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Item 1A. Risk Factors

2025-09-17 compared with 2024-09-18 · 676 added, 595 removed, 396 unchanged (76% of the section changed)

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are discussed more fully below and include, but are not limited to, risks related to:

we have a history of losses

and have not generated significant revenues to date.

We expect to experience future losses and do not foresee generating significant

or steady revenues in the immediate future;

we may need to raise additional

capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could

dilute our shareholders’ ownership interests, and such offers or availability for sale of a substantial number of our common

shares may cause the price of our publicly traded shares to decline;

we have a history of losses and have not generated significant revenues

We expect to experience future losses and do not foresee generating significant or steady revenues in the immediate future;

we may need to raise additional capital to meet our business requirements

in the future, and such capital raising may be costly or difficult to obtain and could dilute our shareholders’ ownership interests,

and such offers or availability for sale of a substantial number of our common shares may cause the price of our publicly traded

shares to decline;

our independent registered public accounting firm has included an explanatory

paragraph relating to our ability to continue as a going concern in its report on our audited financial statements included in this

Annual Report.

The financial statements have been prepared under the assumption that we will continue as a going concern and do not

include any adjustments that might result if we are unable to continue as a going concern;

we may become subject to claims by much larger and better funded competitors

enforcing their IP rights against us or seeking to invalidate our IP or our rights thereto;

there are inherent risks

in the manufacturing of our product candidates, including meeting relevant high regulatory standards, the failure of which could

materially and adversely affect our results of operations and the value of our business;

there are inherent risks in the manufacturing of our product candidates,

including meeting relevant high regulatory standards, the failure of which could materially and adversely affect our results of operations

and the value of our business;

if we are unable to obtain and maintain IP protection covering our

products and technology, others may be able to utilize our IP, which would adversely affect our business;

we are an international

business, and we are exposed to various global and local risks that could have a material adverse effect on our financial condition

and results of operations;

the market prices of our

common shares are subject to fluctuation and have been and may continue to be volatile, which could result in substantial losses

for investors;

we anticipate being subject

to fluctuations in currency exchange rates because a significant portion of our business is conducted outside the United States and

we are exposed to currency exchange fluctuations in other currencies such as the New Israeli Shekel, or NIS, and the Euro;

restrictions contained

in the EIB Finance Agreement may restrict our ability to conduct certain strategic initiatives;

limitations we may face

relating to the grants we have received from the IIA may impact our plans and future decisions;

if there are significant

shifts in the political, economic and military conditions in Israel and its neighboring countries, it could have a material adverse

effect on our business relationships and profitability;

it may be difficult for

investors in the United States to enforce any judgments obtained against us or some of our directors or officers;

cybersecurity incidents

may have an adverse impact on our business and operations;

recent increasing global

inflation could affect our ability to purchase materials needed for manufacturing and could increase the costs of our future product;

have a limited operating history in the field of food tech agtech and CDMO to date and our prospects

will be dependent on our ability to meet a number of challenges;

there are risks relating to our CDMO business,

including financial risks associated with contracts that could be terminated, changed or delayed, risk related to products that might

not gain market approval and risk related to providing timely services to customers in a highly competitive industry in which we

there are risks relating

to our food-tech endeavors, including changes in consumer preferences and governmental regulations relating to cultivated meat;

our business and market

potential in the field of cultivated food and cell-based coffee technology are unproven, and we have limited insight into trends

that may emerge and affect our business;

the research and development

associated with technologies for cultivated meat manufacturing is a lengthy and complex process;

we could fail to maintain

the listing of our common shares on Nasdaq, which could harm the liquidity of our shares and our ability to raise capital or complete

a strategic transaction.

we are an international business, and we are exposed to various global

and local risks that could have a material adverse effect on our financial condition and results of operations;

the market prices of our common shares are subject to fluctuation and

have been and may continue to be volatile, which could result in substantial losses for investors;

we anticipate being subject to fluctuations in currency exchange rates

because a significant portion of our business is conducted outside the United States and we are exposed to currency exchange fluctuations

in other currencies such as the New Israeli Shekel (“NIS”) and the Euro;

restrictions contained in the EIB Finance Agreement may restrict our

ability to conduct certain strategic initiatives;

limitations we may face relating to the grants we have received from

the IIA may impact our plans and future decisions;

if there are significant shifts in the political, economic and military

conditions in Israel and its neighboring countries, it could have a material adverse effect on our business relationships and profitability;

it may be difficult for investors in the United States to enforce any

judgments obtained against us or some of our directors or officers;

cybersecurity incidents may have an adverse impact on our business

and operations;

recent increasing global inflation could affect our ability to purchase

materials needed for manufacturing and could increase the costs of our future product;

we have a limited operating history in the field of FoodTech, AgTech

and CDMO to date and our prospects will be dependent on our ability to meet several challenges;

there are risks relating to our CDMO business, including financial

risks associated with contracts that could be terminated, changed or delayed, risk related to products that might not gain market

approval and risk related to providing timely services to customers in a highly competitive industry in which we operate.

there are risks relating to our food-tech endeavors, including changes

in consumer preferences and governmental regulations relating to cultivated meat;

our business and market potential in the field of cultivated food and

cell-based coffee technology are unproven, and we have limited insight into trends that may emerge and affect our business;

the research and development associated with technologies for cultivated

meat manufacturing is a lengthy and complex process;

we could fail to maintain compliance with the Audit Committee Requirements

(defined below) or to maintain the listing of our common shares on Nasdaq, which could harm the liquidity of our shares and our

ability to raise capital or complete a strategic transaction.

Risk Related to Our Business

Our independent registered public accounting

firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial

statements included in this Annual Report.

The financial statements have been prepared under the assumption that we will continue as

a going concern and do not include any adjustments that might result if we are unable to continue as a going concern.

As indicated in the independent

auditor’s report for the fiscal year ended June 30, 2025, the accompanying consolidated financial statements have been prepared assuming

that we will continue as a going concern.

Our recurring operating losses and negative cash flow raise substantial doubt about our ability

to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As of June 30, 2025, our

cash balances (cash and cash equivalents, short-term bank deposits, , restricted cash and restricted bank deposits) totaled to $21,914,000.

According to management estimates, we do not have sufficient resources to meet our operating obligations for at least twelve months from

the issuance date of the consolidated financial statements.

To sustain operations beyond this period, we will require additional capital

to sustain operations.

There can be no assurance that such financing will be available on favorable terms, or at all.

If we are unable to secure

additional capital, we may need to implement cost-containments measures, such as reducing discretionary expenditures and streamlining

While these actions may provide temporary relief, they could also delay key initiatives and negatively affect our business

We may need to raise additional financing

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history in our business of commercializing cell-based products and cell technology, and we have not generated material revenues to date.

It is not clear when we will generate material revenues or whether we will generate material revenues in the future.

We cannot give assurances

that we will be able to generate any significant revenues or income in the future.

There is no assurance that we will ever be profitable.

It is not clear whether we will generate material revenues or whether we will generate material revenues in the future.

We cannot give

assurances that we will be able to generate any significant revenues or income in the future.

There is no assurance that we will ever

be profitable.

Failure to reach an agreement with the

EIB about the repayment of the EIB Loan could adversely affect our financial condition and liquidity.

On April 30, 2020, we and

our subsidiaries, Pluri Biotech Ltd.

and Pluristem GmbH, entered into the EIB Finance Agreement for a loan in the amount of up to €50

million in the aggregate, subject to certain milestones being reached, receivable in three tranches.

During June 2021, we received the

first tranche in the amount of €20 million.

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 amount of the loan.

As of June 30, 2025, the interest accrued was in the amount of approximately

€3.27 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 of June 30, 2025, we had an accrued royalty in the amount of

$12 thousand.

We are currently in advanced

discussions with the EIB regarding a potential restructuring of the terms of the EIB Loan, which are currently focused on the new terms

of the EIB Loan, including an extension of the current maturity date of the EIB Loan.

However, there is no certainty as to the outcome

of these discussions.

If we fail to reach an agreement

with the EIB about the repayment of the EIB Loan, or if we are unable to repay the EIB Loan when due, our financial condition and liquidity

would be materially affected and it could impact our ability to continue as a going concern.

Because most of our officers and directors

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civil liability provisions of the securities laws of the United States or any U.S.

While we may seek

partners for licensing deals, joint ventures, partnerships, and direct sale of our products in various industries, there is no guarantee

we will be successful in doing so.

date, we have focused our efforts primarily in the regenerative medicine field, in the food tech field, in the CDMO field, and in the

agriculture field, but we may seek partners for licensing deals, joint ventures, partnerships, and direct sale of our products or

use of our technology in various industries.

Licensing deals, joint ventures and partnerships in new fields involve numerous risks,

including the potential integration of our technology and products in various new ways, which may or may not be successful.

projects may require significant funds, time and attention of management and other key personnel.

In addition, as we do not have

experience in areas outside of the regenerative medicine field and limited experience in the food tech, CDMO and agriculture fields,

we may lack the personnel to properly lead such initiatives.

There can be no assurance that we will be successful in finding the

relevant partners to fund and market our cell-based products.

Risks Related to Development, Clinical studies,

and Regulatory Approval of Our Product Candidates

While we may seek partners for licensing

deals, joint ventures, partnerships, and direct sale of our products in various industries, there is no guarantee we will be successful

To date, we have focused

our efforts primarily in the regenerative medicine field, in the food tech field, in the CDMO field, and in the agriculture field, but

we may seek partners for licensing deals, joint ventures, partnerships, and direct sale of our products or use of our technology in various

Licensing deals, joint ventures and partnerships in new fields involve numerous risks, including the potential integration

of our technology and products in various new ways, which may or may not be successful.

Such projects may require significant funds,

time and attention from management and other key personnel.

In addition, as we do not have experience in areas outside of the regenerative

medicine field and limited experience in the food tech, CDMO and agriculture fields, we may lack the personnel to properly lead such

There can be no assurance that we will be successful in finding the relevant partners to fund and market our cell-based

Changes in U.S.

trade policy and tariffs

may have an adverse impact on our business.

Our business involves the

importation of certain raw materials, components, and finished goods essential for our cell expansion platform and related applications.

Changes in U.S.

trade policy, including the imposition of new tariffs or modifications to existing trade agreements, could affect our

supply chain, increase costs, and impact our financial performance.

For the year ended June 30, 2025, we estimate that the impact of

tariffs currently imposed on our imports was not material.

However, we are unable to estimate the impacts of any future tariffs that

may be enacted.

While we actively monitor trade developments and assess potential impacts, the evolving nature of trade policies makes

it challenging to predict the full extent of these effects.

We may not be able to mitigate all adverse consequences, which could include

increased production costs, delays in product development, or reduced margins.

Risks Related to Development,

Clinical Studies, and Regulatory Approval of Our Product Candidates

If we are not able to conduct our clinical

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clinical trials may be delayed or terminated for many reasons, such as:

The FDA, the EMA or the

MOH does not grant permission to proceed or places trials on clinical hold;

Subjects do not enroll

in our trials at the rate we expect;

Government actions, such

as those enacted during the ongoing COVID-19 pandemic, which limit the general populations movement;

The regulators may ask

to increase subject’s population in the clinical trials;

Subjects experience an

unacceptable rate or severity of adverse side effects;

Third party clinical investigators

and other related vendors may not perform the clinical trials under the anticipated schedule or consistent with the clinical trial

protocol, GCP and regulatory requirements;

Third party clinical investigators

and other related vendors may declare bankruptcy or terminate their business unexpectedly, which most likely will result in further

delays in our clinical trials’ anticipated schedule and cause additional expenditures;

Inspections of clinical

trial sites by the FDA, EMA, MOH and other regulatory authorities find regulatory violations that require us to undertake corrective

action, suspend or terminate one or more sites, or prohibit us from using some or all of the data in support of our marketing applications;

One or more IRBs suspends

or terminates the trial at an investigational site, precludes enrollment of additional subjects, or withdraws its approval of the

If we will be unable to conduct

The FDA, the EMA or the MOH do not grant permission to proceed or places

trials on clinical hold;

Subjects do not enroll in our trials at the rate we expect;

Government actions, such as those enacted during the ongoing COVID-19

pandemic, which limit the general populations movement;

The regulators may ask to increase subject’s population in the

clinical trials;

Subjects experience an unacceptable rate or severity of adverse side

Third party clinical investigators and other related vendors may not

perform the clinical trials under the anticipated schedule or consistent with the clinical trial protocol, GCP and regulatory requirements;

Third party clinical investigators and other related vendors may declare

bankruptcy or terminate their business unexpectedly, which most likely will result in further delays in our clinical trials’

anticipated schedule and cause additional expenditures;

Inspections of clinical trial sites by the FDA, EMA, MOH and other

regulatory authorities find regulatory violations that require us to undertake corrective action, suspend or terminate one or more

sites, or prohibit us from using some or all of the data in support of our marketing applications;

One or more IRBs suspends or terminates the trial at an investigational

site, precludes enrollment of additional subjects, or withdraws its approval of the trial.

If we are unable to conduct

clinical trials properly and on schedule, marketing approval may be delayed or denied by the FDA, EMA, MOH and other regulatory authorities.

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and potential products will depend on a number of factors, including:

the clinical safety and

effectiveness of our cell therapy drug candidates and their perceived advantage over alternative treatment methods, if any;

adverse events involving

our cell therapy product candidates or the products or product candidates of others that are cell-based;

the cost of our products

and the reimbursement policies of government and private third-party payers.

the clinical safety and effectiveness of our cell therapy drug candidates

and their perceived advantage over alternative treatment methods, if any;

adverse events involving our cell therapy product candidates or the

products or product candidates of others that are cell-based;

the cost of our products and the reimbursement policies of government

and private third-party payers.

If the health care community

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Risks Related to Our Cultivated Food Business

Ever After Foods

has a limited operating history in the field of cultivated or cultured meat (hereinafter, “cultivated meat”) to date and

its prospects will be dependent on its ability to meet a number of challenges.

After Foods’ business prospects are difficult to predict due to its lack of operational history in the new and emerging food tech

field, and its success will be dependent on its ability to meet a number of challenges.

Because it has a limited operating history in

the field of cultivated meat and it is in the early stages of development, Ever After Foods may not be able to evaluate its future prospects

Ever After Foods’ prospects will be primarily dependent on its ability to successfully develop industrial scale cultivated

meat technologies and processes, and market these to its potential customers.

If Ever After Foods is not able to successfully meet these

challenges, its prospects, business, financial condition, and results of operations could be adversely impacted.

addition, Ever After Foods will be subject to changing laws, rules and regulations in the United States, Israeli, Asia Pacific, the European

Union and other jurisdictions relating to the food tech industry.

Such laws and regulations may negatively impact its ability to expand

its business and pursue business opportunities.

Ever After Foods may also incur significant expenses to comply with the laws, regulations

and other obligations that will apply to it.

Ever After Foods

is primarily focused on utilizing its technology for the development of cultivated meat, and it has limited data on the performance of

our and its technologies in the field of cultivated meat to date.

Ever After Foods does not currently have any products or technologies approved

for sale and it is still in the early stages of development.

To date, Ever After Foods has limited data on the ability of our and its

technologies to successfully manufacture cultivated meat, towards which they have devoted substantial resources to date.

Ever After Foods’

current technologies are, in large part, based on our technologies and IP.

It may not be successful in developing its technologies in

a manner sufficient to support its expected scale-ups and future growth, or at all.

Ever After Foods expects that a substantial portion

of its efforts and expenditures over the next few years will be devoted to the development of technologies designed to enable Ever After

Foods to market industrial scale cultivated meat manufacturing processes.

Ever After Foods cannot guarantee that it will be successful

in developing these technologies, based on its current roadmap, or at all.

If Ever After Foods is able to successfully develop its cultivated

meat technologies, it cannot ensure that it will obtain regulatory approval or that, following approval, upon commercialization its technologies

will achieve market acceptance.

Any such delay or failure could materially and adversely affect Ever After Foods’ financial condition,

results of operations and prospects.

Consumer preferences

for alternative proteins in general, and more specifically cultivated meats, are difficult to predict and may change, and, if we are unable

to respond quickly to new trends, Ever After Foods’ business may be adversely affected.

After Foods’ business is focused on the development and marketing of licensable cultivated meat manufacturing technologies.

demand for the cultivated meats manufactured using these technologies could change based on a number of possible factors, including dietary

habits and nutritional values, concerns regarding the health effects of ingredients and shifts in preference for various product attributes.

If consumer demand for such products decreases, Ever After Foods’ business and financial condition would suffer.

Consumer trends

that we believe favor sales of products manufactured using our licensed technologies could change based on a number of possible factors,

including a shift in preference from animal-based protein products, economic factors and social trends.

A significant shift in consumer

demand away from products manufactured using our technologies could reduce our sales or our market share and the prestige of our brand,

which would harm our business and financial condition.

We expect that

products utilizing Ever After Foods’ technologies will be subject to regulations that could adversely affect Ever After Foods’

business and operations.

manufacture, distribution and marketing of food products is highly regulated.

Ever After Foods and its suppliers and licensees, may be

subject to a variety of laws and regulations.

These laws and regulations apply to many aspects of Ever After Foods’ business, including

the manufacture, composition and ingredients, packaging, labeling, distribution, advertising, sale, quality and safety of food products

and food contact substances (including some manufacturing equipment), as well as the health and safety of our employees and the protection

of the environment.

applicable, the manufacturing equipment that will be manufactured by Ever After Foods will comply with the FDA’s regulatory requirements

for food contact substances and analogous foreign regulations.

Ever After Foods will also ensure that the edible scaffolds and any other

production materials it sells to its customers comply with applicable FDA standards.

From a regulatory perspective, in the United States,

we expect companies manufacturing finished cultivated meat products ( i.e., the companies that will license Ever After Foods’ manufacturing

technologies) to be subject to regulation by various government agencies, including the FDA, the USDA, the FTC, the Occupational Safety

and Health Administration and the Environmental Protection Agency, as well as the requirements of various state and local agencies

and laws, such as the California Safe Drinking Water and Toxic Enforcement Act of 1986.

Ever After Foods has a limited operating

history in the field of cultivated or cultured meat (hereinafter, “cultivated meat”) to date and its prospects will be dependent

on its ability to meet a number of challenges.

Ever After Foods’ business

prospects are difficult to predict due to its lack of operational history in the new and emerging food tech field, and its success will

be dependent on its ability to meet a number of challenges.

Because it has a limited operating history in the field of cultivated meat

and it is in the early stages of development, Ever After Foods may not be able to evaluate its future prospects accurately.

Foods’ prospects will be primarily dependent on its ability to successfully develop industrial scale cultivated meat technologies

and processes, and market these to its potential customers.

If Ever After Foods is not able to successfully meet these challenges, its

prospects, business, financial condition, and results of operations could be adversely impacted.

In addition, Ever After Foods

will be subject to changing laws, rules and regulations in the United States, Israeli, Asia Pacific, the European Union and other jurisdictions

relating to the food tech industry.

Such laws and regulations may negatively impact its ability to expand its business and pursue business

opportunities.

Ever After Foods may also incur significant expenses to comply with the laws, regulations and other obligations that will

Ever After Foods is primarily focused on

utilizing its technology for the development of cultivated meat, and it has limited data on the performance of our and its technologies

in the field of cultivated meat to date.

Ever After Foods does not

currently have any products or technologies approved for sale and it is still in the early stages of development.

To date, Ever After

Foods has limited data on the ability of our and its technologies to successfully manufacture cultivated meat, towards which they have

devoted substantial resources to date.

Ever After Foods’ current technologies are, in large part, based on our technologies and

It may not be successful in developing its technologies in a manner sufficient to support its expected scale-ups and future growth,

Ever After Foods expects that a substantial portion of its efforts and expenditures over the next few years will be devoted

to the development of technologies designed to enable Ever After Foods to market industrial scale cultivated meat manufacturing processes.

After Foods cannot guarantee that it will be successful in developing these technologies, based on its current roadmap, or at all.

Ever After Foods is able to successfully develop its cultivated meat technologies, it cannot ensure that it will obtain regulatory approval

or that, following approval, upon commercialization its technologies will achieve market acceptance.

Any such delay or failure could

materially and adversely affect Ever After Foods’ financial condition, results of operations and prospects.

Consumer preferences for alternative proteins

in general, and more specifically cultivated meats, are difficult to predict and may change, and, if we are unable to respond quickly

to new trends, Ever After Foods’ business may be adversely affected.

Ever After Foods’ business

is focused on the development of cultivated meat manufacturing technologies.

Consumer demand for the cultivated meats manufactured using

these technologies could change based on a number of possible factors, including dietary habits and nutritional values, concerns regarding

the health effects of ingredients and shifts in preference for various product attributes.

If consumer demand for such products decreases,

Ever After Foods’ business and financial condition would suffer.

Consumer trends that we believe favor sales of products manufactured

using our licensed technologies could change based on a number of possible factors, including a shift in preference from animal-based

protein products, economic factors and social trends.

A significant shift in consumer demand away from products manufactured using our

technologies could reduce our sales or our market share and the prestige of our brand, which would harm our business and financial condition.

We expect that products utilizing Ever

After Foods’ technologies will be subject to regulations that could adversely affect Ever After Foods’ business and operations.

The manufacture, distribution

and marketing of food products is highly regulated.

Ever After Foods and its suppliers and licensees, may be subject to a variety of

laws and regulations.

These laws and regulations apply to many aspects of Ever After Foods’ business, including the manufacture,

composition and ingredients, packaging, labeling, distribution, advertising, sale, quality and safety of food products and food contact

substances (including some manufacturing equipment), as well as the health and safety of our employees and the protection of the environment.

As applicable, the manufacturing

equipment that will be manufactured by Ever After Foods will comply with the FDA’s regulatory requirements for food contact substances

and analogous foreign regulations.

Ever After Foods will also ensure that the edible scaffolds and any other production materials it

sells to its customers comply with applicable FDA standards.

From a regulatory perspective, in the United States, we expect companies

manufacturing finished cultivated meat products ( i.e., the companies that will license Ever After Foods’ manufacturing technologies)

to be subject to regulation by various government agencies, including the FDA, the USDA, the FTC, the Occupational Safety and Health

Administration and the Environmental Protection Agency, as well as the requirements of various state and local agencies and

laws, such as the California Safe Drinking Water and Toxic Enforcement Act of 1986.

We likewise expect these products to be regulated

by equivalent agencies outside the United States by various international regulatory bodies.

as noted above, Ever After Foods will ensure that the products it sells to its customers (including manufacturing equipment and scaffolds)

comply with applicable FDA and USDA standards, we believe that our customers, as entities engaged in the manufacture, distribution, and

sale of cultivated meat products, will bear primary legal responsibility for ensuring that all finished foods produced using our technology

is wholesome and not adulterated and otherwise in compliance with applicable laws and regulations.

Consistent with food industry norms,

we expect that our customers will therefore request assurances from us that our products are suitable for their intended use under applicable

legal requirements.

manufacturing of cultivated meat is expected to be subject to extensive regulations internationally, with products subject to numerous

food safety and other laws and regulations relating to the sourcing, manufacturing, composition and ingredients, storing, labeling, marketing,

advertising and distribution of these products.

In addition, enforcement of existing laws and regulations, changes in legal requirements

and/or evolving interpretations of existing regulatory requirements may result in increased compliance costs and create other obligations,

financial or otherwise, that could adversely affect our business, financial condition or operating results.

In addition, we could be adversely

affected by violations of the U.S.

Foreign Corrupt Practices Act, or FCPA, and similar worldwide anti-bribery laws, which generally prohibit

companies and their intermediaries from making payments to foreign government officials for the purpose of obtaining or retaining business,

and require companies both to keep accurate books and records and to devise and maintain an adequate system of internal accounting controls.

While, as noted above, Ever

After Foods will ensure that the products it sells to its customers (including manufacturing equipment and scaffolds) comply with applicable

FDA and USDA standards, we believe that our customers, as entities engaged in the manufacture, distribution, and sale of cultivated meat

products, will bear primary legal responsibility for ensuring that all finished foods produced using our technology is wholesome and

not adulterated and otherwise in compliance with applicable laws and regulations.

Consistent with food industry norms, we expect that

our customers will therefore request assurances from us that our products are suitable for their intended use under applicable U.S.

requirements.

The manufacturing of cultivated

meat is expected to be subject to extensive regulations internationally, with products subject to numerous food safety and other laws

and regulations relating to the sourcing, manufacturing, composition and ingredients, storing, labeling, marketing, advertising and distribution

of these products.

In addition, enforcement of existing laws and regulations, changes in legal requirements and/or evolving interpretations

of existing regulatory requirements may result in increased compliance costs and create other obligations, financial or otherwise, that

could adversely affect our business, financial condition or operating results.

In addition, we could be adversely affected by violations

Foreign Corrupt Practices Act(“FCPA”), and similar worldwide anti-bribery laws, which generally prohibit companies

and their intermediaries from making payments to foreign government officials for the purpose of obtaining or retaining business, and

require companies both to keep accurate books and records and to devise and maintain an adequate system of internal accounting controls.

While our policies mandate compliance with anti-bribery laws, including the FCPA, our internal control policies and procedures may not

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to our business, and adverse impacts on our results of operations, cash flows and financial condition.

Any changes in,

or changes in the interpretation of, applicable laws, regulations or policies of the USDA, state regulators or similar foreign regulatory

authorities that relate to the use of the terms “meat” or “poultry” or other similar terms in connection with

cultivated meat products could adversely affect our business, prospects, results of operations or financial condition.

USDA, state regulators or similar foreign regulatory authorities, such as Health Canada or the Canadian Food Inspection Agency, or CFIA,

or authorities of the EU or the EU member states ( e.g., European Food Safety Authority, or EFSA), could take action that impacts

our customers’ ability to use the term “meat” or “poultry” or similar words, such as “beef”

or “chicken” , to describe their finished products.

In addition, a food may be deemed misbranded if its labeling is false

or misleading in any particular way, and the USDA, CFIA, EFSA or other regulators could interpret the use of the terms “meat”

or “poultry” or any similar phrase(s) to describe our customers’ cultivated meat products as false or misleading or

likely to create an erroneous impression regarding their composition.

In the U.S., the USDA intends to issue new labeling requirements

for foods under its jurisdiction produced through cell culture technology as noted in an ANPR published in September 2021.

Any changes in, or changes in the interpretation

of, applicable laws, regulations or policies of the USDA, state regulators or similar foreign regulatory authorities that relate to the

use of the terms “meat” or “poultry” or other similar terms in connection with cultivated meat products could

adversely affect our business, prospects, results of operations or financial condition.

The USDA, state regulators

or similar foreign regulatory authorities, such as Health Canada or the Canadian Food Inspection Agency (“CFIA”), or authorities

of the EU or the EU member states ( e.g., European Food Safety Authority, or EFSA), could take action that impacts our customers’

ability to use the term “meat” or “poultry” or similar words, such as “beef” or “chicken”

, to describe their finished products.

In addition, a food may be deemed misbranded if its labeling is false or misleading in any particular

way, and the USDA, CFIA, EFSA or other regulators could interpret the use of the terms “meat” or “poultry” or

any similar phrase(s) to describe our customers’ cultivated meat products as false or misleading or likely to create an erroneous

impression regarding their composition.

In the U.S., the USDA intends to issue new labeling requirements for foods under its jurisdiction

produced through cell culture technology as noted in an ANPR published in September 2021.

Our various new lines of business, including

our cell-based coffee business vertical, PluriAgtech, and Ever After Foods, are new businesses with limited operating activity to date,

our plant-based vertical (e.g.

Coffeesai and Kokomodo), and Ever After Foods, are new businesses with limited operating activity to date,

and their success is dependent on the ability to deliver a high-quality product while overcoming multiple challenges.

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our ability to meet a number of challenges.

Because our new lines of business have a limited operating history, these lines of business

may not be able to deliver a successful high-quality product at the scale production they aim to deliver.

The success of these lines of

business will be primarily, but not only, dependent on their ability to develop manufacturing solutions, and leveraging Pluri’s

Since our new lines of business have a limited operating history, these lines of business

may not be able to deliver a successful high-quality product at the scale of production they aim to deliver.

The success of these lines

of business will be primarily, but not only, dependent on their ability to develop manufacturing solutions, and leveraging Pluri’s

3D cell expansion technology to create compelling products.

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In addition, certain of our

lines of business, such PluriAgtech, Ever After Foods and Coffeesai, will be subject to changing laws, rules and regulations in the United

States, Israel, Asia Pacific, the European Union and other jurisdictions.

Such laws and regulations may negatively impact their ability

to expand their businesses and pursue business opportunities.

Our subsidiaries may also incur significant expenses to comply with the

laws, regulations and other obligations that will apply to them.

We may need to

raise additional financing to support PluriAgtech’s and Coffeesai’s business verticals and the research, development and manufacturing

of their respective products.

If we are unable to obtain additional financing to meet their needs, their operations may be adversely affected

or terminated .

It is highly likely that we

will need to raise significant additional capital from investors in the future to finance PluriAgtech’s and Coffeesai’s business

vertical operations.

Our current capital may not be sufficient to finance PluriAgtech’s and Coffeesai’s operations until we

are able to complete the development of a high-quality coffee, if that ever happens.

If we are not able to find investors and obtain additional

financing, PluriAgtech’s and Coffeesai’s operations may be adversely affected or terminated.

products utilizing our 3D cell expansion technology may be subject to regulations that could adversely affect its business and results

of operations.

In the cultivated coffee space,

we are working with an external regulatory consultant to evaluate the technical and scientific requirements for determining whether the

cultured coffee product is GRAS under section 201(s) of the FDCA and FDA’s implementing regulations (21 C.F.R.

the Coffeesai cultivated coffee product (including all of its components) is determined to be GRAS in accordance with FDA requirements,

it will be exempt from the definition of “food additive” in section 201(s) of the FDCA, and may therefore be lawfully marketed

as a food in the U.S.

without the need to obtain a premarket authorization from FDA.

However, if the Coffeesai cultivated coffee product

(including any of its components) is not determined to be GRAS, it or the particular non-GRAS component would be considered a “food

additive” under section 201(s) of the FDCA;

this, in turn, would mean that the ingredient could only be lawfully marketed in the

United States.

if it was authorized for its intended use under a food additive regulation and otherwise complied with other food safety,

facility registration, and labeling requirements.

If Coffeesai determines that the product is not authorized for its intended use under

an existing food additive regulation, Coffeesai may need to submit a food additive petition to request that FDA issue a new food additive

regulation authorizing the ingredient for its intended use.

lines of business, such as our Agtech and FoodTech lines (which include Coffeesai, Kokomodo and Ever After Foods) , will be subject to

changing laws, rules and regulations in the United States, Israel, Asia Pacific, the European Union and other jurisdictions.

and regulations may negatively impact their ability to expand their businesses and pursue business opportunities.

Our subsidiaries may

also incur significant expenses to comply with the laws, regulations and other obligations that will apply to them.

Additionally, Kokomodo faces

several key risks in connection with the development and potential commercialization of its cell-based cacao products.

First, the regulatory

landscape for cell-based cacao remains uncertain, as no regulatory agency has approved such products for commercial sale to date.

delay or failure to obtain the necessary regulatory approvals could materially impact on the timing and feasibility of market entry.

Second, the bioprocessing technology underlying Kokomodo’s platform is subject to significant technical challenges, including the

need to optimize culture media composition, fermentation conditions, and quality control systems to ensure consistency and scalability.

Finally, Kokomodo must successfully scale its technology beyond the POC stage to reach industrial-scale production.

The transition from

laboratory to commercial manufacturing involves substantial operational, financial, and technical risks, and any failure to do so may

adversely affect our ability to achieve our commercial objectives.

We may need to raise additional financing

to support our plant-based business vertical and the research, development and manufacturing of their respective products.

unable to obtain additional financing to meet their needs, their operations may be adversely affected or terminated .

It is highly likely that

we will need to raise significant additional capital from investors in the future to finance our plant-based business vertical operations.

Our current capital may not be sufficient to finance our AgTech lines of business and the plant-based operations until we are able to

complete the development of a high-quality coffee and cacao.

If we are not able to attract investors and obtain additional financing,

PluriAgTech’s and the plant-based operations may be adversely affected or terminated.

Cultivated plant-based products utilizing

our 3D cell expansion technology may be subject to regulations that could adversely affect its business and results of operations.

In connection with our cultivated

plant-based initiative, we are working with external regulatory consultants to assess the technical and scientific requirements for determining

whether the plant-based cultivated coffee products (including all components) may be considered “Generally Recognized as Safe”

(“GRAS”) under Section 201(s) of the Federal Food, Drug, and Cosmetic Act (“FDCA”) and FDA’s implementing

regulations (21 C.F.R.

If determined to be GRAS in accordance with FDA requirements, the products would be excluded from

the definition of a “food additive” under the FDCA and may be lawfully marketed in the United States without prior FDA authorization.

If the products (or any of

their components) are not determined to be GRAS, they would be classified as food additives under Section 201(s) of the FDCA.

case, the products or ingredients could only be marketed in the U.S.

if authorized for its intended use under an applicable food additive

regulation and in compliance with all other relevant FDA requirements.

If no such regulation exists, the respective plant-based initiative

may need to submit a food additive petition to request that FDA issue a new regulation authorizing the product’s intended use.

Additionally, before marketing

the cultivated coffee product in the Unites States, Coffeesai will also need to ensure that the product is labeled in accordance with

applicable FDA food labeling requirements established under section 403 of the FDCA and FDA’s implementing regulations (21 C.F.R.

Part 101), manufactured at an FDA-registered food facility pursuant to section 415 of the FDCA and FDA’s implementing regulations

Part 1, Subpart H), and manufactured in accordance with all applicable FDA food safety requirements including, but not limited

to, FDA’s Hazard Analysis and Preventive Controls and Current Good Manufacturing Practice requirements (21 C.F.R.

FDA regulatory requirements may apply if Coffeesai plans to import the cultivated coffee product into the United States, including requirements

for submitting prior notice of imported foods to FDA (21 C.F.R.

Part 1, Subpart I) and complying with Foreign Supplier Verification requirements

the plant-based products in the United States, the respective plant-based initiative must also ensure compliance with applicable FDA

food labeling requirements under section 403 of the FDCA and FDA’s implementing regulations (21 C.F.R.

Part 101), manufactured

at an FDA-registered food facility pursuant to section 415 of the FDCA and FDA’s implementing regulations (21 C.F.R.

Part 1, Subpart

H), and manufactured in accordance with all applicable FDA food safety requirements including, but not limited to, FDA’s Hazard

Analysis and Preventive Controls and Current Good Manufacturing Practice requirements (21 C.F.R.

If the cultivated plant products

are imported into the United States, additional regulatory requirements may apply, including submission of prior notice to FDA (21 C.F.R.

Part 1, Subpart I) and compliance with Foreign Supplier Verification Program requirements (21 C.F.R.

Part 1, Subpart L), as applicable.

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joint ventures or licensing arrangements, which could adversely affect our ability to develop and commercialize our product candidates.

One of the elements of our business strategy is to collaborate with

partners and to license our technology to other companies.

Our business strategy includes development and in-house manufacturing of innovative

new cell- based products and solutions powered by our 3D cell expansion technology platforms and establishing joint ventures and partnerships

that leverage our cell expansion technology and cell-based product portfolio to expand product pipelines and meet cell-based manufacturing

needs for a variety of industries.

To date, we have established Ever After Foods, a strategic partnership with Tnuva, with ICL Group for

advanced bioactive carriers and bio stimulants, with Wilk Technologies to develop cultured human breast and animal milk products and with

an undisclosed - leading international agriculture corporation to enhance the global sustainable vegetable supply.

One of the elements of our

business strategy is to collaborate with partners and to license our technology to other companies.

Our business strategy includes development

and in-house manufacturing of innovative new cell- based products and solutions powered by our 3D cell expansion technology platforms

and establishing joint ventures and partnerships that leverage our cell expansion technology and cell-based product portfolio to expand

product pipelines and meet cell-based manufacturing needs for a variety of industries.

To date, we have established Ever After Foods,

a strategic partnership with Tnuva, with ICL Group (through its Open Innovation program) for advanced bioactive carriers and bio stimulants,

and with an undisclosed leading international agriculture corporation to enhance the global sustainable vegetable supply.

Notwithstanding, we may not

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our product candidates.

Our agreements with our collaborators and licensees may have provisions

that give rise to disputes regarding the rights and obligations of the parties.

These and other possible disagreements could lead to termination

of the agreement or delays in collaborative research, development, supply, or commercialization of certain product candidates, or could

require or result in litigation or arbitration.

Moreover, disagreements could arise with our collaborators over rights to IP or our rights

to share in any of the future revenues of products developed by our collaborators.

These kinds of disagreements could result in costly

and time-consuming litigation.

Any such conflicts with our collaborators could reduce our ability to obtain future collaboration agreements

and could have a negative impact on our relationship with existing collaborators.

Our agreements with our collaborators

and licensees may have provisions that give rise to disputes regarding the rights and obligations of the parties.

These and other possible

disagreements could lead to termination of the agreement or delays in collaborative research, development, supply, or commercialization

of certain product candidates, or could require or result in litigation or arbitration.

Moreover, disagreements could arise with our

collaborators over rights to IP or our rights to share in any of the future revenues of products developed by our collaborators.

kinds of disagreements could result in costly and time-consuming litigation.

Any such conflicts with our collaborators could reduce our

ability to obtain future collaboration agreements and could have a negative impact on our relationship with existing collaborators.

The market for our cell therapy products will be heavily dependent

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Cost control initiatives could decrease the price for products that we may develop,

which would result in lower product revenues to us.

which would result in lower product revenues for us.

Risk Related to Intellectual Property

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ability to develop and protect our technology and our cell therapy products.

If our patents and proprietary rights agreements do not provide

sufficient protection for our technology and our cell therapy products, our business and competitive position will suffer.

If our patents and proprietary rights agreements do not

provide sufficient protection for our technology and our cell therapy products, our business and competitive position will suffer.

Our success will also depend

in part on our ability to develop our technology and commercialize our products without infringing the proprietary rights of others.

have not conducted full freedom of use patent searches and no assurance can be given that patents do not exist or could not be filed which

would have an adverse effect on our ability to develop our technology or maintain our competitive position with respect to our potential

cell therapy products.

If our technology components, devices, designs, products, processes or other subject matter are claimed under other

existing United States or foreign patents or are otherwise protected by third party proprietary rights, we may be subject to infringement

In such event, we may challenge the validity of such patents or other proprietary rights, or we may be required to obtain licenses

from such companies in order to develop, manufacture or market our technology or products.

There can be no assurances that we would be

able to obtain such licenses or that such licenses, if available, could be obtained on commercially reasonable terms.

Furthermore, the

failure to either develop a commercially viable alternative or obtain such licenses could result in delays in marketing our proposed products

or the inability to proceed with the development, manufacture or sale of products requiring such licenses, which could have a material

adverse effect on our business, financial condition and results of operations.

If we are required to defend ourselves against charges

of patent infringement or to protect our proprietary rights against third parties, substantial costs will be incurred regardless of whether

we are successful.

We have not conducted full freedom of use patent searches, and no assurance can be given that patents do not exist or could not be filed

which would have an adverse effect on our ability to develop our technology or maintain our competitive position with respect to our

potential cell therapy products.

If our technology components, devices, designs, products, processes or other subject matter are claimed

under other existing United States or foreign patents or are otherwise protected by third party proprietary rights, we may be subject

to infringement actions.

In such event, we may challenge the validity of such patents or other proprietary rights, or we may be required

to obtain licenses from such companies in order to develop, manufacture or market our technology or products.

There can be no assurances

that we would be able to obtain such licenses or that such licenses, if available, could be obtained on commercially reasonable terms.

Furthermore, the failure to either develop a commercially viable alternative or obtain such licenses could result in delays in marketing

our proposed products or the inability to proceed with the development, manufacture or sale of products requiring such licenses, which

could have a material adverse effect on our business, financial condition and results of operations.

If we are required to defend ourselves

against charges of patent infringement or to protect our proprietary rights against third parties, substantial costs will be incurred

regardless of whether we are successful.

Such proceedings are typically protracted with no certainty of success.

An adverse outcome could subject us to significant

liabilities to third parties and force us to curtail or cease our development of our technology and the commercialization our potential

cell therapy products.

We have built the ability to manufacture clinical grade adherent stromal

cells in-house.

Through our experience with adherent stromal cell-based product development, we have developed expertise and know-how

in this field.

We also have built the ability to grow on a large scale various immune cells including engineered placental MAIT cells

for use in cell therapy.

Additionally, we have built the ability to grow on a large scale plant cells for various agtech uses.

these expertise and know-how, our policies require confidentiality agreements with our employees, consultants, contractors, manufacturers

and advisors.

These agreements generally provide for protection of confidential information, restrictions on the use of materials and

assignment of inventions conceived during the course of performance for us.

These agreements might not effectively prevent disclosure

of our confidential information.

An adverse outcome could

subject us to significant liabilities to third parties and force us to curtail or cease our development of our technology and the commercialization

of our potential cell therapy products.

We have built the ability

to manufacture clinical grade adherent stromal cells in-house.

Through our experience with adherent stromal cell-based product development,

we have developed expertise and know-how in this field.

We also have built the ability to grow on a large scale various immune cells

including engineered placental MAIT cells for use in cell therapy.

Additionally, we have built the ability to grow on a large-scale plant

cells for various AgTech uses.

To protect this expertise and know-how, our policies require confidentiality agreements with our employees,

consultants, contractors, manufacturers and advisors.

These agreements generally provide for protection of confidential information,

restrictions on the use of materials and assignment of inventions conceived during the course of performance for us.

These agreements

might not effectively prevent disclosure of our confidential information.

Third parties may initiate legal proceedings

alleging that we are infringing their IP rights, the outcome of which would be uncertain and could have a material adverse effect on our

alleging that we are infringing their IP rights, the outcome of which would be uncertain and could have a material adverse effect on

our business.

Our commercial success depends

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infringement claims against us based on existing patents or patents that may be granted in the future.

If we are found to infringe a third

party’s IP rights, we could be required to obtain a license from such third party to continue developing and marketing our products

and technology.

If we are found to infringe a

third party’s IP rights, we could be required to obtain a license from such third party to continue developing and marketing our

products and technology.

However, we may not be able to obtain any required license on commercially reasonable terms or at all.

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We may need to seek a license for one or more of these patents.

No assurances

can be given that such a license will be available on commercially reasonable terms, if at all.

Claims that we have misappropriated the

assurances can be given that such a license will be available on commercially reasonable terms, if at all.

Claims that we have misappropriated

confidential information or trade secrets of third parties could have a similar negative impact on our business.

Even if resolved in our favor, litigation or other legal proceedings

relating to IP claims may cause us to incur significant expenses and could distract our technical and management personnel from their

normal responsibilities.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings

or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect

on the price of our common shares.

Such litigation or proceedings could substantially increase our operating losses and reduce the resources

available for development activities or any future sales, marketing or distribution activities.

We may not have sufficient financial or

other resources to adequately conduct such litigation or proceedings.

Some of our competitors are able to sustain the costs of such litigation

or proceedings more effectively than we can because of their greater financial resources.

Uncertainties resulting from the initiation

and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

The patent approval process is complex, and we cannot be

sure that our pending patent applications or future patent applications will be approved.

Even if resolved in our favor,

litigation or other legal proceedings relating to IP claims may cause us to incur significant expenses and could distract our technical

and management personnel from their normal responsibilities.

In addition, there could be public announcements about the results of hearings,

motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it

could have a substantial adverse effect on the price of our common shares.

Such litigation or proceedings could substantially increase

our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities.

We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings.

Some of our competitors

are able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources.

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse

effect on our ability to compete in the marketplace.

The patent approval process is complex,

and we cannot be sure that our pending patent applications or future patent applications will be approved.

The patent position of biotechnology

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Furthermore, there can be no assurance that others have not developed

or will not develop similar products, duplicate any of our technology or products or design around any patents that have been or may be

issued to us or any future licensors.

Since patent applications in the United States and in Europe are not publicly disclosed until patents

are issued, there can be no assurance that others did not first file applications for products covered by our pending patent applications,

nor can we be certain that we will not infringe any patents that may be issued to others.

or will not develop similar products, duplicate any of our technology or products or design around any patents that have been or may

be issued to us or any future licensors.

Since patent applications in the United States and in Europe are not publicly disclosed until

patents are issued, there can be no assurance that others did not first file applications for products covered by our pending patent

applications, nor can we be certain that we will not infringe any patents that may be issued to others.

Risk Related to Our Common

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A number of events and factors may have an adverse impact on the market price of our common shares,

of our clinical trials or adverse events associated with our products;

amount of our cash resources and our ability to obtain additional funding;

in our revenues, expense levels or operating results;

into or terminating strategic relationships;

● announcements

of technical or product developments by us or our competitors;

conditions for pharmaceutical and biotechnology shares in particular;

in laws and governmental regulations, including changes in tax, healthcare, competition and patent laws;

concerning patents or proprietary rights;

accounting pronouncements or regulatory rulings;

announcements regarding medical advances in the treatment of the disease states that we are targeting;

or proprietary rights developments;

actions that may impact our products;

sales of our common shares, or the perception of such sales;

● disruptions

in our manufacturing processes;

● competition.

results of our clinical trials or adverse events associated with our

the amount of our cash resources and our ability to obtain additional

changes in our revenues, expense levels or operating results;

entering into or terminating strategic relationships;

announcements of technical or product developments by us or our competitors;

market conditions for pharmaceutical and biotechnology shares in particular;

changes in laws and governmental regulations, including changes in

tax, healthcare, competition and patent laws;

disputes concerning patents or proprietary rights;

new accounting pronouncements or regulatory rulings;

public announcements regarding medical advances in the treatment of

the disease states that we are targeting;

patent or proprietary rights developments;

regulatory actions that may impact our products;

future sales of our common shares, or the perception of such sales;

disruptions in our manufacturing processes;

In addition, a global pandemic,

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the market price of our securities, which may not necessarily reflect the actual or perceived value of our Company.

We could fail to maintain the listing

of our common shares on Nasdaq, which could seriously harm the liquidity of our shares and our ability to raise capital or complete a

strategic transaction.

On May 28, 2024, we received

a deficiency letter, or the Nasdaq Letter, from the Listing Qualifications Department of Nasdaq, notifying us that we were not in compliance

with Nasdaq Listing Rule 5550(b)(1), which requires us to maintain a minimum of $2.5 million in stockholders’ equity for continued

listing on The Nasdaq Capital Market, or the Stockholders’ Equity Requirement, nor were we in compliance with either of the alternative

listing standards, a market value of listed securities of at least $35 million or net income of $0.5 million from continuing operations

in the most recently completed fiscal year, or in two of the three most recently completed fiscal years.

Pursuant to the Nasdaq Letter,

on July 11, 2024, we submitted a plan to Nasdaq to regain compliance, or the Compliance Plan.

Based on the Compliance Plan, Nasdaq has

determined to grant us an extension of time to regain compliance with the Stockholders’ Equity Requirement until November 24, 2024.

If we fail to evidence compliance by the required deadline, we may be subject to delisting.

At that time, we may appeal Staff’s

determination to a Hearings Panel.

we do not regain compliance with the Stockholders’ Equity Requirement, our common shares will be subject to delisting.

from Nasdaq would likely result in a reduction in some or all of the following, each of which could have a material adverse effect on

shareholders:

liquidity of our common shares;

We could fail to maintain compliance with the Audit Committee

Requirements and to maintain the listing of our common shares on Nasdaq, which could seriously harm the liquidity of our shares and our

ability to raise capital or complete a strategic transaction.

On November 25, 2024, we

received a deficiency letter (the “Nasdaq Letter”) from the Listing Qualifications Department of The Nasdaq Stock Market

LLC (the “Nasdaq”), notifying us that we are not in compliance with the Stockholders’ Equity Requirement, which requires

us to maintain a minimum of $2.5 million in stockholders’ equity, nor were in compliance with either of the alternative listing

standards, market value of listed securities of at least $35 million or net income of $500,000 from continuing operations in the most

recently completed fiscal year, or in two of the three most recently completed fiscal years.

On January 6, 2025, we submitted

a plan to regain compliance (the “Compliance Plan”).

Based on the Compliance Plan, Nasdaq determined to grant us an extension

of time to regain compliance with the Stockholders’ Equity Requirement until May 24, 2025.

On May 7, 2025, we received a letter

from Nasdaq, determining that the Company had regained compliance with Listing Rule 5550(b)(2), due to the fact that for the 10 consecutive

business days from April 22, 2025, through May 6, 2025, the market value of the Company’s listed securities was $35 million or

greater, satisfying the requirement under Rule 5550(b)(2).

Accordingly, the Company has regained compliance with the Shareholders’

Equity Requirement and remains in good standing on The Nasdaq Capital Market.

We cannot guarantee that

we will continue to comply with the Nasdaq Stockholders’ Equity Requirement.

If we fail to comply with the Nasdaq Stockholders’

Equity Requirement, Nasdaq could delist our common shares from trading on its exchange and if we are unable to obtain listing on another

national securities exchange or take action to restore our compliance with the Nasdaq continued listing requirements, we and our shareholders

could incur material adverse consequences, including a negative impact on our liquidity, our shareholders’ ability to sell shares

and our ability to raise capital

As a result of the voting

outcome at our 2025 annual meeting of shareholders (the “2025 Annual Meeting”), one of our then-current directors, who was

classified as an independent director, and acted as chairman of the Audit Committee and the sole member of the Investment Committee,

was not re-elected to our Board, and therefore ceased to serve as a director and as a member of the respective committees on which he

serves, effective June 30, 2025.

On June 30, 2025, we notified Nasdaq that due to the departure of the director, we are no longer in

compliance with Nasdaq Listing Rule 5605(c)(2)(A) (the “Audit Committee Requirements”), which requires the audit committee

to be comprised of at least three independent directors.

On July 2, 2025, we received a letter from the Listing Qualifications Department

of Nasdaq, notifying us that consistent with Listing Rule 5605(c)(4), Nasdaq will provide us a cure period to regain compliance with

Nasdaq Listing Rule 5605(c)(2)(A), which will expire on the earlier of (i) our next annual meeting of shareholders or June 30, 2026,

or (ii) if our next annual meeting of shareholders is held before December 29, 2025, then we must evidence compliance no later than June

On September 10, 2025, we appointed a new independent director to our Board, who also joined our Audit Committee.

Subsequently,

on September 11, 2025, we received a letter from Nasdaq, confirming that the Company had regained compliance with the Audit Committee

Requirement and that the matter is closed.

If we do not maintain compliance

with Nasdaq’s listing requirements, our common shares will be subject to delisting.

A delisting from Nasdaq would likely result

in a reduction in some or all of the following, each of which could have a material adverse effect on shareholders:

● The liquidity of our common shares;

market price of our common shares;

availability of information concerning the trading prices and volume of our common shares;

ability to obtain financing or complete a strategic transaction;

number of institutional and other investors that will consider investing in our common shares;

number of market markers or broker-dealers for our common shares.

intend to take all reasonable measures available to regain compliance under the Nasdaq Listing Rules and remain listed on Nasdaq.

there can be no assurance we will ultimately regain compliance with all applicable requirements for continued listing.

We intend to take all reasonable

measures available to maintain compliance with the Nasdaq’s listing Requirements and remain listed on Nasdaq.

However, there can

be no assurance that we will ultimately continue to maintain compliance with all applicable requirements for continued listing.

Future sales of our common shares may cause dilution.

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and accordingly these shareholders may experience substantial dilution.

We may also issue equity securities that provide for rights, preferences

and privileges senior to those of our common shares.

Given our need for cash and that equity raising is the most common type of fundraising

for companies like ours, the risk of dilution is particularly significant for shareholders of our company.

We may also issue equity securities that provide for rights,

preferences and privileges senior to those of our common shares.

Given our need for cash and that equity raising is the most common type

of fundraising for companies like ours, the risk of dilution is particularly significant for shareholders of our company.

Risks Related to Foreign Exchange Rates

We are exposed to fluctuations in currency exchange rates.

A significant portion of our

business is conducted outside the United States.

Therefore, we are exposed to currency exchange fluctuations in other currencies such

as the NIS and the Euro.

A significant portion of our expenses in Israel are paid in NIS, and we have also received €20 million pursuant

to the EIB Finance Agreement, that bears 4% annual interest.

All of these factors subject us to the risks of foreign currency fluctuations.

A significant portion of

our business is conducted outside the United States.

Therefore, we are exposed to currency exchange fluctuations in other currencies

such as the NIS and Euro.

A significant portion of our expenses in Israel are paid in NIS, and we have also received €20 million

pursuant to the EIB Finance Agreement, that bears 4% annual interest.

All of these factors subject us to the risks of foreign currency

fluctuations.

Our primary expenses paid in NIS are employee salaries and lease payments on our facilities.

From time to time, we may apply a hedging

strategy by using options and forward contracts to protect ourselves against some of the risks of currency exchange fluctuations and we

are actively monitoring the exchange rate differences of the NIS, Euro and U.S.

however, we are still exposed to potential losses

from currency exchange fluctuation.

From time to time, we may

apply a hedging strategy by using options and forward contracts to protect ourselves against some of the risks of currency exchange fluctuations

and we are actively monitoring the exchange rate differences of the NIS, Euro and U.S.

however, we are still exposed to potential

losses from currency exchange fluctuation.

Our cash may be subject to a risk of loss.

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We believe that our cash is held in institutions

whose credit risk is minimal and that the value and liquidity of our deposits are accurately reflected in our consolidated financial statements

as of June 30, 2024.

whose credit risk is minimal and that the value and liquidity of our deposits are accurately reflected in our consolidated financial

statements as of June 30, 2025.

Currently, we hold most of our cash assets in bank deposits in Israel.

However, nearly all of our cash and bank deposits

are not insured by the Federal Deposit Insurance Corporation, or the FDIC, or similar governmental deposit insurance outside the

United States.

Therefore, our cash and any bank deposits that we now hold or may acquire in the future may be subject to risks, including

the risk of loss or of reduced value or liquidity, particularly in light of the increased volatility and worldwide pressures in the financial

and banking sectors.

However, nearly all of our cash

and bank deposits are not insured by the Federal Deposit Insurance Corporation, or the FDIC, or similar governmental deposit insurance

outside the United States.

Therefore, our cash and any bank deposits that we now hold or may acquire in the future may be subject

to risks, including the risk of loss or of reduced value or liquidity, particularly in light of the increased volatility and worldwide

pressures in the financial and banking sectors.

Risk Related to Our Industries

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industries may adversely affect us.

There is a trend towards consolidation

in the pharmaceutical and biotechnology industries.

This consolidation trend may result in the remaining companies having greater financial

resources and technical discovery capabilities, thus intensifying competition in these industries.

This trend may also result in fewer

potential collaborators or licensees for our therapeutic product candidates.

Also, if a consolidating company is already doing business

with our competitors, we may lose existing licensees or collaborators as a result of such consolidation.

This trend may adversely affect

our ability to enter into license agreements or agreements for the development and commercialization of our product candidates, and as

a result may materially harm our business.

There is a trend towards

consolidation in the pharmaceutical and biotechnology industries.

This consolidation trend may result in the remaining companies having

greater financial resources and technical discovery capabilities, thus intensifying competition in these industries.

This trend may also

result in fewer potential collaborators or licensees for our therapeutic product candidates.

Also, if a consolidating company is already

doing business with our competitors, we may lose existing licensees or collaborators as a result of such consolidation.

This trend may

adversely affect our ability to enter into license agreements or agreements for the development and commercialization of our product

candidates, and as a result may materially harm our business.

If we do not keep pace with our competitors

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industry, of which we are a part, is very competitive and is subject to technological changes that can be rapid and intense.

We have faced,

and will continue to face, intense competition from biotechnology, pharmaceutical and biopharmaceutical companies, academic and research

institutions and governmental agencies engaged in cellular therapeutic and drug discovery activities or funding, both in the United States

and internationally.

Some of these competitors are pursuing the development of cellular therapeutics, drugs and other therapies that target

the same diseases and conditions that we target in our clinical and pre-clinical programs.

faced, and will continue to face, intense competition from biotechnology, pharmaceutical and biopharmaceutical companies, academic and

research institutions and governmental agencies engaged in cellular therapeutic and drug discovery activities or funding, both in the

United States and internationally.

Some of these competitors are pursuing the development of cellular therapeutics, drugs and other therapies

that target the same diseases and conditions that we target in our clinical and pre-clinical programs.

Some of our competitors have

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our cell therapy product candidates with consistent characteristics.

Accordingly, we are materially dependent on these suppliers for supply

of current GMP-grade materials of consistent quality.

Our ability to complete ongoing clinical trials may be negatively affected in the

event that we are forced to seek and validate a replacement source for any of these critical materials.

Accordingly, we are materially dependent on these suppliers for

supply of current GMP-grade materials of consistent quality.

Our ability to complete ongoing clinical trials may be negatively affected

in the event that we are forced to seek and validate a replacement source for any of these critical materials.

We intend to decrease our

dependency in third party suppliers for raw materials.

dependency on third party suppliers for raw materials.

To that effect we have developed a serum-free formulation which is expected to

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Achieving this significant technological challenge is expected to provide us with large-scale, highly consistent production with operational

independency from third party suppliers for standard serum, an expensive and quantity limited product.

independence from third party suppliers for standard serum, an expensive and quantity limited product.

There can be no guarantee that

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With respect to CAR/TCR-MAIT products for

immune-oncology, we are dependent upon third party suppliers for the construct of Chimeric Antigen Receptor, or CAR, or TCR, needed to

manufacture the final product;

if these third parties fail or are unable to perform in a timely manner, our ability to manufacture and

deliver the final product will be compromised.

immune-oncology, we are dependent upon third party suppliers for the construct of CAR or TCR, needed to manufacture the final product;

if these third parties fail or are unable to perform in a timely manner, our ability to manufacture and deliver the final product will

be compromised.

In addition to the placenta

used in the manufacturing process of extracting MAIT cells, the construct of CAR or TCR is needed for the manufacturing of the final product.

used in the manufacturing process of extracting MAIT cells, the construct of CAR or TCR is needed for the manufacturing of the final

The final product would be allogeneic placental derived MAIT cells transduced with CAR or TCR construct.

The construct must be manufactured

and supplied to us in sufficient quantities and in compliance with current GMP by a third party.

To meet these requirements, we have started

discussions with potential partners and manufacturers that obtain IP rights for these constructs, engaging in feasibility tests to ensure

compliance with our MAIT cells and requirements.

The construct must

be manufactured and supplied to us in sufficient quantities and in compliance with current GMP by a third party.

To meet these requirements,

we have started discussions with potential partners and manufacturers that obtain IP rights for these constructs, engaging in feasibility

tests to ensure compliance with our MAIT cells and requirements.

In addition to ensuring a

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a sufficient number of final products, i.e., CAR or TCR-MAIT products.

As a first POC, the final product will be tested for efficacy and

safety in pre-clinical setting and the process development will be finalized to allow pre-IND readiness and proceed to clinical development.

As a first POC, the final product will be tested for efficacy

and safety in pre-clinical setting and the process development will be finalized to allow pre-IND readiness and proceed to clinical development.

If these potential partners

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the construct in the MAIT cells to create sufficient number of final products will be compromised.

A cybersecurity incident, other technology disruptions

or failure to comply with laws and regulations relating to privacy and the protection of data relating to individuals could negatively

impact our business and our reputation.

We have relied on and utilize

A cybersecurity incident, other technology

disruptions, potential risks associated with AI, or failure to comply with laws and regulations relating to privacy and the protection

of data relating to individuals, could negatively impact our business and our reputation.

We have relied on and utilized

services provided by third parties in connection with our clinical trials, which services involve the collection, use, storage and analysis

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While we receive assurances from these vendors that their services are compliant with the Health Insurance

Portability and Accountability Act, or HIPAA, and other applicable privacy laws, there can be no assurance that such third parties will

comply with applicable laws or regulations.

Non-compliance by such vendors may result in liability for us which would have a material

adverse effect on our business, financial conditions and results of operations.

During November 2021, we experienced

a cybersecurity incident in which one or more third parties were able to impersonate one of our vendors by using a falsified email domain

account and asked to make a payment to a false bank account.

As a result of this incident, the third parties managed to extract a sum

of approximately $616,000 from us.

Following the incident, we hired the services of a cybersecurity investigation firm to fully access

the incident and notified the appropriate government authorities, including the banks involved in the transaction.

During February 2022,

with the assistance of local and global law enforcement agencies, we were able to recover an amount of approximately $412,000 from the

false bank account.

Together with the reimbursement received from our insurance company, we were able to recover the full amount lost.

The cybersecurity incident

has not had any material effect on our ability to meet our financial obligations, including our ability to carry out our operations and

business activities, and our investigation has confirmed that, other than the funds referenced above, none of our information or data

was stolen or damaged.

Nonetheless, despite the implementation of security measures, including the steps we have taken following the November

2021 cybersecurity incident, our internal computer systems and those of our current and future clinical research organization or CROs

and other contractors and consultants may not prevent future incidents of a similar nature or other cyber-attacks.

We are constantly exploring

new and advanced security protection measures to prevent future cybersecurity incidents.

“Cybersecurity”, for

additional information.

Future security breaches or

any material system failure events could result in a material disruption of our development programs and our business operations.

example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts

and significantly increase our costs to recover or reproduce the data.

To the extent that any disruption or security breach were to result

in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could

incur liability and the further development and commercialization of our product candidates could be delayed.

addition, we are subject to laws, rules and regulations in the Israeli, United States, the EU and other jurisdictions relating to the

collection, use and security of personal information and data.

Such data privacy laws, regulations and other obligations may require us

to change our business practices and may negatively impact our ability to expand our business and pursue business opportunities.

incur significant expenses to comply with the laws, regulations and other obligations that apply to us.

Additionally, the privacy- and

data protection-related laws, rules and regulations applicable to us are subject to significant change.

Several jurisdictions have passed

new laws and regulations in this area, and other jurisdictions are considering imposing additional restrictions.

Privacy- and data protection-related

laws and regulations also may be interpreted and enforced inconsistently over time and from jurisdiction to jurisdiction.

Any actual or

perceived inability to comply with applicable privacy or data protection laws, regulations, or other obligations could result in significant

cost and liability, litigation or governmental investigations, damage our reputation, and adversely affect our business.

Portability and Accountability Act, and other applicable privacy laws, there can be no assurance that such third parties will comply

with applicable laws or regulations.

Non-compliance by such vendors may result in liability for us, which would have a material adverse

effect on our business, financial conditions and results of operations.

Future security breaches

or any material system failure events could result in a material disruption of our development programs and our business operations.

For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval

efforts and significantly increase our costs to recover or reproduce the data.

To the extent that any disruption or security breach were

to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information,

we could incur liability and the further development and commercialization of our product candidates could be delayed.

We are constantly

exploring new and advanced security protection measures to prevent future cybersecurity incidents.

“Cybersecurity”,

for additional information.

We use AI tools in certain

administrative functions and are evaluating suitability of these technologies for broader administrative and data-processing applications.

These technologies are not embedded in our core operations or product development systems.

Potential risks include inaccuracies or biases

in AI-generated analyses, compliance challenges with emerging AI regulations, and cybersecurity vulnerabilities.

We continue to monitor

and assess AI technologies to mitigate potential impacts on our business.

In addition, we are subject

to laws, rules and regulations in the Israeli, United States, the EU and other jurisdictions relating to the collection, use and security

of personal information and data.

Such data privacy laws, regulations and other obligations may require us to change our business practices

and may negatively impact our ability to expand our business and pursue business opportunities.

We may incur significant expenses to

comply with the laws, regulations and other obligations that apply to us.

Additionally, the privacy- and data protection-related laws,

rules and regulations applicable to us are subject to significant change.

Several jurisdictions have passed new laws and regulations

in this area, and other jurisdictions are considering imposing additional restrictions.

Privacy- and data protection-related laws and

regulations also may be interpreted and enforced inconsistently over time and from jurisdiction to jurisdiction.

Any actual or perceived

inability to comply with applicable privacy or data protection laws, regulations, or other obligations could result in significant cost

and liability, litigation or governmental investigations, damage our reputation, and adversely affect our business.

Unsuccessful compliance with certain European

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The collection and use of

personal health data in the EU is governed by the provisions of the General Data Protection Regulation, or GDPR.

This directive imposes

several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals,

notification of data processing obligations to the competent national data protection authorities and the security and confidentiality

of the personal data.

The GPDR also extends the geographical scope of EU data protection law to non-EU entities under certain conditions,

tightens existing EU data protection principles and creates new obligations for companies and new rights for individuals.

Failure to comply

with the requirements of the GDPR and the related national data protection laws of the EU member States may result in fines and other

administrative penalties.

There may be circumstances under which a failure to comply with GDPR, or the exercise of individual rights under

the GDPR, would limit our ability to utilize clinical trial data collected on certain subjects.

The GDPR regulations impose additional

responsibility and liability in relation to personal data that we process, and we intend to put in place additional mechanisms ensuring

compliance with these and/or new data protection rules.

personal health data in the EU is governed by the provisions of the General Data Protection Regulation (“GDPR”).

This directive

imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to

the individuals, notification of data processing obligations to the competent national data protection authorities and the security and

confidentiality of the personal data.

The GPDR also extends the geographical scope of EU data protection law to non-EU entities under

certain conditions, tightens existing EU data protection principles and creates new obligations for companies and new rights for individuals.

Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU member States may result

in fines and other administrative penalties.

There may be circumstances under which a failure to comply with GDPR, or the exercise of

individual rights under the GDPR, would limit our ability to utilize clinical trial data collected on certain subjects.

The GDPR regulations

impose additional responsibility and liability in relation to personal data that we process, and we intend to put in place additional

mechanisms ensuring compliance with these and/or new data protection rules.

Changes to these European

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of operations and reputation.

We may be exposed to liabilities under the Foreign Corrupt Practices

Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.

We may be exposed to liabilities under

the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse

effect on our business.

We are subject to the Foreign

Corrupt Practice Act, or FCPA, and other laws that prohibit U.S.

companies or their agents and employees from providing anything of value

to a foreign official or political party for the purposes of influencing any act or decision of these individuals in their official capacity

to help obtain or retain business, direct business to any person or corporate entity or obtain any unfair advantage.

We have operations

and agreements with third parties.

Our international activities create the risk of unauthorized and illegal payments or offers of payments

by our employees or consultants, even though they may not always be subject to our control.

We discourage these practices by our employees

and consultants.

However, our existing safeguards and any future improvements may prove to be less than effective, and our employees or

consultants, may engage in conduct for which we might be held responsible for Any failure by us to adopt appropriate compliance procedures

and ensure that our employees and consultants comply with the FCPA and applicable laws and regulations in foreign jurisdictions could

result in substantial penalties or restrictions on our ability to conduct business in certain foreign jurisdictions.

Corrupt Practice Act (“FCPA”) and other laws that prohibit U.S.

companies or their agents and employees from providing anything

of value to a foreign official or political party for the purposes of influencing any act or decision of these individuals in their official

capacity to help obtain or retain business, direct business to any person or corporate entity or obtain any unfair advantage.

operations and agreements with third parties.

Our international activities create the risk of unauthorized and illegal payments or offers

of payments by our employees or consultants, even though they may not always be subject to our control.

We discourage these practices

by our employees and consultants.

However, our existing safeguards and any future improvements may prove to be less than effective, and

our employees or consultants, may engage in conduct for which we might be held responsible for Any failure by us to adopt appropriate

compliance procedures and ensure that our employees and consultants comply with the FCPA and applicable laws and regulations in foreign

jurisdictions could result in substantial penalties or restrictions on our ability to conduct business in certain foreign jurisdictions.

Violations of the FCPA may

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Any non-Israeli citizen, resident or entity that, among other things, becomes a holder of 5%

or more of our share capital or voting rights, is entitled to appoint one or more of our directors or our Chief Executive Officer, or

CEO, serves as a director of our Company or as our CEO is generally required to notify the same to the IIA and to undertake to observe

the law governing the grant programs of the IIA, the principal restrictions of which are the transferability limits described above.

the extent a company wishes to transfer its IIA-supported know-how outside of Israel (by way of sale and/or granting a license to use

the IP) – the IIA acts under the Law for the Encouragement of research, Development and Technological Innovation in the Industry

1984 and the related IIA rules and regulations, it must be preapproved by the IIA and the company may be required to pay an additional

payment to the IIA.

The minimum amount of the payment is the total sum of grants received plus interest and the maximum amount shall be

no higher than six times the total sum of grants received plus interest.

In the case that the IIA-supported company sells the IP but retains

its research and development center in Israel for at least three consecutive years, following the year of transferring the IIA-supported

or more of our share capital or voting rights, is entitled to appoint one or more of our directors or our Chief Executive Officer (“CEO”)

serves as a director of our Company or as our CEO is generally required to notify the same to the IIA and to undertake to observe the

law governing the grant programs of the IIA, the principal restrictions of which are the transferability limits described above.

extent a company wishes to transfer its IIA-supported know-how outside of Israel (by way of sale and/or granting a license to use the

IP) – the IIA acts under the Law for the Encouragement of research, Development and Technological Innovation in the Industry 1984

and the related IIA rules and regulations, it must be preapproved by the IIA and the company may be required to pay an additional payment

The minimum amount of the payment is the total sum of grants received plus interest, and the maximum amount shall be no higher

than six times the total sum of grants received plus interest.

In the case that the IIA-supported company sells the IP but retains its

research and development center in Israel for at least three consecutive years, following the year of transferring the IIA-supported

know-how outside of Israel, while maintaining at least 75% of its research and development employees in Israel – the payment will

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Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”

Recent global inflation

may adversely affect our business results.

could affect our ability to purchase materials needed to support our research, development and operational activities, which in turn could

result in higher burn rate and a higher end price of our future products.

As a result, we may not be able to effectively develop our cell-based

product candidates or cultivated meat products.

If we are not able to successfully manage inflation, our prospects, business, financial

condition, and results of operations could be adversely impacted.

Non-compliance

with environmental, social, and governance, or ESG, practices could harm our reputation, or otherwise adversely impact our business, while

increased attention to ESG initiatives could increase our costs.

across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG and sustainability practices.

market participants, including institutional investors and capital providers, are increasingly placing importance on the impact of their

investments and are thus focusing on corporate ESG practices, including the use of third-party benchmarks and scores to assess companies’

ESG profiles in making investment or voting decisions, and engaging with companies to encourage changes to their practices.

ESG ratings could lead to increased negative investor sentiment towards us or our industry.

If we do not comply with investor or stockholder

expectations and standards in connection with our ESG initiatives or are perceived to have not addressed ESG issues within our company,

our business and reputation could be negatively impacted and our share price could be materially and adversely affected, as well as our

access to and cost of capital.

we may, at times, engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) or commitments

to improve the ESG profile of our company and/or products, such initiatives or achievements of such commitments may not have the desired

effect and may be costly.

addition, we may commit to certain initiatives or goals but not ultimately achieve such commitments or goals due to factors that are both

within or outside of our control.

Moreover, actions or statements that we may take based on expectations, assumptions, or third-party

information that we currently believe to be reasonable may subsequently be determined to be erroneous or be subject to misinterpretation.

Even if this is not the case, our current actions may subsequently be determined to be insufficient by various stakeholders, and we may

be subject to investor or regulator engagement on our ESG initiatives and disclosures, even if such initiatives are currently voluntary.

In addition, increasing ESG-related regulation, such as the SEC’s climate disclosure proposal, may also result in increased compliance

costs or scrutiny.

around a company’s management of ESG matters continues to evolve rapidly, in many instances due to factors that are out of our control.

the extent ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain

employees or customers, which may adversely impact our operations.

Recent global inflation may adversely affect

our business results.

Inflation could affect our

ability to purchase materials needed to support our research, development and operational activities, which in turn could result in higher

burn rate and a higher end price of our future products.

As a result, we may not be able to effectively develop our cell-based product

candidates or cultivated meat products.

If we are not able to successfully manage inflation, our prospects, business, financial condition,

and results of operations could be adversely impacted.

Non-compliance with environmental, social,

and governance (“ESG”) practices could harm our reputation, or otherwise adversely impact our business, while increased attention

to ESG initiatives could increase our costs.

Companies across industries

are facing increasing scrutiny from a variety of stakeholders related to their ESG and sustainability practices.

Certain market participants,

including institutional investors and capital providers, are increasingly placing importance on the impact of their investments and are

thus focusing on corporate ESG practices, including the use of third-party benchmarks and scores to assess companies’ ESG profiles

in making investment or voting decisions, and engaging with companies to encourage changes to their practices.

Unfavorable ESG ratings

could lead to increased negative investor sentiment towards us or our industry.

If we do not comply with investor or stockholder expectations

and standards in connection with our ESG initiatives or are perceived to have not addressed ESG issues within our company, our business

and reputation could be negatively impacted and our share price could be materially and adversely affected, as well as our access to

and cost of capital.

While we may, at times, engage

in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) or commitments to improve the ESG profile

of our company and/or products, such initiatives or achievements of such commitments may not have the desired effect and may be costly.

In addition, we may commit

to certain initiatives or goals but not ultimately achieve such commitments or goals due to factors that are both within or outside of

Moreover, actions or statements that we may take based on expectations, assumptions, or third-party information that we

currently believe to be reasonable may subsequently be determined to be erroneous or be subject to misinterpretation.

Even if this is

not the case, our current actions may subsequently be determined to be insufficient by various stakeholders, and we may be subject to

investor or regulator engagement on our ESG initiatives and disclosures, even if such initiatives are currently voluntary.

increasing ESG-related regulations, may also result in increased compliance costs or scrutiny.

Expectations around a company’s

management of ESG matters continue to evolve rapidly, in many instances due to factors that are out of our control.

To the extent

ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain employees

or customers, which may adversely impact our operations.

Since we have signed the EIB Finance Agreement,

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of future potential dividends and our engaging with other banks and financing entities for other loans.

Our principal research and development and

manufacturing facilities are located in Israel and the unstable military and political conditions of Israel may cause interruption or

suspension of our business operations without warning.

Our principal research and

development and manufacturing facilities are located in Israel.

As a result, we are directly influenced by the political, economic, and

military conditions affecting Israel.

Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place

between Israel and its Arab neighbors.

On October 7, 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip

and conducted a series of attacks on civilian and military targets.

Hamas also launched extensive rocket attacks on Israeli population

and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel.

the attack, Israel’s security cabinet declared war against Hamas and the Israeli military began to call-up reservists for active

At the same time, and because of the war declaration against Hamas, the clash between Israel and Hezbollah in Lebanon has escalated

to an armed conflict and there is a high possibility that it will turn into a greater regional conflict in the future.

According to the recent guidelines

of the Israeli government, the Company’s offices, which are located in Haifa, are open and functioning as usual.

However, if the

war will escalate and expand further to the Northern border with Lebanon, and the Israeli government will impose additional restrictions

on movement and travel, our management and employees’ ability to effectively perform their daily tasks might be temporarily disrupted,

which may result in delays in some of our projects.

Our principal research and development

and manufacturing facilities are located in Haifa, Israel and military conditions in Israel, including the armed conflict between Israel

and terrorist organizations from the Gaza Strip, Lebanon and Yemen, tensions with regional countries hostile to Israel such as Iran -

may cause interruption or suspension of our business operations without warning.

Our principal R&D and

manufacturing facilities are located in Haifa, Israel, thus, political, economic, and military conditions in Israel, and in particular,

conflicts involving Israel and terrorist organizations such as Hamas in the Gaza Strip, Hezbollah in Lebanon, and Ansar Allah (Houthis)

in Yemen, the conflict with Iran, as well as tensions with regional countries hostile to Israel, may directly affect our business.

As of the date of this Annual

Report, there has been no material impact on our operations.

According to the recent guidelines of the Israeli government, the Company’s

offices in Haifa are open and functioning;

however, if a war will escalate or expand, with one or more of the countries or organizations

in conflict with Israel, this situation may change and the Israeli government may impose certain 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.

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, none of our employees have been called up for active military

The intensity and duration

of Israel’s current war against Hamas and Hezbollah 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.

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, two of our employees, neither of which is an executive

officer, have been called for active military reserve duty.

The war’s implications,

including but not only the war’s economic implications, on the Company’s business and operations and on Israel’s economy

in general are difficult to predict.

Such 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

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the economic and political problems in the Middle East, we cannot predict whether or in what manner these problems will be resolved.

and acts of terrorism have resulted in significant damage to the Israeli economy, including reducing the level of foreign and local investment.

Wars and acts of terrorism have resulted in significant damage to the Israeli economy, including reducing the level of foreign and local

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

What changed 10-K

Item 1A. Risk Factors