-19 studies and the end of enrollment of

our muscle regeneration following hip fracture study in November 2021, (2) a decrease in material purchases in accordance with our manufacturing

needs and plans, (3) a decrease in salaries and related expenses as part of our efficiency cost-reduction plan , specifically a reduction

of 22 research and development, or R&D, employees in Pluri Biotech Ltd.

(108 on June 30, 2023, compared to 130 on June 30, 2022),

(4) a decrease in share-based compensation expenses and (5) higher participation by the European Union with respect to the Horizon 2020

grants, which relate to our CLI and muscle regeneration following hip fracture studies.

and Administrative

(1) a decrease in clinical studies expenses

following the completion of our CLI, COVID-19 and muscle regeneration following hip fracture clinical studies, (2) a decrease in material

purchases in accordance with our manufacturing needs and plans, (3) a decrease in salaries and related expenses as part of a efficiency

cost-reduction plan, specifically a reduction of 16 research and development, or R&D, employees in the Subsidiary (92 employees on

June 30, 2024, compared to 108 employees on June 30, 2023) and due to the exchange rate differences related to the strength of the U.S.

dollar against the NIS, and (4) participation grants from the NIAID contract, offset by a decrease in other participation grants, specifically

the completion of the CLI and muscle regeneration following hip fracture clinical studies which were supported by the EU Horizon 2020

General and Administrative

expenses decreased by 32% from $17,450,000 for the year ended June 30, 2022, to $11,779,000 for the year ended June 30, 2023.

is mainly attributed to a decrease in share-based compensation expenses related to market based vesting conditioned restricted stock units,

or RSUs, granted to our CEO and Chairman, a decrease in share-based compensation expenses related to the allocation of shares of

Ever After Foods to our CEO, Chief Financial Officer, or CFO, and Chairman of our Board pursuant to their employment or consulting agreements,

employee terminations and RSU expense amortization over time (see also notes 1e and 9c to the consolidated financial statements included

elsewhere in this Annual Report).

These decreases were partially offset by an increase in share-based compensation expenses related to

the amount of RSUs and options granted to our CEO.

Financial Income (Expense), Net

financial income (expenses), net decreased from $219,000 in financial income for the year ended 2022 to $1,641,000 in financial expenses

for the year ended June 30, 2023.

This decrease is mainly attributable to (1) expenses relating to exchange rate differences related to

the EIB loan provided to us in June 2021 pursuant to EIB Finance Agreement (as a result of the strength of the Euro against the U.S.

which increased by 5% in 2023 compared to 2022 where it decreased by 7%), and (2) a decrease due to exchange rate expenses on a lease

liability due to the strength of the U.S Dollar against the NIS which resulted in an expense of $690,000.

The decrease in financial income

(expense) was partially offset by an increase related to interest income from bank deposits.

Loss for the Year

loss decreased from $41,374,000 for the year ended June 30, 2022 to $28,887,000 for the year ended June 30, 2023.

The decrease was mainly

due to a decrease in R&D expenses, net, and a decrease in general and administrative expenses for the reasons mentioned above.

had a net loss attributed to our non-controlling interest in Ever After Foods for the year ended June 30, 2023 of $566,000.

administrative expenses decreased by 15% from $11,779,000 for the year ended June 30, 2023, to $10,034,000 for the year ended June

The decrease is mainly attributed to:

(1) a decrease in share-based compensation expenses related to employee terminations

and RSU expense amortization over time (see also notes 9c to the consolidated financial statements included elsewhere in this Annual

Report) and a decrease due to the amount of RSUs and options granted to our CEO in 2023, partially offset by an increase in

share-based compensation expenses related to the amount of RSUs and options granted in 2024, and (2) a decrease in salaries and related

expenses due to the exchange rate differences relates to the strength of the U.S.

dollar against the NIS and as a result of our cost

reduction and efficiency plan, including a temporary reduction in the salaries of our executive officers.

Total Financial Income (Expense), Net

financial income (expenses), net increased from $1,641,000 in financial expenses for the year ended 2023 to $814,000 in financial

income for the year ended June 30, 2024.

This increase is mainly attributable to (1) income relating to exchange rate differences

related to the EIB loan provided to us in June 2021 pursuant to the EIB Finance Agreement (as a result of the strength of the U.S.

dollar against the Euro, which increased by 3% in 2024 compared to 2023 where it decreased by 5%), (2) an increase related to

interest income from bank deposits, and (3) an increase in gain from hedging transactions compared to a loss from hedging

transactions in the previous period.

Net Loss for the Year

Net loss decreased from $28,887,000

for the year ended June 30, 2023 to $21,344,000 for the year ended June 30, 2024.

The decrease was mainly due to a decrease in R&D

expenses, net, a decrease in general and administrative expenses and an increase in financial income (expense), net for the reasons mentioned

We had a net loss attributed to our non-controlling interest in Ever After Foods for the year ended June 30, 2024 and June 30,

2023 of $456,000 and $566,000, respectively.

Loss per share for the year

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issuance of additional shares during fiscal year 2024.

increase in weighted average common shares outstanding reflects the issuance of additional shares pursuant to a private placement offering

we conducted in December 2022, or the December 2022 Private Placement, and the issuance of additional shares upon the vesting of RSUs

issued to directors, employees and consultants.

and Capital Resources

of June 30, 2023, our total current assets were $41,409,000 and our total current liabilities were $5,621,000.

On June 30, 2023, we had

a working capital surplus of $35,788,000 and an accumulated deficit of $399,584,000.

of June 30, 2022, our total current assets were $57,747,000 and our total current liabilities were $6,829,000.

On June 30, 2022, we had

a working capital surplus of $50,918,000 and an accumulated deficit of $371,263,000.

Our cash, cash equivalents

and restricted cash as of June 30, 2023, amounted to $5,629,000, which reflects a decrease of $5,150,000 from the $10,779,000 reported

Liquidity and Capital Resources

As of June 30, 2024, our total

current assets were $31,107,000 and our total current liabilities were $4,454,000.

On June 30, 2024, we had a working capital surplus

of $26,653,000 and an accumulated deficit of $420,472,000.

As of June 30, 2023, our total

current assets were $41,409,000 and our total current liabilities were $5,621,000.

On June 30, 2023, we had a working capital surplus

of $35,788,000 and an accumulated deficit of $399,584,000.

Our cash, cash

equivalents and restricted cash as of June 30, 2024, amounted to $7,037,000, which reflects an increase of $1,408,000 from the

$5,629,000 reported as of June 30, 2023.

Our cash equivalents and restricted cash increased in the year ended June 30, 2024, for the

reasons presented below.

Our bank deposits and restricted bank deposits as of June 30, 2024, amounted to $23,836,000 compared to

$35,438,000 as of June 30, 2023.

Our bank deposits as of June 30, 2023, amounted to $34,811,000 compared to $45,244,000 as of June 30, 2022.

equivalents and restricted cash decreased in the year ended June 30, 2023, for the reasons presented below.

Our bank deposits and restricted bank deposits as of June 30, 2024, decreased in the year ended

June 30, 2024, for the reasons presented below.

Our cash used in operating

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used in operating activities is mainly attributed to a decrease in net loss following the completion of certain clinical trials and the

implementation of our cost reduction and efficiency plan that we initiated to align with the change in our business strategy.

in operating activities in year ended June 30, 2023 and June 30, 2022 consisted primarily of payments of fees to our suppliers, subcontractors,

professional services providers and consultants, and payments of salaries to our employees, partially offset by grants from the IIA, the

EU’s Horizon 2020, Horizon Europe and 2022 programs, Israel’s Ministry of Economy and other research grants.

implementation of a cost reduction and efficiency plan including a temporary reduction in the salaries of our executive officers, directors,

management team and other employees.

Cash used in operating activities in year ended June 30, 2024 and June 30, 2023 consisted primarily

of payments of fees to our suppliers, subcontractors, professional services providers and consultants, and payments of salaries to our

employees, partially offset by grants from the IIA, the Horizon Europe program, and funds received from the NIAID contract.

Cash provided by investing

activities was $9,698,000 during the year ended June 30, 2023, as opposed to cash provided for investing activities of $11,783,000 during

the year ended June 30, 2022.

Cash provided by investing activities in the year ended June 30, 2023 consisted primarily of the withdrawal

of $9,960,000 of short-term deposits, partially offset by payments of $262,000 related to investments in property and equipment.

provided by investing activities in the year ended June 30, 2022, consisted primarily of a withdrawal of $12,063,000 of short-term deposits

partially offset by payments of $280,000 related to investments in property and equipment.

activities was $10,584,000 during the year ended June 30, 2024, and cash provided by investing activities of $9,698,000 during the year

ended June 30, 2023.

Cash provided by investing activities in the year ended June 30, 2024 consisted primarily of the withdrawal of $10,907,000

of short-term deposits, partially offset by payments of $323,000 related to investments in property and equipment.

Cash provided by investing

activities in the year ended June 30, 2023 consisted primarily of the withdrawal of $9,960,000 of short-term deposits, partially offset

by payments of $262,000 related to investments in property and equipment.

Financing activities provided

1 unchanged sentence

The financing

activities during the year ended June 30, 2024 related primarily to the investment in Ever After Foods by external investors.

The financing

activities during the year ended June 30, 2023 related to issuances of common shares and warrants, net of issuance costs, in the December

2022 Private Placement (as defined below).

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, or the Warrants, to purchase up to 1,019,488 common shares, or the December 2022

Private Placement.

The financing activities during year ended June 30, 2022 were related to proceeds of $7,500,000 we received from

Tnuva as an investment in Ever After Foods.

December 13, 2022, and December 27, 2022, we entered into a series of securities purchase agreements with several purchasers for an aggregate

of 8,155,900 common shares and warrants, or the Warrants, to purchase up to 8,155,900 common shares.

On December 13, 2022, we executed

securities purchase agreements to sell, at a purchase price of $1.03 per share, up to 5,579,883 common shares and Warrants to purchase

up to 5,579,833 common shares, with an exercise price of $1.03 per share and a term of three years.

On December 14, 2022, we executed

securities purchase agreements to sell, at a purchase price of $1.05 per share, up to 2,068,517 common shares and Warrants to purchase

up to 2,068,517 common shares, with an exercise price of $1.05 per share and a term of three years.

On December 15, 2022, we executed

securities purchase agreements to sell, at a purchase price of $1.06 per share, up to 237,500 common shares and Warrants to purchase up

to 237,500 common shares, with an exercise price of $1.06 per share and a term of three years.

On December 19, 2022, we executed a securities

purchase agreement to sell, at a purchase price of $1.09 per share, up to 135,000 common shares and Warrants to purchase up to 135,000

common shares, with an exercise price of $1.09 per share and a term of three years.

On December 27, 2022, we executed a securities purchase

agreement to sell, at a purchase price of $1.12 per share, up to 135,000 common shares and Warrants to purchase up to 135,000 common shares,

with an exercise price of $1.12 per share and a term of three years.

The Warrants sold in the December 2022 Private Placement will be

exercisable within six months from their issuance date.

As of June 30, 2023, the Company issued 8,155,900 common shares and Warrants that

relate to the December 2022 Private Placement and received $8,024,000 as of that date net of $445 from issuance expenses.

addition, the purchasers in the December 2022 Private Placement agreed to execute proxies permitting our CEO and CFO to vote the securities

purchased in the December 2022 Private Placement in favor of any shareholder vote relating to a future increase of our authorized shares.

Pursuant to the securities purchase agreements executed with the purchasers, we agreed to hold a meeting of shareholders within 200 days

of the execution of the securities purchase agreements for the purpose of increasing our authorized shares.

April 27, 2023, our shareholders approved an amendment to our articles of incorporation to increase the number of authorized common shares

from 60,000,000 shares to 300,000,000 shares and such increase was effectuated on May 1, 2023, when the Company filed its amendment to

its articles of incorporation reflecting such increase.

As such, the Warrants became exercisable 6 months from the date of their issuance.

December 14, 2022, Yaky Yanay, our CEO, agreed to forgo, starting January 1, 2023, $375,000 of his annual cash salary for the next twelve

months in return for equity grants, issuable under our existing equity compensation plans.

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 million as of that date net of $445,000 from issuance expenses.

The Warrants sold in the December

2022 Private Placement were exercisable upon the later of six months from their issuance date, or from the date we increased our authorized

On April 27, 2023, our shareholders approved an amendment to our articles of incorporation to increase the number of authorized

common shares from 7,500,000 shares to 37,500,000 shares and such increase was effectuated on May 1, 2023 when the Company filed its amendment

to its articles of incorporation reflecting such increase.

As such, the Warrants became exercisable on May 1, 2023.

On December 14, 2022,

Yaky Yanay, our CEO, agreed to forgo, starting January 1, 2023, $375,000 of his annual cash salary for the next twelve months in return

for equity grants, issuable under our existing equity compensation plans.

In that regard, we granted Mr.

Yanay (i) 334,821

RSUs, vesting ratably each month, and (ii) options to purchase 334,821 common shares, vesting ratably each month, with a term of three

years, at an exercise price of $1.12 per share.

In addition, the Board also agreed to grant Mr.

Yanay options to purchase 1,500,000 common

shares, with a term of three years, with the following terms:

(i) options to purchase 500,000 common shares at an exercise price of $1.56

per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, (ii) options to purchase 500,000 common shares at an exercise

price of $2.08 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, and (iii) options to purchase 500,000 common

shares at an exercise price of $2.60 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023.

All options were granted

in January 2023 and will expire three years from the later of the vesting date.

On July 16, 2020, we entered

into an at-the market agreement, or the ATM Agreement, with Jefferies LLC, or Jefferies, pursuant to which we may issue and sell shares

of our common shares having an aggregate offering price of up to $75,000,000 from time to time through Jefferies.

Upon entering into the

ATM Agreement, we filed a new shelf registration statement on Form S-3, which was declared effective by the SEC on July 23, 2020.

21, 2022, as a result of General Instruction I.B.6 of Form S-3, and in accordance with the terms of the Sales Agreement, we reduced the

amount available to be sold under the ATM Agreement to a maximum aggregate offering price of up to $11,800,000 of our common shares from

time to time through Jefferies.

During the years ended June 30, 2022, and 2023, we did not sell of our any common shares under the ATM

Yanay (i) 41,853 RSUs, vesting

ratably each month, and (ii) options to purchase 41,853 common shares, vesting ratably each month, with a term of 3 years, at an exercise

price of $8.96 per share.

In addition, the Boards also agreed to grant Mr.

Yanay options to purchase 187,500 common shares, with a term

of 3 years, with the following terms:

(i) options to purchase 62,500 common shares at an exercise price of $12.48 per share, 50% vested

on June 30, 2023 and 50% vested on December 31, 2023, (ii) options to purchase 62,500 common shares at an exercise price of $16.64 per

share, 50% vested on June 30, 2023 and 50% vested on December 31, 2023, and (iii) options to purchase 62,500 common shares at an exercise

price of $20.8 per share, 50% vested on June 30, 2023 and 50% vested on December 31, 2023.

All options that were granted in January 2023

will expire on April 27, 2026.

December 2023, in light of the ongoing conflict in Israel and challenges in predicting its resolution and the subsequent impact on the

Company’s operations, and in order to ensure the Company’s financial stability, the Board approved, at the recommendation

of the Company’s management, (i) a 20% monthly cash salary reduction in the amount of 39,600 NIS to Mr.

Yanay, our CEO, for the

months of January 2024 and February 2024, (ii) a 20% cash salary reduction in the amount of 39,000 NIS to Mrs.

Franco – Yehuda,

our Chief Financial Officer, or CFO, for the months of December 2023, January 2024 and February 2024, and (iii) a 20% monthly fee

reduction to the fees that are paid to each of the Company’s directors for the months of December 2023 through February 2024.

July 16, 2020, we entered into an at-the market agreement, or the ATM Agreement, with Jefferies LLC, or Jefferies, pursuant to which we

may issue and sell shares of our common shares having an aggregate offering price of up to $75,000,000 from time to time through Jefferies.

Upon entering into the ATM Agreement, we filed a new shelf registration statement on Form S-3, which was declared effective by the SEC

on July 23, 2020.

On September 21, 2022, as a result of General Instruction I.B.6 of Form S-3, and in accordance with the terms of the

Sales Agreement, we reduced the amount available to be sold under the ATM Agreement to a maximum aggregate offering price of up to $11,800,000

of our common shares from time to time through Jefferies.

During the year ended June 30, 2023, we did not sell of our any common shares

under the ATM Agreement.

On September 7, 2023, we provided

a formal notice of termination of the ATM Agreement with Jefferies, which took effect on September 8, 2023.

Pursuant to a shelf registration

on Form S-3 filed on July 20, 2023, which we intend to obtain the effectiveness of in the near term, the Company may elect, from time

to time, to offer and sell shares of common stock, preferred stock, warrants and units having an aggregate offering price of up to $200,000,000.

April 2020, we and our subsidiaries, Pluri Biotech Ltd.

and Pluristem GmbH, executed the EIB Finance Agreement for non–dilutive

funding of up to €50 million in the aggregate, payable in three tranches.

The proceeds from the EIB Finance Agreement were intended

to support our research and development in the EU to further advance our regenerative cell therapy platform, and to bring the products

in our pipeline to market.

On February 13, 2024, we entered

into a sales agreement, or the Sales Agreement, with A.G.P./Alliance Global Partners, or A.G.P., as agent, pursuant to which we may issue

and sell our common shares having an aggregate offering price of up to $10 million, from time to time through A.G.P.

As of September 17,

2024, we have sold an aggregate of 42,729 common shares pursuant to the Sales Agreement at an average price of $5.93 per share.

have an effective Form S-3 registration statement (File No.

333-273347), filed under the Securities Act of 1933, as amended, with the

SEC using a “shelf” registration process.

Under this shelf registration process, we may, from time to time, sell our common

shares, preferred stock and warrants to purchase common shares, and of two or more of such securities, in one or more offerings for an

aggregate initial offering price of $200 million (including amounts sold under the Sales Agreement).

April 2020, we and the Subsidiary and the German Subsidiary, executed the EIB Finance Agreement for non–dilutive funding of up to

€50 million in the aggregate, payable in three tranches.

The proceeds from the EIB Finance Agreement were intended to support our

research and development in the EU to further advance our regenerative cell therapy platform, and to bring the products in our pipeline

The term of the project was three years commencing on January 1, 2020.

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As of June 30,

2023, the interest accrued was in the amount of €1,665,000.

In addition to the interest payable, the EIB is also entitled to royalty

payments, pro-rated to the amount disbursed from the EIB loan, on our consolidated revenues beginning in the fiscal year 2024 up to and

including its fiscal year 2030, in an amount equal to up to 2.3% of our consolidated revenues below $350 million, 1.2% of our consolidated

revenues between $350 million and $500 million and 0.2% of our consolidated revenues exceeding $500 million.

As the project term ended

on December 31, 2022, we do not expect to receive additional funds pursuant to the EIB Finance Agreement.

Innovation Authority (IIA)

to the IIA grant terms, we are required to pay royalties at a rate of 3% on sales of products and services derived from technology developed

using this and other IIA grants until 100% of the dollar-linked grants amount plus interest are repaid.

In the absence of such sales,

no payment is required.

Through June 30, 2023, total grants obtained from the IIA aggregated to approximately $27,743,000 and total royalties

paid and accrued amounted to $179,000.

IIA may impose certain conditions on any arrangement under which the IIA permits the Company to transfer technology or development out

of Israel or outsource manufacturing out of Israel.

While the grant is given to the Company over a certain period of time (usually a

year), the requirements and restrictions under the Israeli Law for the Encouragement of Industrial Research and Development, 1984 continue

and do not have a set expiration period, except for the royalties, which requirement to pay them expires after payment in full.

2024, the interest accrued was in the amount of approximately €2.5 million.

In addition to the interest payable, the EIB is also

entitled to royalty payments, pro-rated to the amount disbursed from the EIB loan, on our consolidated revenues beginning in the fiscal

year 2024 up to and including its fiscal year 2030, in an amount equal to up to 2.3% of our consolidated revenues below $350 million,

1.2% of our consolidated revenues between $350 million and $500 million and 0.2% of our consolidated revenues exceeding $500 million.

As the project term ended on December 31, 2022, we do not expect to receive additional funds pursuant to the EIB Finance Agreement.

Non-dilutive grants

Israel Innovation Authority

According to the IIA grant

terms, we are required to pay royalties at a rate of 3% on sales of products and services derived from technology developed using this

and other IIA grants until 100% of the dollar-linked grants amount plus interest are repaid.

In the absence of such sales, no payment

Through June 30, 2024, total grants obtained from the IIA aggregated to approximately $27.7 million and total royalties paid

and accrued amounted to $179 thousand.

The IIA may impose certain

conditions on any arrangement under which the IIA permits the Company to transfer technology or development out of Israel or outsource

manufacturing out of Israel.

While the grant is given to the Company over a certain period of time (usually a year), the requirements

and restrictions under the Israeli Law for the Encouragement of Industrial Research and Development, 1984 continue and do not have a set

expiration period, except for the royalties, which requirement to pay them expires after payment in full.

In June 2020, we announced

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and aquaculture industries.

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

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 eighteen

CRISPR-IL is funded by the IIA with a total budget of approximately $10 million of which, an amount of approximately

$480 thousand was a direct grant allocated to us, for the initial period of 18 months.

During October 2021, we received an approval for

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

of eighteen months.

During January 2023, we received approval for an extension of an additional 2 months to finish the program until June

The CRISPR-IL consortium program does not include any obligation to pay royalties.

Through June 30, 2023, we received total grants

of approximately $774,000 in cash from the IIA pursuant to the CRISPR-IL consortium program, and we expect to receive an additional $253,000.

grants – Horizon 2020 and Horizon Europe

June 30, 2023, we received total grants of approximately $8,621,000 in cash from the EU R&D consortiums pursuant to the Horizon programs.

September 6, 2022, we announced that a €7.5 million non-dilutive grant from the EU’s Horizon program was awarded to Advanced

Personalized Therapies for Osteoarthritis (PROTO), an international collaboration led by Charité Berlin Institute of Health Center

for Regenerative Therapies.

The goal of the PROTO project is to utilize our PLX-PAD cells in a Phase I/IIA study for the treatment of

mild to moderate knee osteoarthritis.

Final approval of the grant is subject to completion of the consortium agreement.

An amount of approximately

Euro 500,000 (approximately $545,000) will be a direct grant that will be allocated to us.

Through June 30, 2023, we received a payment

of approximately $185,000 in cash, which relates to the PROTO program.

The Phase I/II study will be carried out by Charité,

together with us and other members of the international consortium under the leadership of Professor Tobias Winkler, Principal Investigator,

at the Berlin Institute of Health Center of Regenerative Therapies, Julius Wolff Institute and Center for Musculoskeletal Surgery.

In August 2016, our CLI program

in the EU was awarded a €7,600,000 non-royalty bearing grant.

The grant was part of the EU’s Horizon 2020 program.

III study of PLX-PAD in CLI was a collaborative project carried out by an international consortium led by the Berlin-Brandenburg Center

for Regenerative Therapies together with the Company and with participation of additional third parties.

The grant covered a significant

portion of the CLI program costs, and the program was ended during fiscal year 2023.

Through June 30, 2023, we received a total of €3,235,000

relating to the CLI program in the EU (approximately $3,563,000).

September 2017, our Phase III study of PLX-PAD cell therapy in the treatment of muscle injury following surgery for hip fracture was

awarded a €7,400,000 grant, as part of the EU’s Horizon 2020 program.

This Phase III study was a collaborative project carried

out by an international consortium led by Charité, together with us, and with participation of additional third parties.

covered a significant portion of the project costs and the program was ended during fiscal year 2023.

Through June 30, 2023, we received

a total of €3,228,000 (approximately $3,699,000).

In October 2017, the nTRACK,

a collaborative project carried out by an international consortium led by Leitat was awarded a €6,800,000 non-royalty bearing grant.

As of June 30, 2023, we received a total of €764,000 (approximately $859,000).

The nTRACK program ended during fiscal year 2023.

have accumulated a deficit of $399,584,000 since our inception in May 2001.

We do not expect to generate any significant revenues from

sales of products in the next twelve months.

We expect to generate revenues, from the sale of licenses to use our technology or products,

but in the short and medium terms will unlikely exceed our costs of operations.

may be required to obtain additional liquidity resources in order to support the commercialization of our products and technology and

maintain our research and development activities.

Through June 30, 2024, we received total

grants of approximately $774 thousand in cash from the IIA pursuant to the CRISPR-IL consortium program, and we expect to receive an additional

$253 thousand.

EU grants – Horizon

2020 and Horizon Europe

Through June 30, 2024, we

received total grants of approximately $8.4 million in cash from the EU Horizon programs.

On September 6, 2022, we announced

that a €7.5 million non-dilutive grant from the EU’s Horizon program was awarded to Advanced Personalized Therapies for Osteoarthritis

(PROTO), an international collaboration led by Charité Berlin Institute of Health Center for Regenerative Therapies.

the PROTO project is to utilize our PLX-PAD cells for the treatment of mild to moderate knee osteoarthritis.

Final approval of the grant

is subject to completion of the consortium agreement.

An amount of approximately Euro 500 thousand (approximately $520,000) will be a

direct grant that will be allocated to us.

Through June 30, 2024, we received a payment of approximately $185,000 in cash, which relates

to the PROTO program.

The clinical study, once approved by the regulatory agencies, will be carried out by Charité, together

with us and other members of the international consortium under the leadership of Professor Tobias Winkler, Principal Investigator, at

the Berlin Institute of Health Center of Regenerative Therapies, Julius Wolff Institute and Center for Musculoskeletal Surgery.

We have accumulated a deficit

of $420,472,000 since our inception in May 2001.

We do not expect to generate any significant revenues from sales of products in the next

twelve months.

We expect to generate revenues from the sale of services in our CDMO activity, from collaboration based on our cell-based products, and

from licenses to use our technology and products.

Although we were able to reduce the burn rate significantly in the last few years, it

is unlikely that in the short term revenues will exceed our costs of operations.

We may be required to obtain

additional liquidity resources in order to support the commercialization of our products and technology and maintain our research and

development activities.

are continually looking for sources of funding, including collaboration with other companies via licensing agreements, joint ventures

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European Union grants, and sales of our common shares.

believe that we have sufficient cash to fund our operations for at least the next twelve months.

of Critical Accounting Policies and Estimates

We believe that we have sufficient

cash to fund our operations for at least the next twelve months.

Application of Critical Accounting Policies and Estimates

Our accounting policies are

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Share-Based Compensation

Share-based compensation is considered a critical

accounting policy due to the significant expenses of RSUs which were granted to our employees, directors and consultants.

In fiscal year

2023, we recorded share-based compensation expenses related to options, restricted shares and RSUs in the amount of $3,977,000.

In accordance with ASC 718, “Compensation-Stock

Compensation”, or ASC 718, RSUs granted to employees and directors are measured at their fair value on the grant date.

granted in fiscal years 2023 and 2022 were granted for no consideration;

therefore, their fair value was equal to the share price at the

date of grant unless the RSUs include a market-based condition in which case the fair value RSUs at the date of grant was calculated using

the Monte Carlo model.

The RSUs granted in fiscal year 2023 to non-employee consultants were measured at their fair value on the grant

date in accordance with ASU No.

Share-based compensation is

considered a critical accounting policy due to the significant expenses of RSUs which were granted to our employees, directors and consultants.

In fiscal year 2024, we recorded share-based compensation expenses related to options, restricted shares and RSUs in the amount of $2,618,000.

In accordance with ASC 718,

“Compensation-Stock Compensation”, or ASC 718, RSUs granted to employees and directors are measured at their fair value on

the grant date.

All RSUs granted in fiscal years 2024 and 2023 were granted for no consideration;

therefore, their fair value was equal

to the share price at the date of grant unless the RSUs include a market-based condition in which case the fair value RSUs at the date

of grant was calculated using the Monte Carlo model.

The RSUs granted in fiscal year 2024 to non-employee consultants were measured at

their fair value on the grant date in accordance with ASU No.

2018-07 - “Compensation—Share Compensation”.

The fair value of shares of

Ever After Foods granted to our CEO, CFO and Chairman (see details in Item 11 below) was calculated using the Monte Carlo model, and the

fair value of the options of Ever After Foods granted to employees and officers were calculated using the Black Scholes model.

The value of the portion of

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grant is 16% for the shares granted to employees and 0% for the shares granted to our directors and officers and non-employee consultants.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

QUANTITATIVE AND

QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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 7. Management’s Discussion and Analysis