Pluri Inc. 10-Q

Item 1A. Risk Factors. In addition to the other information set forth in this report, you should carefully consider the factors discussed below and in Part I, “Item 1A. Risk Factors” of our 2024 Annual Report, which could materially affect our business, financial condition or future results. Our principal research, development and manufacturing facilities are located in Haifa, Israel and the escalated military conditions of Israel may cause interruption or suspension of our business operations without warning. Our principal R&D and manufacturing facilities are located in Haifa, Israel. Due to the ongoing armed conflict between Israel and Hamas, Hezbollah in Lebanon, Iran and other Arab terrorists’ groups, there is a high possibility risk that it will turn into a greater regional conflict in the near future. Most recently, the war has escalated and expanded further from the Northern border of Israel with Lebanon. Consequently, there has been a major increase in the amount and frequency of the attacks on Israel, and on Haifa in particular. According to the recent guidelines of the Israeli government, the Company’s offices in Haifa are open and functioning, however, if the war will escalate and expand even further, the Israeli government may impose additional restrictions on movement and travel, which will affect our management and employees’ ability to effectively perform their daily tasks, and may result in disruptions and delays in some of our projects. Any hostilities involving Israel, terrorist activities, political instability or violence in the region, or the interruption or curtailment of trade or transport between Israel and its trading partners could make it more difficult for us to raise capital, if needed in the future, and adversely affect our operations and results of operations and the market price of our common shares. In addition, to the extent the IIA no longer makes grants similar to those we have received in the past, it could adversely affect our financial results. Furthermore, certain of our employees may be obligated to perform annual reserve duty in the Israel Defense Forces and are subject to being called up for active military duty at any time. Many Israeli citizens who have served in the army are required to perform reserve duty until they reach the age of 40 or older, depending upon the nature of their military service. Currently, three of our employees have been called up for active military duty. The intensity and duration of Israel’s current war is difficult to predict, as are such war’s economic implications on the Company’s business and operations and on Israel’s economy in general. These events may be intertwined with wider macroeconomic indications of a deterioration of Israel’s economic standing, for instance, a downgrade in Israel’s credit rating by rating agencies, which may have a material adverse effect on the Company and its ability to effectively conduct its operations. In addition, Israeli-based companies and companies doing business with Israel, have been the subject of an economic boycott by members of the Arab League and certain other predominantly Muslim countries since Israel’s establishment. Although Israel has entered into various agreements with certain Arab countries and the Palestinian Authority, and various declarations have been signed in connection with efforts to resolve some of the economic and political problems in the Middle East, we cannot predict whether or in what manner these problems will be resolved. Wars and acts of terrorism have resulted in significant damage to the Israeli economy, including reducing the level of foreign and local investment.