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Item 1. Financial Statements

2024-11-12 compared with 2024-05-09 · 289 added, 369 removed, 131 unchanged (83% of the section changed)

Financial Statements

INTERIM CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

As of March 31, 2024

DOLLARS IN THOUSANDS

Interim Condensed Consolidated Balance Sheets

Interim Condensed Consolidated Statements of Operations

Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit)

Interim Condensed Consolidated Statements of Cash Flows

Notes to Interim Condensed Consolidated Financial Statements

AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of September 30, 2024

DOLLARS IN THOUSANDS

Interim Condensed Consolidated Balance Sheets (Unaudited)

Interim Condensed Consolidated Statements of Operations (Unaudited)

Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit) (Unaudited)

Interim Condensed Consolidated Statements of Cash Flows (Unaudited)

Notes to Interim Condensed Consolidated Financial Statements (Unaudited)

AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

Dollars in thousands (except share and per share data)

September 30,

CURRENT ASSETS:

3 unchanged sentences

Prepaid expenses and other current assets

Total current

Total current assets

LONG-TERM ASSETS:

3 unchanged sentences

Operating lease right-of-use asset

Long-term deposit and other long-term assets

Other long-term assets

Total long-term assets

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AND ITS SUBSIDIARIES

1 unchanged sentence

Dollars in thousands (except share and per share data)

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

September 30,

AND SHAREHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES

3 unchanged sentences

Accrued vacation and recuperation

Advances from customers

Other accounts payable

accounts payable

Total current

2 unchanged sentences

Operating lease liability

Loan from the European Investment Bank (“EIB”)

Total long-term

from the European Investment Bank, or EIB

Total long-term liabilities

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY (DEFICIT)

SHAREHOLDERS’ EQUITY

Share capital:

Common shares, $ 0.00001 par value per share:

37,500,000 as of March 31, 2024, and June 30, 2023;

37,500,000 as of September 30, 2024, and June 30, 2024;

Issued and outstanding:

5,228,737 and 5,155,687 shares as of March 31, 2024, and June 30, 2023, respectively

5,507,304 and 5,408,212 shares as of September 30, 2024, and June 30, 2024, respectively

Additional paid-in capital

Accumulated deficit

Total shareholders’ (deficit) equity

Non-controlling interests

shareholders’ (deficit) equity

Non-controlling

Total equity (deficit)

Total liabilities

(*) Less than $1

(**) See note 1d regarding reverse stock split

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AND ITS SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Dollars in thousands (except share and per share data)

Nine months ended

Three months ended

September 30,

Cost of revenues

Operating expenses:

Research and development expenses

participation by the National Institute of Allergy and Infectious Diseases (“NIAID”), the Israeli Innovation Authority (“IIA”), Horizon Europe and other parties

participation by the National Institute of Allergy and Infectious Diseases, or NIAID, the Israeli Innovation Authority, or IIA, Horizon Europe and other parties

Research and development expenses, net

1 unchanged sentence

Operating loss

Interest expenses

Other financial income (expenses), net

Interest expenses

Total financial income (expenses), net

4 unchanged sentences

Weighted average number of shares used in computing basic and diluted net loss per share (**)

note 1d regarding reverse stock split

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

note 5(1) regarding reverse share split

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AND ITS SUBSIDIARIES

INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(DEFICIT) (UNAUDITED)

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)

Dollars in thousands (except share and per share data)

2 unchanged sentences

Shareholders’

Non-controlling

Balance as of July 1, 2023

1 unchanged sentence

Share-based compensation to employees, directors, and non-employee consultants

Issuance of common shares and warrants related to December 2022 private placement, net of issuance costs of $ 435

Modification of warrants to non-controlling interests

Expiration of warrants in Ever After

Balance as of March 31, 2023

$ ( 393,125 )

Shareholders’ Equity

Common Shares

Shareholders’

Non-controlling

Balance as of January 1, 2023

$ ( 385,501 )

Share-based compensation to employees, directors, and non-employee consultants

Issuance of common shares and warrants related to December 2022 private placement, net of issuance costs of $ 74

Balance as of March 31, 2023

Balance as of September 30, 2023

$ ( 404,545 )

(*) Less than $1

(**) See note 1d regarding reverse stock split

note 5(1) regarding reverse share split

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AND ITS SUBSIDIARIES

INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(DEFICIT) (UNAUDITED)

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)

Dollars in thousands (except share and per share data)

1 unchanged sentence

Common Shares

Additional Paid-in

Total Shareholders’

Non- controlling

Equity (Deficit)

Balance as of July 1, 2023

$ ( 399,584 )

Share-based compensation to employees, directors, and non-employee consultants

Balance as of March 31, 2024

$ ( 414,743 )

Shareholders’

Equity (Deficit)

Total Shareholders’

Non- controlling

Equity (Deficit)

as of January 1, 2024

$ ( 409,450 )

as of July 1, 2024

compensation to employees, directors, and non-employee consultants

as of March 31, 2024

$ ( 414,743 )

See note 1d regarding reverse stock split

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

as of September 30, 2024

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AND ITS SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Dollars in thousands (except share and per share data)

Nine months ended

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Dollars in thousands (except share and per share amounts)

Three months ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile loss to net cash used in operating activities:

Share-based compensation to employees, directors and non-employee consultants

Increase in prepaid expenses, other current assets and other long-term assets

Decrease in trade payables

Decrease in prepaid expenses and other current assets and other long-term assets

Increase (decrease) in trade payables

Decrease in other accounts payable and accrued expenses

Increase in advances from customers

Increase (decrease) in operating lease right-of-use asset and liability, net

Decrease (increase) in interest receivable on deposits

Decrease (increase) in operating lease right-of-use asset and liability, net

Increase in interest receivable on short-term deposits

Effect of exchange rate changes on cash, cash equivalents, deposits and restricted cash

Long term interest payable and exchange rate differences relate to EIB loan

Increase (decrease) in long-term interest payable and exchange rate differences related to the EIB loan, net

Accrued severance pay, net

2 unchanged sentences

Purchase of property and equipment

Proceeds from short-term deposits, net

Proceeds from withdrawal of short-term deposits, net

Net cash provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Issuance of common shares and warrants, net of issuance costs

Net cash provided by financing activities

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

AND ITS SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Dollars in thousands (except share and per share data)

Nine months ended

EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at the beginning of the period

Cash, cash equivalents and restricted cash at the end of the period

EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS and restricted cash

Decrease in cash, cash equivalents, restricted cash and restricted bank deposits

Cash, cash equivalents, restricted cash and restricted bank deposits at the beginning of the period

Cash, cash equivalents, restricted cash and restricted bank deposits at the end of the period

Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets:

5 unchanged sentences

Purchase of property and equipment on credit

Accrued expenses related to issuance of common shares and warrants

Lease liabilities arising from obtaining right-of-use assets

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AND ITS SUBSIDIARIES

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in thousands (except share and per share amounts)

(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.’s common shares trade on the Nasdaq Capital Market and Tel-Aviv Stock Exchange under the symbol “PLUR”.

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.”

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.

(formerly known as Pluristem Ltd.), or the Subsidiary, which is incorporated under the laws of the State of Israel.

In January 2020, the Subsidiary established a wholly owned German Subsidiary, Pluristem GmbH, or the German Subsidiary which is incorporated under the laws of Germany.

In January 2022, the Subsidiary established a new subsidiary, Ever After Foods Ltd., or Ever After Foods formerly known as Plurinuva Ltd.

Ever After Foods 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, or Tnuva.

In March 2024, the Subsidiary established a new wholly owned subsidiary, Coffeesai Ltd., or Coffeesai which is incorporated under the laws of Israel, to develop cultivated coffee.

Pluri Inc., the Subsidiary, the German Subsidiary, Ever After Foods and Coffeesai are referred to as the “Company” or “Pluri.” The Subsidiary, the German Subsidiary, Coffeesai and Ever After Foods are referred to as the “Subsidiaries.”

Company is a bio-technology company with an advanced cell-based technology platform, which operates in one operating segment.

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 technology

and agricultural technology and launched a Contract Development and Manufacturing Organization or CDMO business and plans to utilize

its technology in industries and verticals that have a need for a mass scale and cost-effective cell expansion platform.

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.

The Company has incurred an accumulated deficit of approximately $ 426,354 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.

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.

As of September 30, 2024, the Company’s total shareholders’ equity deficit amounted to $ 5,283 .

During the three-month period ended September 30, 2024, the Company incurred losses of $ 6,036 and its negative cash flow from operating activities was $ 4,064 .

As of September 30, 2024, the Company’s cash balances (cash and cash equivalents, short-term bank deposits, restricted cash and restricted bank deposits) totaled $ 26,677 .

The Company plans to continue to finance its operations from its current resources, by entering into licensing or other commercial, partnerships 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 interim unaudited condensed consolidated financial statements.

During 2024, the Company also implemented a cost reduction and efficiency plan.

There is no assurance, however, that the Company will be able to obtain an adequate level of financial resources that are required for the long-term development and commercialization of its products.

In the case the Company is unable to obtain the required level of financing, operations may need to be scaled down or discontinued.

On April 30, 2020, the German Subsidiary entered into a finance contract, or the Finance Contract, with the EIB, pursuant to which the German Subsidiary obtained a loan in an amount of € 20 million, or the Loan.

The amount received is due on June 1, 2026 and bears an annual interest of 4 % to be paid with the principal of the Loan.

As of September 30, 2024, the linked principal and interest accrued balance was of $ 25,365 and is presented among long-term liabilities (see note 4).

AND ITS SUBSIDIARIES

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in thousands (except share and per share amounts)

1 unchanged sentence

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.

accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

generally accepted

accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of

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, 2024.

year-end balance sheet data was derived from the audited consolidated financial statements as of June 30, 2024, but not all disclosures

required by GAAP are included.

results for the three-month period ended September 30, 2024, are not necessarily indicative of the results that may be expected for the

year ending June 30, 2025.

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.

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.

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.

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.

AND ITS SUBSIDIARIES

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in thousands (except share and per share amounts)

- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

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”

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.

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:

carrying amounts of the Company’s financial instruments, including cash and cash equivalents, restricted cash, short-term bank

deposits 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.

Company measures its derivative instruments at fair value under Accounting Standards Codification, or ASC, “Fair Value Measurements

and Disclosures, or 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.

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:

- Quoted prices (unadjusted) in active markets for identical assets or liabilities;

1 unchanged sentence

- Unobservable inputs for the asset or liability.

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.

measures its liability pursuant to the Finance Contract based on the aggregate outstanding amount of the combined principal and accrued

interest thereunder.

As of September 30, 2024, the Company does not reflect its liability for future royalty payments pursuant to the

Finance Contract with the EIB since the royalty payments are to be paid as a percentage of the Company’s future consolidated revenues,

pro-rated to the amount disbursed, beginning in fiscal year 2024 and until fiscal year 2030.

As of September 30, 2024, Pluri had an accrued

royalty in the amount of $7(see note 4).

AND ITS SUBSIDIARIES

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in thousands (except share and per share amounts)

- 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.

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).

- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

New Accounting Pronouncements

Recently adopted accounting pronouncements

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.

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.

Recently issued accounting pronouncements, not yet adopted

2023-07 - “Segment

Reporting (Topic 280):

Improvements to reportable segment disclosures” (“ASU 2023-07”):

In November 2023, the FASB issued

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.

AND ITS SUBSIDIARIES

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in thousands (except share and per share amounts)

- SIGNIFICANT

ACCOUNTING POLICIES (CONT.)

2023-09 - “Income

Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”):

In December 2023, the FASB issued

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.

adopted accounting pronouncements

2023-07 - “Segment Reporting (Topic 280):

Improvements to reportable segment disclosures”, or ASU 2023-07:

November 2023, the Financial Accounting Standards Board, or 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 are 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

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.

2023-09 - “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”, or ASU 2023-09:

December 2023, the FASB issued ASU 2023-09.

This guidance is intended to enhance the transparency and decision usefulness of income tax

The amendments in ASU 2023-09 address investors’ requests for enhanced income tax information primarily through changes

to the tax rate reconciliation and regarding income tax paid both in the U.S.

and in 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.

The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.

- COMMITMENTS AND CONTINGENCIES

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.

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.

As of September 30, 2024, an amount of $ 1,018 of cash and deposits was pledged by the Subsidiary to secure its credit line, lease agreement, derivative and hedging and bank guarantees.

Under the Law for the Encouragement of Industrial Research and Development, 1984, or 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.

2 unchanged sentences

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.

The outstanding balance of the grants will be subject to interest at a rate equal to the 12 month London Interbank Offered Rate, or LIBOR (from January 1, 2024, to the 12-month secured overnight financing rate, or 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.

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 .

As to royalties to the EIB, see note 4.

As of September 30, 2024, the Company’s contingent liability in respect to royalties to the IIA amounted to $ 27,565 , not including LIBOR (from January 1, 2024, SOFR) interest as described above.

AND ITS SUBSIDIARIES

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in thousands (except share and per share amounts)

- COMMITMENTS AND CONTINGENCIES (CONT.)

In April 2017, the Company was awarded a Smart Money grant of approximately $ 229 from Israel’s Ministry of Economy and Industry to facilitate certain marketing and business development activities with respect to its advanced cell therapy products in the Chinese market, including Hong Kong.

The Israeli government granted the Company budget resources that are intended to be used to advance the Company’s product candidate towards marketing in the China-Hong Kong markets.

The Company will also receive support from Israel’s trade representatives stationed in China, including Hong Kong, along with experts appointed by the Smart Money program.

As part of the program, the Company will repay royalties of 5 % from the Company’s revenues in the region for a five-year period, beginning the year in which the Company will not be entitled to reimbursement of expenses under the program and will be spread for a period of up to 5 years or until the amount of the grant is fully paid.

As of August 4, 2022, the grant from this Smart Money program received was approximately $ 180 and the program has ended.

To date, no royalties were paid or accrued.

In September 2017, the Company signed an agreement with the Tel-Aviv Sourasky Medical Center, or 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, or GVHD.

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 GVHD, with a maximum aggregate royalty amount of approximately $ 500 .

to potential royalties to the EIB, see 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

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.

April 30, 2020, the German Subsidiary entered into 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, receivable in three tranches, with the first

tranche consisting of € 20 million, second tranche consisting of € 18 million and third tranche consisting of € 12 million

for a period of 36 months from the signing of the Finance Contract.

tranches were treated independently, each with its own interest rate and maturity period.

The annual interest rate is 4 % (consisting

of a 4 % deferred interest rate payable upon maturity);

for the first tranche, 4 % (consisting of a 1 % fixed interest rate and a 3 % deferred

interest rate payable upon maturity) for the second tranche and 3 % (consisting of a 1 % fixed interest rate and a 2 % deferred interest

rate payable upon maturity) for the third tranche.

addition to any interest payable on the loan, the EIB is entitled to receive royalties from future 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 September 30, 2024, Pluri

had an accrued royalty in the amount of $ 7 .

June 2021, Pluri received the first tranche in an amount of € 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 September 30, 2024, the linked principal balance

in the amount of $ 22,385 and the interest accrued in the amount of $ 2,980 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.

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.

AND ITS SUBSIDIARIES

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in thousands (except share and per share amounts)

- SHAREHOLDERS’ EQUITY

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

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.

(1) Reverse share split

In March 2024, the Company’s Board of Directors, or the Board, approved a 1-for-8 reverse share split of the Company’s (a) authorized common shares;

and (b) issued and outstanding common shares.

The reverse share split became effective on April 1, 2024.

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 share split for all periods presented.

As a result of rounding-up fractional shares into whole shares as a result of the reverse share split, an additional 67,836 common shares were included in the Company’s issued and outstanding shares.

(2) Pursuant to a registration statement on Form S-3 (File No.

333-273347), declared effective by the U.S Securities and Exchange Commission on September 21, 2023, on February 13, 2024 the Company entered into an Open Market Sales Agreement, or Sales Agreement, with A.G.P./Alliance Global Partners, or 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.

Options to consultants:

A summary of the share options to non-employee

consultants under equity incentive plans of Pluri Inc.

As of September 30, 2024, 42,729 common shares were sold under the Sales Agreement at an average price of $ 5.93 per share.

options and restricted share units, or RSUs to employees, directors and consultants:

to non-employee consultants:

summary of the share options granted to non-employee consultants under equity incentive plans, or Plans by Pluri Inc.

and its Subsidiary

is as follows:

Nine months ended March 31, 2024

Three months ended September 30, 2024

Number Weighted

exercise price Weighted

(in years) Aggregate

Share options outstanding at the beginning of the period 17,475 $ 5.80 4.87 $ 42

Share options granted

Share options outstanding at the end of the period

Share options outstanding at end of the period 17,475 $ 5.80 4.62 $ 42

Share options exercisable at the end of the period 8,100 $ 7.41 4.99 $ 27

Share options unvested at the end of the period

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.

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.

Share options unvested 9,375 $ 4.40 4.30 $ 15

Share options vested and expected to vest at the end of the period 17,475 $ 5.80 4.62 $ 42

AND ITS SUBSIDIARIES

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in thousands (except share and per share amounts)

- SHAREHOLDERS’ EQUITY (CONT.)

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

compensation expenses related to options granted to non-employee consultants by Pluri Inc.

and its Subsidiary are approximately $ 16 to

be recognized by the end of March 2027.

to the Chief Executive Officer, or CEO, and Director:

summary of the share options granted to the CEO and directors under the Plans by Pluri Inc.

and its Subsidiary is as follows:

Three months ended September 30, 2024

Number Weighted

exercise price Weighted

Share options outstanding at the beginning of the period 240,291 $ 14.82 2.42

Share options granted

Share options outstanding at the end of the period 240,291 $ 14.82 2.17

Share options exercisable at the end of the period

Share options unvested

Share options vested and expected to vest at the end of the period

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.

Restricted Stock (“RS”) and Restricted Stock Units (“RSUs”) to employees, directors, officers and consultants:

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

Share options vested and exercisable at the end of the period 240,291 $ 14.82 2.17

of September 30, 2024, the aggregate intrinsic value of these options was $ 0 .

AND ITS SUBSIDIARIES

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in thousands (except share and per share amounts)

- SHAREHOLDERS’ EQUITY (CONT.)

to employees and directors:

The following table summarizes the

activity related to unvested RSUs granted to employees and directors under the Plans by Pluri Inc.

and its Subsidiary, for the three-month

period ended September 30, 2024:

Three months ended

September 30,

Unvested at the beginning of the period

1 unchanged sentence

Expected to vest after the end of the period

note 1d regarding reverse stock split

fair value of all RSUs was determined based on the closing trading price of the Company’s shares known at the grant date.

average grant date fair value of RSUs granted during the three-month period ended September 30, 2024 granted to employees and directors

was $ 5.20 per share.

compensation expenses related to RSUs granted to employees and directors by Pluri Inc.

and its Subsidiary are approximately $ 613 to be

recognized by the end of September 2027.

and restricted shares, or RS to consultants:

The following table summarizes the

activity related to unvested RSUs and RS granted to non-employee consultants by Pluri Inc.

and its Subsidiary for the three-month period

ended September 30, 2024:

Three months ended

September 30,

Unvested at the beginning of the period

Unvested at the end of the period

AND ITS SUBSIDIARIES

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in thousands (except share and per share amounts)

- SHAREHOLDERS’ EQUITY (CONT.)

fair value of all RSUs was determined based on the closing trading price of the Company’s shares known at the grant date.

average grant date fair value of RSUs granted during the three-month period ended September 30, 2024 granted to non-employee consultants

was $ 5.91 per share.

compensation expenses related to RSUs and RS granted consultants by Pluri Inc.

and its Subsidiary are approximately $ 16 to be recognized

by the end of June 2025.

Compensation expenses related to RSUs

granted to employees, directors and officers were recorded as follows:

Nine months ended

granted by Pluri Inc.

and its Subsidiary were recorded as follows:

Three months ended

September 30,

Research and development expenses

General and administrative expenses

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.

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

Unvested at the beginning of the period

Unvested at the end of the period

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

(3) Nasdaq Deficiency Letter:

On May 28, 2024, the Company, received a deficiency from the Listing Qualifications Department of The Nasdaq Stock Market LLC, or Nasdaq, notifying the Company that it was not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires the Company to maintain a minimum of $ 2,500 in shareholders’ equity for continued listing on The Nasdaq Capital Market, or the Shareholders’ Equity Requirement, nor was it in compliance with either of the alternative listing standards, market value of listed securities of at least $ 35,000 or net income of $ 500 from continuing operations in the most recently completed fiscal year, or in two of the three most recently completed fiscal years.

On July 11, 2024, the Company submitted a plan to regain compliance with the Shareholders’ Equity Requirement.

Based on such compliance plan, Nasdaq granted the Company an extension of time to regain compliance with the Stockholders’ Equity Requirement until November 24, 2024.

On September 26, 2024, the Company received a letter from Nasdaq, determining that the Company has regained compliance with the Shareholders’ Equity Requirement and that the matter is now closed.

- OTHER FINANCIAL INCOME (EXPENSES), NET

Three months ended

Research and development expenses

General and administrative expenses

September 30,

Foreign currency translation differences, net

Interest income on deposits and restricted bank deposits

Income (loss) from hedging derivatives

Financial income (expenses), net

EIB loan interest expenses

- SUBSEQUENT EVENTS

In October 2024, Ever After Foods signed a facility

operating lease agreement with a lessor.

The lease period will begin on December 1, 2024 for a term of five years until December 2029 .

In addition, Ever After Foods has the option to terminate the lease after a period of 36 months and to extend the term of the lease for

an additional period of five years until December 2034 , or the Extension Option.

The average monthly lease payment for the first five

years is approximately NIS 50,192 or $ 14 which are linked to the consumer price index.

The monthly lease payments will increase by 5 %

in the event that Ever After Foods exercises its Extension Option.

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 1. Financial Statements