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Item 2. Management’s Discussion and Analysis

2024-11-12 compared with 2024-05-09 · 310 added, 348 removed, 30 unchanged (96% of the section changed)

Discussion and Analysis of Financial Condition and Results of Operations.

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

Forward-Looking

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

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

Forward-looking statements

This Quarterly Report on Form

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

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

Forward-looking statements may include statements

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

results or projections or current expectations.

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

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

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

variations thereon or comparable terminology.

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

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

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

Such forward-looking statements

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

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

the expected development, time-to-market and potential benefits from our products in regenerative medicine, biologics, food technology, or food tech, and agtech, as well as potentially in other industries and verticals that have a need for our mass scale and cost-effective cell expansion platform;

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

financial conditions, results or projections or current expectations.

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

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

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

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

These statements are merely predictions and therefore

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

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

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

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

statements regarding the following:

● the expected development, time-to-market and potential benefits from our products and ventures, based

on our cell-based technology platform in regenerative medicine, immunotherapy, food technology, or food tech, agriculture technology,

or agtech, and our Contract Development and Manufacturing Organization, or CDMO, business, as well as potentially in other industries

and verticals that have a need for our mass scale and cost-effective cell expansion platform;

● our expectations of market and industry growth;

the prospects of entering into additional license agreements, or other forms of cooperation or strategic partnerships with other companies, research organizations and medical institutions, including, without limitation Tnuva (as defined below);

our pre-clinical and clinical study plans, including timing of initiation, scale, expansion, enrollment, results, and conclusion of trials;

● the prospects of entering into additional license agreements, joint ventures, partnerships or other forms

of cooperation with other companies, government institutes, research organizations and medical institutions;

● our ability to attract clients for our CDMO business;

● our pre-clinical and clinical study plans, including timing of initiation, expansion, enrollment, results,

and conclusion of trials;

● achieving regulatory approvals;

receipt of future funding from the Israel Innovation Authority, or IIA, the European Union’s Horizon programs, the National Institutes of Health, or NIH, as well as grants from other independent third parties;

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

our expectation to solve medicine’s unmet needs and demonstrate a real-world impact and value from our pipeline, technology platform and commercial-scale manufacturing capacity;

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

programs, the National Institutes of Health, or NIH, as well as grants from other independent third parties;

● the capabilities of our placenta expanded, or PLX, cells, including future collaborations to further advance

the development of our PLX- PAD and PLX-R18 cell therapy as a potential novel treatment;

● the expected clinical development of a new allogeneic Placental Mucosal Associated Invariant T, or MAIT,

and the potential benefits it can produce for advanced cell-based therapies for immune disorders and neurodegenerative diseases;

● our expectation to solve medicine’s unmet needs and demonstrate a real-world impact and value from

our pipeline, technology platform and commercial-scale manufacturing capacity;

● the possible impacts of cybersecurity incidents on our business and operations;

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

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

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

future revenue and expenses;

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

general market, political and economic conditions in the countries in which we operate including those related to recent unrest in the Middle East and armed conflict between Israel and Hamas, Hezbollah and other terrorist organizations from the Gaza Strip and Lebanon.

Our business and operations

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

In addition, historic results

of scientific research and development, clinical and preclinical trials do not guarantee that the conclusions of future research and development

or trials would not suggest different conclusions.

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

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

Except as required by law, we undertake no obligation

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

after the date hereof or to reflect the occurrence of unanticipated events.

Further information on potential factors that could affect

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

year ended June 30, 2023, or the 2023 Annual Report, as well as Item 1A of this Quarterly Report.

Readers are also urged to carefully

review and consider the various disclosures we have made in that report.

As used in this Quarterly

Report on Form 10-Q, the terms “we”, “us”, “our”, the “Company” and “Pluri”

mean Pluri Inc.

● general market, political and economic conditions in the countries in which we operate including those

related to recent unrest in the Middle East and armed conflict between Israel and Hamas, Hezbollah and other terrorist organizations.

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

in this report.

addition, historic results of scientific research and development, or R&D, clinical and preclinical trials do not guarantee that

the conclusions of future R&D or trials would not suggest different conclusions.

Also, historic results referred to in this periodic

report would be interpreted differently in light of additional research, development, clinical and preclinical trials results.

as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that

may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Further information

on potential factors that could affect our business is described under the heading “Risk Factors” in Part I, Item 1A of our

Annual Report on Form 10-K for the fiscal year ended June 30, 2024, or the 2024 Annual Report, as well as in Part II, Item 1A of this

Quarterly Report.

Readers are also urged to carefully review and consider the various disclosures we have made in that report.

used in this Quarterly Report on Form 10-Q, the terms “we”, “us”, “our”, the “Company”

and “Pluri” mean Pluri Inc.

and our wholly owned subsidiaries, Pluri Biotech Ltd.

and Pluristem GmbH, and our subsidiary Ever After Foods Ltd., or

Ever After, unless otherwise indicated or as otherwise required by the context.

All references to common shares, or price per common

share, in this Quarterly Report on Form 10-Q, reflect the 1-for-8 reverse stock split effectuated by us on April 1, 2024.

We are a biotechnology company

with an advanced cell-based technology platform.

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

with an industrial scale in-house Good Manufacturing Practice, or GMP, cell manufacturing facility.

We are utilizing our technology in

the field of regenerative medicine, food tech, Contract Development and Manufacturing Organization, or 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.

Our operations are focused

on the research, development and manufacturing of cells and cell-based products, and business development of cell therapeutics and cell-based

technologies and cell-based products.

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 and hematologic conditions.

and Pluristem GmbH, and our subsidiary

Ever After Foods Ltd., or Ever After Foods, unless otherwise indicated or as otherwise required by the context.

references to common shares, or price per common share, in this Quarterly Report on Form 10-Q, reflect the 1-for-8 reverse stock split

effectuated by us on April 1, 2024.

are a biotechnology company with an advanced cell-based technology platform.

We have developed a unique three-dimensional, or 3D, technology

platform for cell expansion with an industrial scale in-house Good Manufacturing Practice, cell manufacturing facility.

We are utilizing

our technology in the fields of regenerative medicine, immunotherapy, 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.

operations are 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.

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.

Recently, we have also launched a novel immunotherapy

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

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, critical limb ischemia, or CLI, Chronic Graft versus Host

Disease and a potential treatment for Hematopoietic Acute Radiation Syndrome, or H-ARS.

Some of these studies have been completed while

others are still ongoing.

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.

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, critical limb ischemia, or CLI,

Chronic Graft versus Host Disease and a potential treatment for Hematopoietic Acute Radiation Syndrome, or H-ARS.

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.

In July 2023, we announced

that we signed a three-year $4.2 million contract with the U.S.

National Institute of Allergy and Infectious Diseases, or NIAID, which

is part of the NIH.

July 2023, we announced that we signed a three-year $4.2 million contract with the U.S.

National Institute of Allergy and Infectious

Diseases, or NIAID, which is part of the NIH.

Under such contract, we will collaborate with the U.S.

Department 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 our PLX-R18 cell therapy as a potential novel treatment for H-ARS, a deadly disease that can result from nuclear disasters and radiation

In April 2024, we unveiled

a novel method for expansion of immune cells using proprietary technology and announced we were granted a new U.S.

patent titled, “System

and Methods for Immune Cells Expansion and Activation in Large Scale”.

This innovative approach ensures that the produced immune

cells retain their integrity, functionality, and therapeutic efficacy, thus offering a promising solution to meet the escalating demand

for advanced cell-based therapies for immune disorders and neurodegenerative diseases.

In May 2024, we launched a novel immunotherapy platform based on Placental

Mucosal Associated Invariant T, or MAIT, cell for solid tumors – a significant medical need which currently lacks effective treatments.

We believe that our MAIT platform, isolated from the human placenta , offers substantial potential

benefits compared to conventional T cells.

Our 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 T cells typically collected from peripheral blood, our MAIT cells demonstrate a lower alloreactivity profile.

This characteristic

not only minimizes their likelihood of inducing Graft versus Host Disease (GvHD) - a significant advantage over other potential allogeneic

products - but also suggests that they may persist in the body for a longer duration, enhancing their therapeutic efficacy.

On January 8, 2024, we

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

offers services relating to early preclinical development, through late-stage clinical trials and commercialization, with a mission to

deliver high-quality, essential therapies to patients.

January 23, 2024, we announced that we are launching cell-based coffee business activity through a new business vertical, PluriAgtech.

PluriAgtech’s new cell-based coffee business activity is leveraged by Pluri’s 3D cell expansion and has been developed to

address the growing global demand for sustainable, high-quality coffee at mass scale production.

signed an innovative proof of concept collaboration with ICL Group, a leading global specialty minerals company, to revolutionize bio

stimulant delivery and enhance yield sustainably.

Department 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 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.

Immunotherapy

In May 2024, we launched a novel allogenic 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.

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 T-cell receptor,

the MAIT cells minimize their likelihood of inducing Graft versus Host Disease, a significant advantage over other potential allogeneic

We are aiming to design the MAIT cells to potentially show better persistence in the body for a longer duration, enhancing

their therapeutic efficacy.

April 2024, we unveiled a novel method for expansion of immune cells using proprietary technology and announced we were granted a new

patent titled, “System and Methods for Immune Cells Expansion and Activation in Large Scale.” This innovative approach

ensures that the produced immune cells retain their integrity, functionality, and therapeutic efficacy, thus offering a promising solution

to meet the escalating demand for advanced cell-based therapies for immune disorders and neurodegenerative diseases.

January 2024, we launched 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 are currently

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 our PluriAgtech business vertical, which is incorporated into our wholly owned subsidiary, Coffeesai

Ltd., (b) an innovative proof-of-concept, or POC, collaboration with ICL Group Ltd., 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 a more sustainable future for agriculture.

March 2024, we announced an important expansion to our intellectual property portfolio with a new patent approval from the Israel Patent

3 unchanged sentences

critical healthcare solutions.

On January 5, 2022, we signed

definitive collaboration agreements with Tnuva Food Industries – Agricultural Cooperative in Israel Ltd., through its fully owned

subsidiary, Tnuva Food-Tech Incubator (2019), Limited Partnership, or Tnuva.

Under the definitive collaboration agreements, or the Joint

Venture Agreement, we established a new company, Ever After, with the purpose of developing cultivated meat products of all types and

Ever After is engaged in the development, manufacturing and commercialization of technology, know-how and products that will be

based on licensed products relating to the field of cultivated meat.

Our joint venture successfully

completed proof of concept in its development of cultivated meat based on our cell-based technology platform.

Ever After is also using

PluriMatrix for producing cultivated meat.

RESULTS OF OPERATIONS – THREE AND NINE

MONTHS ENDED MARCH 31, 2024 COMPARED TO THREE AND NINE MONTHS ENDED MARCH 31, 2023.

Revenues for each of the nine-month

and three-month periods ended March 31, 2024 were $230,000 and $71,000, respectively, as compared to $176,000 and $87,000, respectively,

during the nine-month and three-month periods ended March 31, 2023.

Revenues for the nine-month and three-month periods ended March 31,

2024 were mainly related to services provided to CDMO clients and revenues related to a proof of concept collaboration with ICL Group

in the agtech field.

Revenues for the nine-month and three-month periods ended March 31, 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 field.

Research and Development Expenses, Net

Research and development,

or R&D, expenses, net (costs less participation by the IIA, Horizon Europe and the NIAID) for the nine-month period ended March 31,

2024 decreased by 26% from $12,223,000 for the nine-month period ended March 31, 2023 to $9,051,000.

The decrease is mainly attributed

(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 salaries and related expenses due to the exchange rate differences related to the strength of the

dollar against the NIS, reduction in head count of 16 R&D employees (91 R&D employees on March 31, 2024, compared to 107

R&D employees on March 31, 2023) and as a result of our cost reduction and efficiency plans and (3) participation grants from the

NIAID contract, partially offset by a decrease in other participation grants, specifically the completion of the Horizon 2020 program.

2022, we announced the establishment of a joint venture with Tnuva Food Industries – Agricultural Cooperative in Israel Ltd., or

Tnuva, Ever After Foods (previously Plurinuva Ltd.), which is incorporated under the laws of the State of Israel, with the purpose of

developing cultivated meat products of all kinds and types.

Pluri’s innovative technology, Ever After Foods has rapidly advanced its scalable production platform, developing a business-to-business,

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

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.

In addition, our wholly owned subsidiary,

Pluri Biotech Ltd., and Ever After Foods executed an Amended and Restated Technology License Agreement, dated June

12, 2024, or the Amended License.

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 is 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.

OF OPERATIONS – THREE MONTHS ENDED SEPTEMBER 30, 2024 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2023.

for the three-month period ended September 30, 2024 were $326,000, as compared to $54,000 for the three-month period ended September

Revenues for the three-month period ended September 30, 2024 were mainly related to services provided to CDMO clients and revenues

related to a POC, collaboration with a leading international agriculture corporation in the agtech field.

Revenues for the three-month

period ended September 30, 2023 were mainly related to services provided to a CDMO client in the field of process and product development.

The increase in revenues is mainly attributed to the launch of new business verticals, specifically in the CDMO and agtech fields.

Cost of revenues for the three-month

period ended September 30, 2024 was $126,000.

Cost of revenues includes (1) manufacturing costs relates to our CDMO and agtech fields,

which primary consist of materials, personnel-related and overhead costs, and (2) royalties which we are obligated to pay to the European

Investment Bank, or EIB, according to the finance agreement, or the EIB Finance Agreement, executed with the EIB by us, Pluri Biotech

and Pluristem GmbH in April 2020.

We had no cost of revenues for the three-month period ended September 30, 2023.

and Development Expenses, Net

R&D expenses, net (costs

less participation by the IIA, Horizon Europe and the NIAID) for the three-month period ended March 31, 2024 decreased by 26% from $4,167,000

for the three-month period ended March 31, 2023 to $3,094,000.

The decrease is mainly attributed to the same reasons described in the

preceding paragraph.

General and Administrative Expenses

General and administrative

expenses for the nine-month period ended March 31, 2024 decreased by 16% from $8,655,000 for the nine-month period ended March 31, 2023

to $7,303,000 mainly due to:

(1) a decrease in salaries and related expenses due to the exchange rate differences relates to the strength

dollar against the NIS and as a result of our cost reduction and efficiency plan, (2) the reduction of our CEO’s salary,

whereby he waived 75% of his salary and converted it to restricted stock units, or RSUs, and options, from January 2023 through December

2023, (3) a decrease in premium expenses related to our directors and officers insurance policy, and (4) a decrease in share-based compensation

expenses related RSU expenses amortization over time.

General and administrative

expenses for the three-month period ended March 31, 2024 decreased by 17% from $3,020,000 for the three-month period ended March 31, 2023

to $2,511,000 mainly due to a decrease in share-based compensation expenses related to employee terminations and RSU expenses amortization

over time, partially offset by increased expenses related to corporate activities such as investor relations and public relations.

Other Financial Income (expenses), net

Other financial income (expenses),

net, changed from ($956,000) in financial expenses for the nine-month period ended March 31, 2023 to $1,290,000 in financial income for

the nine-month period ended March 31, 2024.

This change is mainly attributed to a decrease in exchange rate differences expenses related

to the European Investment Bank, or EIB, loan following fluctuation between the U.S.

dollar against the EURO, exchange rates income related

to NIS deposits following the strength of the U.S.

dollar against the NIS, and from increased income related to interest on deposits,

due to an increase in interest rates and income from hedging transactions.

Other financial income (expenses),

net, changed from ($441,000) in financial expenses for the three-month period ended March 31, 2023 to $362,000 in financial income for

the three-month period ended March 31, 2024.

This change is mainly attributable to a reduction in exchange rate differences expenses related

to the EIB loan following fluctuation between the U.S.

dollar against the EURO, and increased income related to interest on deposits,

due to an increase in interest rates.

Interest Expenses

Interest expenses related

to our outstanding loan received from the EIB and all changes during the nine-month and three-months periods ended March 31, 2024 versus

March 31, 2023 are attributable solely to exchange rate differences of Euro versus the U.S.

Net loss for the nine-month

and three-month periods ended March 31, 2024 was $15,482,000 and $5,390,000, respectively, as compared to net loss of $22,281,000 and

$7,758,000 for the nine-month and three-month periods ended March 31, 2023.

The decrease was due to a decrease in general and administrative

expenses and R&D expenses, as part of the implementation of our business strategy, our efforts to reduce costs pursuant to an efficiency

plan, and due to an increase in income due to the launch of new businesses such as CDMO and agtech.

less participation by the IIA, Horizon Europe and the NIAID) for the three-month period ended September 30, 2024 decreased by 3% from

$2,993,000 for the three-month period ended September 30, 2023, to $2,889,000.

The decrease is mainly attributed to (1) a decrease in

salaries and a related to reduction in head count of 9 R&D employees (90 R&D employees on September 30, 2024, compared to 99 R&D

employees on September 30, 2023) as a result of our cost reduction and efficiency plans, and (2) an increase in participation grants from

the NIAID contract, partially offset by (1) an increase in material purchases in accordance with our manufacturing needs and plans, and

(2) an increase related to subcontractors activity in NIAID and immunotherapy projects.

and Administrative Expenses

and administrative expenses for the three-month period ended September 30, 2024 increased by 3% from $2,438,000 for the three-month period

ended September 30, 2023 to $2,509,000 mainly due to:

(1) an increase in salaries and related expenses due to the reinstatement of the

salary of Mr.

Yaky Yanay, our Chief Executive Officer, or CEO (following his salary reduction from January 2023 through December 2023,

whereby he waived 75% of his salary and converted it to restricted stock units, or RSUs, and options), (2) an increase in bonus expenses

for certain employees, including our CEO and Mrs.

Chen Franco-Yehuda, our former Chief Financial Officer, or CFO, for certain performance-based

bonuses as defined in their employment agreement, (3) an increase in share-based compensation expenses related to RSUs and options which

were granted during the first quarter of fiscal year 2025 to officers and consultants, and (4) an increase in expenses related to corporate

activities, such as investor relations and public relations, partially offset by a decrease in share-based compensation expenses related

to RSU expenses amortization over time.

Financial Income (expenses), net

financial income (expenses), net, decreased from $493,000 in financial income for the three-month period ended September 30, 2023 to

$621,000 in financial expenses for the three-month period ended September 30, 2024.

This decrease is mainly attributed to exchange rate

differences expenses related to the EIB loan following fluctuation between the U.S.

dollar against the Euro and from a decrease related

to interest on deposits, due to a decrease in interest rates, offset by exchange rates income related to the New Israeli Shekel, or NIS,

deposits following the strength of the NIS against the U.S.

expenses related to our outstanding loan received from the EIB and all changes during the three-month period ended September 30, 2024

compared to the three-month period ended September 30, 2023 are attributable solely to exchange rate differences of the Euro compared

Net loss for the three-month

period ended September 30, 2024 was $6,036,000 compared to net loss of $5,098,000 for the three-month period ended September 30, 2023.

The increase is mainly due to the increase in financial expenses, net, as well as for the reasons mentioned above, partially offset by

an increase in income due to the launch of our new businesses, such as the CDMO and agtech fields.

Net loss per share attributed to shareholders

for the nine-month and three-month periods ended March 31, 2024 was $2.92 and $1.01, respectively, as compared to $5.04 and $1.52 for

the nine-month and three-month periods ended March 31, 2023.

We had net loss attributed to our non-controlling interest in Ever After

for the nine-month and three-month periods ended March 31, 2024 of $323,000 and $97,000, respectively.

For the nine-month and three-month

periods ended March 31, 2024 and 2023, we had weighted average common shares outstanding of 5,193,808, 5,221,162 and 4,402,130, 4,993,451,

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

The 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 and restricted shares issued

to directors, employees and consultants.

Liquidity and Capital Resources

As of March 31, 2024, our

total current assets were $27,367,000 and total current liabilities were $4,526,000.

On March 31, 2024, we had a working capital surplus

of $22,841,000, total equity of $1,845,000, out of which $2,201,000 is attributed to the non-controlling interest in Ever After, and an

accumulated deficit of $414,743,000.

Our cash and cash equivalents

as of March 31, 2024 amounted to $7,081,000, compared to $3,677,000 as of March 31, 2023, and compared to $5,360,000 as of June 30, 2023.

Cash balances changed in the nine months ended March 31, 2024 compared to the nine months ended March 31, 2023 for the reasons presented

Net cash used for operating

activities was $13,708,000 in the nine months ended March 31, 2024, compared to $19,960,000 in the nine months ended March 31, 2023.

decrease is mainly attributed to a decrease in net loss following the completion of clinical studies and the implementation of our cost

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

operating activities in the nine months ended March 31, 2024 and 2023 consisted primarily of payments to 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.

Investing activities provided

cash of $15,389,000 in the nine months ended March 31, 2024, compared to cash provided of $5,374,000 for the nine months ended March 31,

The investing activities in the nine-month period ended March 31, 2024 and March 31, 2023 consisted primarily of the withdrawal

of short-term deposits, net of $15,702,000 and $5,539,000, respectively.

We had no financing activities

in the nine months ended March 31, 2024.

The cash provided in the nine months ended March 31, 2023 by financing activities was related

to net proceeds of $8,034,000 related to issuances of common shares and warrants, net of issuance cost that were paid in cash, in the

December 2022 Private Placement.

Between December 13, 2022

and December 27, 2022, we 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.

On December 13, 2022, we 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, we executed securities purchase agreements

to sell, at a purchase price of $8.40 per share, up to 258,565 common shares and Warrants to purchase up to 258,565 common shares, with

an exercise price of $8.40 per share and a term of three years.

On December 15, 2022, we 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, we 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, we 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 Company issued 1,019,488 common shares and warrants that relate to the December 2022 Private Placement

and received $8,034,000 as of that date net of $435,000 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 Chief Executive Officer, 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) 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.

for the three-month period ended September 30, 2024 was $1.08 as compared to $0.96 for the three-month period ended September 30, 2023.

We had net loss attributed to our non-controlling interest in Ever After Foods for the three-month period ended September 30, 2024 of

the three-month periods ended September 30, 2024 and 2023, we had weighted average common shares outstanding of 5,459,236 and 5,166,471,

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

increase in weighted average common shares outstanding reflects the issuance of additional shares upon the vesting of RSUs and restricted

shares issued to directors, employees and consultants.

and Capital Resources

As of September 30, 2024,

our total current assets were $27,032,000 and total current liabilities were $4,583,000.

On September 30, 2024, we had a working capital

surplus of $22,449,000, total equity (deficit) of ($63,000), out of which $5,220,000 is attributed to the non-controlling interest in

Ever After Foods, and an accumulated deficit of $426,354,000.

cash and cash equivalents and restricted cash as of September 30, 2024 amounted to $3,563,000, compared to $5,548,000 as of September

30, 2023, and compared to $7,037,000 as of June 30, 2024.

Cash balances changed in the three months ended September 30, 2024 compared

to the three months ended September 30, 2023 for the reasons presented below.

cash used for operating activities was $4,064,000 in the three months ended September 30, 2024, compared to $5,857,000 in the three months

ended September 30, 2023.

Cash used in operating activities in the three months ended September 30, 2024 and 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.

activities provided cash of $585,000 in the three months ended September 30, 2024, compared to cash provided of $5,802,000 for the three

months ended September 30, 2023.

The investing activities in the three-month period ended September 30, 2024 and September 30, 2023 consisted

primarily of the proceeds from withdrawal of short-term deposits, net of $793,000 and $5,905,000, respectively.

had no financing activities in the three months ended September 30, 2024 or 2023.

December 14, 2022, 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

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 Board of Directors 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% vesting on June 30, 2023 and 50% vesting on December 31, 2023, (ii) options to purchase 62,500 common shares at

an exercise price of $16.64 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, and (iii) options to purchase

62,500 common shares at an exercise price of $20.8 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023.

were granted in January 2023 and will expire three years from the later of the vesting date or the date which the Company increased its

authorized share capital.

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 Chief Executive

Officer, or 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.

In 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 European Union to further advance our regenerative cell therapy platform, and to bring the products in our pipeline

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% vesting on June 30, 2023 and 50% vesting on December 31, 2023, (ii) options to purchase 62,500

common shares at an exercise price of $16.64 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, and (iii)

options to purchase 62,500 common shares at an exercise price of $20.8 per share, 50% vesting on June 30, 2023 and 50% vesting on December

All options were granted in January 2023 and will expire three years from the later of the vesting date or the date which the

Company increased its authorized share capital.

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 R&D in the European Union 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.

During June 2021, we received

the first tranche in the amount of €20 million pursuant to the EIB Finance Agreement.

The amount received is due to be repaid on

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

As of March 31, 2024, the interest accrued

was in the amount of €2,263,000.

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 the Company’s 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 the Company’s consolidated revenues below $350 million, 1.2% of the Company’s

consolidated revenues between $350 million and $500 million and 0.2% of the Company’s consolidated revenues exceeding $500 million.

June 2021, we received the first tranche in the amount of €20 million pursuant to the EIB Finance Agreement.

The amount received

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

As of September

30, 2024, the interest accrued was in the amount of approximately €2.6 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.

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 March 31, 2024, total grants obtained from the IIA aggregated to approximately $27,925,000 and total royalties paid

and accrued amounted to $179,000.

June 2020, we announced that we were selected as a member of the CRISPR-IL consortium, a group funded by the IIA.

CRISPR-IL brings together

the leading experts in life science and computer science from academia, medicine, and industry, to develop Artificial Intelligence, or

AI, based end-to-end genome-editing solutions.

These next-generation, multi-species genome editing products for human, plant, and animal

DNA, have applications in the pharma, agriculture, 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.

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 months.

During January 2023, we received approval for an extension of an additional 2 months

to finish the program until June 30, 2023.

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

March 31, 2024, we received total grants of approximately $775,000 in cash from the IIA pursuant to the CRISPR-IL consortium program and

we expect to receive an additional $250,000;

no amount was received during the three months ended March 31, 2024.

September 6, 2022, we announced that a €7.5 million non-dilutive grant from the European Union’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.

An amount of approximately Euro 500,000 (approximately $540,000) will be a direct grant

that will be allocated to us.

Through March 31, 2024, we received a payment of approximately $185,000 in cash, which relates to the PROTO

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.

The initiation of the PROTO clinical study is subject to regulatory approval which has

not yet been received.

July 11, 2023, we signed a three-year $4,200,000 contract with the NIAID, which is part of the NIH.

July 11, 2023, we signed a three-year $4.2 million contract with the NIAID, which is part of the NIH.

We will collaborate with the U.S.

3 unchanged sentences

The period of performance

of this contract will be from July 1, 2023 through June 30, 2024, which may be extended for an additional two-year period.

31, 2024, we have received from the NIAID approximately $790,000 and as of March 31 2024 we expect to receive an additional amount of

approximately $162,000 for activities conducted by that date.

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 $10,000,000, from time to time through A.G.P.

As of May 9, 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.

We 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

$200,000,000 (including amounts sold under the Sales Agreement).

The currency of our financial

portfolio is mainly in U.S.

dollars and we use options contracts and other financial instruments in order to hedge our exposures to currencies

other than the U.S.

of this contract will be from July 1, 2023 through June 30, 2024, with an optional extension for an additional two-year period.

June 6, 2024, the NIAID exercised its option for year two of the three-year $4.2 million contract.

During the 12 months period from July

1, 2024 through June 30, 2025, the NIAID will provide us with $1.4 million to manufacture the PLX-R18 cell therapy and to conduct both

in vitro and in vivo studies to develop PLX-R18 as a potential novel treatment for hematopoietic complications of the H-ARS.

As of September

30, 2024, we have received from the NIAID approximately $1.6 million and as of September 30, 2024 we expect to receive an additional

amount of approximately $2.2 million for activities conducted by that date.

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 November 12, 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.

October 28, 2024, we announced that the IIA will fund our collaboration with Bar-Ilan University Research and Development Company Ltd.,

or BIRAD, the commercial arm of the Bar-Ilan University in Israel, to support the continued development of MAIT cells.

This collaboration

is aimed at advancing innovative allogeneic cell therapies targeting solid tumors and multiple indications.

The IIA will fund our collaboration

with BIRAD over the next year with budget approved of approximately $148,000 allocated to us, with an option to fund an additional year.

The goal of this collaboration is to effectively integrate both technologies and advance to preclinical studies.

The program does not

include any obligation to pay royalties.

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 September 30, 2024, total grants obtained from the IIA aggregated to approximately $27.7 million and

total royalties paid and accrued amounted to $179 thousand.

June 2020, we announced that we were selected as a member of the CRISPR-IL consortium, a group funded by the IIA.

CRISPR-IL brings together

the leading experts in life science and computer science from academia, medicine, and industry, to develop AI based end-to-end genome-editing

These next-generation, multi-species genome editing products for human, plant, and animal DNA, have applications in the pharmaceutical,

agriculture, and aquaculture industries.

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 30, 2023.

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

September 30, 2024, we received total grants of approximately $1 million in cash from the IIA pursuant to the CRISPR-IL consortium program,

and we do not expect to receive any additional funds.

grants - Horizon 2020 and Horizon Europe

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

to Advanced PeRsOnalized Therapies for Osteoarthritis, or 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/II study for

the treatment of mild to moderate knee osteoarthritis.

amount of approximately Euro 500,000 (approximately $540,000) will be a direct grant that will be allocated to us.

Through September

30, 2024, we received a payment of approximately $185,000 in cash, which relates to the PROTO program.

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.

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).

currency of our financial portfolio is mainly in U.S.

dollars and we use options contracts and other financial instruments in order to

hedge our exposures to currencies other than the U.S.

For more information, please see Item 7A.

- “Quantitative and Qualitative Disclosures about Market Risk”

in the 2023 Annual Report.

- “Quantitative and Qualitative

Disclosures about Market Risk” in the 2024 Annual Report.

We have accumulated a deficit

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twelve months.

We expect to generate revenues, from collaborations and sales of licenses to use our technology or products, but in the

short and medium terms these will unlikely 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.

We are continually looking

for sources of funding, including non-diluting sources such as collaboration with other companies via licensing agreements, service agreements

under our CDMO business, joint venture and partnerships, R&D contracts such as our agreement with the NIAID, research grants such

as the IIA grants and the European Union grant, and sales of our common shares.

We believe that we have sufficient cash to fund our operations for

at least 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.

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

maintain our R&D activities.

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

and partnerships, and other non-dilutive sources such as our contract with NIAID and DoD, research grants such as the IIA grants and

the 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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis