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Item 7. Management’s Discussion and Analysis

2025-09-17 compared with 2024-09-18 · 415 added, 280 removed, 74 unchanged (90% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion

and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the

notes thereto contained elsewhere in this Annual Report.

Certain information contained in the discussion and analysis set forth below

includes forward-looking statements that involve risks and uncertainties.

Our actual results may differ materially from those discussed

in any forward-looking statement because of various factors, including those described in the sections titled “Cautionary Note

Regarding Forward-Looking Statements” and “Risk Factors” in this Annual Report.

We are a biotechnology company,

with an advanced cell-based technology platform.

We have developed a unique 3D technology platform for cell expansion with an industrial

scale in-house GMP cell manufacturing facility.

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

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

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

Our operations are focused

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

technologies providing potential solutions for various industries.

leveraging our proprietary cell expansion platform to develop scalable, cell-based solutions across the healthcare, food, and agriculture

Through a collaborative network of ventures, the Company is advancing a diverse pipeline of products and services, including

cultivated food, regenerative medicine, and cell-based ingredients.

We have developed a unique 3D, technology platform for cell expansion

with an industrial-scale cell manufacturing facility operated in accordance with GMP standards, currently on a self-declared basis.

are utilizing our technology across the field of regenerative medicine, immunotherapy, food tech, CDMO, and AgTech, and plan to utilize

it in industries and verticals that have a need for our mass scale and cost-effective cell expansion platform via partnerships, joint

ventures, licensing agreements and other types of collaborations.

Our operations are dedicated

to the research, development, and manufacturing of cell-based products, as well as the commercialization of cell therapeutics and related

technologies aimed at delivering innovative solutions across a range of industries, as described in detail under Item 1.

and as set forth below:

We use our advanced cell-based

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

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

Our PLX cells can be administered to patients off-the-shelf,

without blood or tissue matching or additional manipulation prior to administration.

PLX cells are believed to release a range of therapeutic

proteins in response to the patient’s condition.

In the pharmaceutical area,

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

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

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

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

In July 2023, we announced

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

Under such contract, we will collaborate with

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

disease that can result from nuclear disasters and radiation exposure.

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

area in medicine where effective treatments are currently insufficient.

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

offer substantial potential benefits compared to conventional T cells.

Placental MAIT cells are potent effector cells,

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

their migration directly to tumor sites.

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

our MAIT cells are designed to be allogenic universal product.

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

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

We are designing the

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

that we signed a three-year $4.2 million contract with the NIAID, under which we were to collaborate with the AFRRI and the USUHS, in

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

that can result from nuclear disasters and radiation exposure.

On April 15, 2025, we received formal notice from NIAID that the contract

was being terminated for the Government’s convenience, effective immediately.

The termination was not related to any performance

issues on our part, and we received funding for activities conducted up to the effective date.

As of the date of this Annual Report,

we received a total of $2.3 million under the contract.

In March 2025, we announced

that we entered into an exclusive collaboration agreement with Hemafund, aiming to establish a strategic initiative for stockpiling,

local distribution, and potential clinical advancement of our PLX-R18 cell therapy as a countermeasure for H-ARS, in Ukraine.

The collaboration

aims to build capacity for up to 12,000 doses of PLX-R18, which will be stored and managed by Hemafund to ensure rapid deployment in

the event of a radiation-related emergency.

The parties also intend to pursue external funding to support manufacturing, stockpiling,

and potential clinical trials of PLX-R18 for regulatory registration in Ukraine.

If successful, the collaboration could potentially generate

over $100 million in value for the parties, based on projected demand and dose estimates.

Immunotherapy MAIT cells:

In May 2024, we launched a novel immunotherapy platform utilizing MAIT cells specifically designed to address solid tumors.

In April 2024, we unveiled

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

patent titled, “System

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

In October 2024, we announced

that the IIA approved funding for our collaboration with BIRAD, the commercial arm of Bar-Ilan University, to support the continued development

of placental-derived MAIT cells for the treatment of solid tumors.

As part of this collaboration, novel Siglec-based Chimeric Switch

Receptors (“CCR”), developed by Professor Cyrille Cohen, Head of the laboratory of tumor immunology and immunotherapy at

Bar-Ilan University, will be integrated into our CAR-MAIT cell therapy platform to enhance tumor specificity and therapeutic efficacy.

The collaboration leverages our proprietary MAIT cell technology alongside BIRAD’s expertise in engineering clinically optimized

T-cell modification vectors.

The IIA has committed to fund the collaboration for an initial term of one year, with an option to extend

for an additional year, subject to IIA approval.

The total approved budget for the first year is NIS 549,067 (approximately $163,000).

As of the date of this Annual Report, we have received approximately $29,000 from the IIA for this project.

In April 2025, we announced

that the USPTO has issued a patent covering our immune cell expansion technologies.

Additionally, we announced that we were issued a

patent in Israel, which mirrors a previously granted U.S.

Following these recent patent grants, our intellectual property

estate includes over 250 patents pending, allowed, and granted.

In January 2024, we

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

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

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

We have signed several agreements with clients and generating revenues

from PluriCDMO™.

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

(a) cell-based

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

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

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

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

PluriCDMO™, as

well as other services.

We have signed several agreements with clients and generating revenues from PluriCDMO™.

We are actively involved

in several initiatives leveraged by Pluri’s 3D cell expansion in the AgTech field, which include:

(a) an innovative POC collaboration

with ICL, a leading global specialty minerals company, through its Open Innovation program, to revolutionize bio stimulant delivery and

enhance yield sustainably;

(b) a strategic POC agreement

with a leading international agriculture corporation aimed at boosting the global vegetable product supply, streamlining supply chains,

and promoting a more sustainable future for agriculture.

coffee and cacao through business activities operated via our subsidiaries, Coffeesai and Kokomodo, respectively:

In 2024, we established Coffeesai

Ltd., an Israeli company focused on developing cultivated, cell-cultured coffee.

Coffeesai has successfully

demonstrated a proof-of-concept coffee beverage, validating the potential of its technology.

Ongoing efforts are focused on enhancing

flavor and aroma profiles through bioprocess optimization and downstream refinement.

In parallel, Coffeesai is exploring research and

development collaborations aimed at accelerating development and commercialization with leading global coffee suppliers.

A third-party

techno-economic assessment has confirmed the cost-competitiveness of the platform at scale, supporting its commercial viability.

On January 23, 2025, the

Company entered into a binding term sheet (“Term Sheet”) for the purchase of certain shares representing approximately 79%

of the equity of Kokomodo, for an aggregate purchase price of $4.5 million, payable in common shares of the Company.

Following the execution

of the Term Sheet, on March 13, 2025, the Company and our wholly owned subsidiary, Pluri Biotech, (collectively, the “Purchaser”),

entered into a Share Purchase Agreement (the “Share Purchase Agreement”), effective as of March 12, 2025, with Chutzpah Holdings

Limited (“Chutzpah”), a company wholly owned by Mr.

Alejandro Weinstein, and Plantae Bioscience Ltd.

a corporation controlled by Mr.

Weinstein (collectively, the “Seller”), pursuant to which, on April 28, 2025, the Seller

sold to the Purchaser 400,000 ordinary shares and 175,000 preferred seed-1 shares (the “Purchased Shares”), representing

approximately 79% of the equity of Kokomodo, for an aggregate purchase price of $4.5 million, payable in 976,139 of our common shares

(the “Consideration Shares”).

Pursuant to the Share Purchase Agreement, the Seller also transferred, assigned and conveyed

in favor of the Purchaser a convertible loan, pursuant to an assignment and assumption agreement (the “Assignment Agreement”),

reflecting a principal aggregate amount of $0.5 million (together with the Purchased Shares, the “Purchased Interests” and

such transactions are referred to as the “Kokomodo Transaction”).

Kokomodo is an innovative

startup, pioneering the sustainable production of cacao using cellular agriculture technology.

Instead of relying on traditional tropical

farming, Kokomodo cultivates real cacao directly from plant cells in controlled environments, such as bioreactors, making climate-resilient

cacao accessible year-round on a global scale.

Founded in 2024, Kokomodo aims to transform the cacao industry, reducing environmental

impact while ensuring a steady, high-quality supply for chocolate and related products.

In March 2024, we announced

an important expansion to our IP portfolio with a new patent approval from the IPO, that is designed to reshape the agricultural technology

landscape and represents a major breakthrough in our proprietary 3D bioreactor technology, enabling efficient cultivation of plant cells

across various applications, from sustainable agriculture to critical healthcare solutions.

In 2022, we announced the

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

of developing cultivated meat product of all kinds and types.

Leveraging Pluri’s innovative

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

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

and texture akin to conventional animal-derived meat.

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

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

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

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

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

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

of the license to include fish and seafood.

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

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

establishment of a joint venture with Tnuva - Ever After Foods, with a purpose to develop and commercialize scalable production technologies

for cultivated meat, supporting the development of a wide range of cultivated meat products by industry partners.

In June 2024, we entered

into the Agreement, by and among Ever After Foods, Tnuva, and certain other international investors, pursuant to which Ever After Foods

issued and sold ordinary shares in a private placement offering, or the Offering, for aggregate gross proceeds of $10 million.

of the Offering, we invested $1.25 million.

In addition, our wholly owned subsidiary, Pluri Biotech, and Ever After Foods executed the Amended

and Restated Technology License Agreement, expanding the scope of the license to include fish and seafood.

The $10 million funding round

was intended to support Ever After Foods’ B2B technology platform, positioning it as a sustainable technology enabler.

the closing of the Offering, our wholly owned subsidiary, Pluri Biotech, holds approximately 69% of Ever After Foods.

In February 2025, Ever After

Foods announced a strategic collaboration with Bühler, to jointly advance scalable cultivated meat production systems specifically

designed for the food industry.

The parties intend to develop and deploy manufacturing equipment that enables food producers to efficiently

produce cultivated meat at significantly reduced costs and at volumes suitable for market entry.

RESULTS OF OPERATIONS – YEAR ENDED JUNE 30, 2025 COMPARED

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June 30, 2025 were $1,336,000, compared to $326,000 for the year ended June 30, 2024.

The revenues in the year ended June 30, 2024 were

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

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

The increase in revenues is mainly

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

The revenues for the years ended June 30, 2025

and 2024, were primarily generated from services provided to CDMO clients for process and product development, as well as income from

fees in the AgTech sector.

The increase in revenues is mainly attributed to higher services provided to CDMO clients and additional revenues

from POC collaboration in the AgTech field.

Cost of Revenues

of revenues for the year ended June 30, 2025 were $682,000, compared to $4,000 for the year ended June 30, 2024.

Cost of revenues for

the year ended June 30, 2025 includes manufacturing costs related to our CDMO and AgTech fields, which primary consist of materials,

personnel-related and overhead costs.

Cost of revenues for the year ended June 30, 2024, includes royalties which we are obligated to

pay to the IIA.

Research and Development, Net

Research and development,

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

net (costs less participation by the IIA, Horizon Europe and the NIAID) increased by 3% from $12,446,000 for the year ended June 30,

2024, to $12,851,000 for the year ended June 30, 2025.

The decrease is mainly attributed to:

(1) a decrease in clinical studies expenses

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

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

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

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

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

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

The increase is mainly attributed to (1) an increase related to subcontractors

in immunotherapy and AgTech projects and an increase due to write off provisions in clinical studies following its completion, partially

offset by (2) a decrease in materials costs related to a supplier credit and a decrease due to material purchases in line with our manufacturing

needs and plans, (3) a decrease in participation by NIAID, and (4) a decrease in R&D expenses due to classification of expenses into

cost of revenues.

General and Administrative

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

The decrease is mainly attributed to:

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

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

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

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

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

dollar against the NIS and as a result of our cost

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

Total Financial Income (Expense), Net

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

income for the year ended June 30, 2024.

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

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

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

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

transactions in the previous period.

General and administrative

expenses decreased by 0.5% from $10,034,000 for the year ended June 30, 2024, to $9,979,000 for the year ended June 30, 2025.

This decrease

was primarily driven by a reduction in share-based compensation expenses, mainly attributed to employee terminations and amortization

of restricted stock units (“RSUs”) expenses over time.

This reduction was partially offset by:

(1) an increase in salaries

and related expenses due to the reinstatement of the salary of Mr.

Yaky Yanay, our CEO (following his salary reduction from January 2023

through December 2023, whereby he waived 75% of his salary and converted it to RSUs, and options), (2) an increase in salaries and related

expenses due to reinstatement of temporary reduction in employees’ regular working hours for a limited period in December 2023,

(3) an increase in bonus expenses for certain employees, including our CEO and Mrs.

Chen Franco-Yehuda, our former Chief Financial Officer

(“CFO”), related to performance-based bonuses pursuant to their respective employment agreements, and (4) increased share-based

compensation expenses related to RSUs and options granted during the prior year to employees, officers, directors and consultants.

Financial Income (expenses), Net

Financial income (expenses),

net, decreased from $1,680,000 in financial income for the year ended 2024 to $206,000 in financial expenses for the year ended June

This decrease is mainly attributed to (1) exchange rate differences expenses related to the EIB Loan pursuant to the EIB Finance

Agreement, following fluctuation between the U.S.

dollar against the Euro, (2) a decrease in interest income from deposits, resulting

from lower interest rates and reduced deposit levels due to withdrawals, and (3) a decrease due to exchange rate expenses on a lease

liability due to the strength of the NIS against the U.S Dollar, partially offset by (4) an increase in income from hedging transactions,

and (5) an increase in income from change in fair value of warrant and pre-funded warrant liabilities.

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.

Interest Expenses

expenses related to our outstanding balance of the EIB Loan and all changes during the year ended June 30, 2025, compared to the year

ended June 30, 2024, are attributable solely to currency rate differences of the Euro compared to the U.S.

Net Loss for the Year

Net loss decreased from $28,887,000

Net loss increased from $21,344,000

for the year ended June 30, 2024, to $23,250,000 for the year ended June 30, 2025.

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

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

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

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

The increase in net loss was mainly due to exchange

rate differences expenses as mentioned above.

We had a net loss attributed to our non-controlling interest in Ever After Foods for the

year ended June 30, 2024 of $456,000, and $667,000 for the year ended June 30, 2025 with respect to Ever After Foods and Kokomodo.

Loss per share for the year

ended June 30, 2024, was $3.99, as compared to $6.24 loss per share for the year ended June 30, 2023.

The change in the loss per share

was mainly as a result of a decrease in the loss for the year, and by an increase in our weighted average number of shares due to the

issuance of additional shares during fiscal year 2024.

ended June 30, 2025, was $3.56, compared to $3.99 loss per share for the year ended June 30, 2024.

The change in the loss per share was

primarily due to an increase in the loss for the year, as well as an increase in our weighted average number of shares outstanding resulting

from the issuance of additional shares due to the Offering (as defined below), the Second Offering (as defined below) and the investment

in Kokomodo during fiscal year 2025.

Liquidity and Capital Resources

As of June 30, 2024, our total

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

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

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

As of June 30, 2023, our total

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

As of June 30, 2025, our

total current assets were $22,095,000 and our total current liabilities were $32,328,000.

On June 30, 2025, we had a working capital

deficit of $10,233,000 and an accumulated deficit of $443,055,000.

As of June 30, 2024, our

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

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

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

Our cash, cash

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

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

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

reasons presented below.

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

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

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

June 30, 2024, for the reasons presented below.

Our cash used in operating

activities was $18,021,000 during the year ended June 30, 2024, and $22,857,000 during the year ended June 30, 2023.

The decrease in cash

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

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

management team and other employees.

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

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

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

Our cash, cash equivalents

and restricted cash as of June 30, 2025, amounted to $6,317,000, which reflects a decrease of $720,000 from the $7,037,000 reported as

of June 30, 2024.

Our cash equivalents and restricted cash decreased in the year ended June 30, 2025.

Our bank deposits and restricted

bank deposits as of June 30, 2025, amounted to $15,597,000 compared to $23,836,000 as of June 30, 2024.

Our bank deposits and restricted

bank deposits as of June 30, 2025 decreased for the year ended June 30, 2025.

The cash, cash equivalents, restricted cash, bank deposits

and restricted bank deposits decreased for the reasons presented below.

Cash used in operating activities

increased to $18,211,000 for the year ended June 30, 2025, from $18,021,000 in the prior year, primarily due to a reduction in grants

received from the IIA, Horizon Europe, and NIAID contract funding, effect of exchange rate, continued payments to suppliers, subcontractors,

professional service providers, and employees, partially offset by an increase in customer receivable and in income from hedging transactions.

Cash provided by investing

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

ended June 30, 2023.

activities was $8,026,000 during the year ended June 30, 2025, and cash provided by investing activities during the year ended June 30,

2024 was $10,584,000.

Cash provided by investing activities in the year ended June 30, 2025 consisted primarily of the withdrawal of

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

Cash provided by investing

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

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

$9,271,000 of short-term deposits, net and cash related to the Kokomodo Transaction of $373, partially offset by payments of $1,618,000

related to investments in property and equipment.

Cash provided by investing activities in the year ended June 30, 2024 consisted primarily

of the withdrawal of $10,907,000 of short-term deposits, partially offset by payments of $323,000 related to investments in property

and equipment.

Financing activities provided

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The financing

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

The financing

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

2022 Private Placement (as defined below).

December 13, 2022 and December 27, 2022, the Company entered into a series of securities purchase agreements with several purchasers for

an aggregate of 1,019,488 common shares and warrants, or the Warrants, to purchase up to 1,019,488 common shares, or the December 2022

Private Placement.

On December 13, 2022, the Company executed securities purchase agreements to sell at a purchase price of $8.24 per

share, up to 697,486 common shares and warrants to purchase up to 697,486 common shares, with an exercise price of $8.24 per share and

a term of three years.

On December 14, 2022, the Company executed securities purchase agreements to sell at a purchase price of $8.4 per

share, up to 258,565 common shares and warrants to purchase up to 258,565 common shares, with an exercise price of $8.4 per share and

a term of three years.

On December 15, 2022, the Company executed securities purchase agreements to sell at a purchase price of $8.48

per share, up to 29,688 common shares and warrants to purchase up to 29,688 common shares, with an exercise price of $8.48 per share and

a term of three years.

On December 19, 2022, the Company executed a securities purchase agreement to sell at a purchase price of $8.72

per share, up to 16,875 common shares and warrants to purchase up to 16,875 common shares, with an exercise price of $8.72 per share and

a term of three years.

On December 27, 2022, the Company executed a securities purchase agreement to sell at a purchase price of $8.96

per share, up to 16,875 common shares and warrants to purchase up to 16,875 common shares, with an exercise price of $8.96 per share and

a term of three years.

The Warrants sold in the December 2022 Private Placement are exercisable upon the later of six months from their

issuance date, or from the date the Company increased its authorized shares.

The Company issued 1,019,488 common shares and Warrants that

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

The Warrants sold in the December

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

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

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

to its articles of incorporation reflecting such increase.

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

activities during the year ended June 30, 2025 related primarily to net proceeds received from the Offering (as defined below) and

the Second Offering (as defined below).

The financing activities during the year ended June 30, 2024 related primarily to the investment

in Ever After Foods by external investors.

On December 14, 2022,

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

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

for equity grants issuable under our existing equity compensation plans.

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price of $8.96 per share.

In addition, the Boards also agreed to grant Mr.

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

of 3 years, with the following terms:

In addition, the Board agreed to grant Mr.

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

3 years, with the following terms:

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

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will expire on April 27, 2026.

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

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

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

Yanay, our CEO, for the

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

Franco – Yehuda,

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

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

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

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

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

on July 23, 2020.

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

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

of our common shares from time to time through Jefferies.

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

under the ATM Agreement.

On September 7, 2023, we provided

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

On February 13, 2024, we entered

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

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

As of September 17,

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

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

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

SEC using a “shelf” registration process.

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

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

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

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

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

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

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

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

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

The amount received

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

As of June 30,

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

In addition to the interest payable, the EIB is also

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

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

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

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

In July 2025, Mr.

to forgo 25% percent of his monthly cash salary for a period of six months commencing July 2025.

On February 13, 2024, we

entered into a sales agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners (“A.G.P”), as agent,

pursuant to which we may issue and sell our common shares having an aggregate offering price of up to $10 million, from time to time

through A.G.P.

As of September 17, 2025, we have sold an aggregate of 42,729 common shares pursuant to the Sales Agreement at an average

price of $5.93 per share.

We have an effective Form

S-3 registration statement (File No.

333-273347), filed under the Securities Act of 1933, as amended, with the SEC using a “shelf”

registration process.

Under this shelf registration process, we may, from time to time, sell our common shares, preferred stock and warrants

to purchase common shares, and of two or more of such securities, in one or more offerings for an aggregate initial offering price of

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

In April 2020, we and our

subsidiaries, Pluri Biotech and Pluristem GmbH, executed the EIB Finance Agreement for non-dilutive funding of up to €50 million

in the aggregate, payable in three tranches.

The proceeds from the EIB Finance Agreement were intended to support our R&D in the

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

funding period under the EIB Finance Agreement was three years commencing on January 1, 2020.

During June 2021, we received

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

The amount received is due to be repaid on

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

We are currently in advanced discussions

with the EIB regarding a potential restructuring of the EIB Loan terms, 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.

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.

Since the initial funding period under the

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

January 23, 2025, we entered into the Securities Purchase Agreement with a company wholly owned by Mr.

Alexandre Weinstein (the “Investor”)

relating to a private placement offering (the “Offering”) of:

(i) 1,383,948 of our common shares, par value $0.00001 per

share, (ii) pre-funded warrants (the “Pre-Funded Warrants”), to purchase up to 26,030 common shares, and (iii) warrants (the

“Common Warrants”), to purchase up to 84,599 common shares.

On April 25, 2025, we entered into an amendment to the Securities

Purchase Agreement, pursuant to which we and the Investor agreed to exchange 976,139 of the common shares for additional Pre-Funded Warrants

to purchase up to 976,139 common shares.

The Offering price per share and accompanying warrant was $4.61.

The Pre-Funded Warrants have

an exercise price of $0.0001 per share, are exercisable at any time following the receipt of certain approvals from our shareholders,

which is required by the applicable rules of the Nasdaq Capital Market, and until exercised in full.

The Common Warrants have an exercise

price of $5.568 per share, are exercisable following the receipt of approval from our shareholders, and will be exercisable for three

years following the date of receipt of such approval.

Such approval for the exercise of Pre-Funded Warrants and Common Warrants was sought

and obtained at our 2025 Annual Meeting on June 30, 2025.

The Pre-Funded Warrants and Common Warrants contain customary anti-dilution

provisions and were subject to a 19.99% beneficial ownership limitation until the approval from our shareholders was obtained.

The Securities

Purchase Agreement contains customary representations and warranties and agreements of the Company and the Investor and customary indemnification

rights and obligations of the parties.

to the terms of the Securities Purchase Agreement, we appointed Mr.

Weinstein to our Board, effective February 5, 2025, and agreed to

recommend his election to our shareholders provided that he continues to hold at least 10% of our issued and outstanding common shares.

gross proceeds from the Offering were $6.5 million and we intend to use the proceeds from the Offering for working capital and general

corporate purposes.

The Offering closed on February 5, 2025, following the satisfaction of customary closing conditions.

March 13, 2025, we entered into a Share Purchase Agreement effective as of March 12, 2025 (the “Share Purchase Agreement”),

with Chutzpah, a company wholly owned by Mr.

Alexandre Weinstein, and Plantae, a corporation controlled by Mr.

Weinstein (collectively,

the “Seller”), pursuant to the terms of a term sheet entered into on January 23, 2025.Pursuant to the Share Purchase Agreement,

on April 28, 2025, the Seller (i) sold to us 400,000 ordinary shares and 175,000 preferred seed-1 shares, representing approximately

79% of the equity of Kokomodo.

(the “Purchased Interest”), and (ii) transferred, assigned and conveyed in favor of the Purchaser

a convertible loan, pursuant to the Assignment Agreement, reflecting a principal aggregate amount of $0.5 million.

consideration of the sale, transfer and conveyance of the Purchased Interest, we paid the Seller an aggregate purchase price of $4.5

million, which was paid in 976,139 of our common shares.

April 28, 2025, we completed the Kokomodo Transaction.

Kokomodo continues to operate as an independent company and is majority-owned

by our wholly owned subsidiary, Pluri Biotech.

February 3, 2025, we entered into an additional Securities Purchase Agreement, with Merchant Adventure Fund L.P., an existing investor

of the Company, relating to a private placement offering, (the “Second Offering”), of:

(i) 759,219 of our common shares,

par value $0.00001 per share, and (ii) warrants, to purchase up to 45,553 common shares.

The Second Offering price per share and accompanying

warrant is $4.61.

The Second Offering warrants have an exercise price of $5.568 per share and a term of three years commencing on the

date of issuance.

On March 19, 2025, the Second Offering closed, and the Company received gross proceeds in the amount of $3.5 million,

which it intends to use for working capital and general corporate purposes.

Non-dilutive grants

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In the absence of such sales, no payment

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

and accrued amounted to $179 thousand.

The IIA may impose certain

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

manufacturing out of Israel.

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

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

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

Through June 30, 2025, total grants obtained from the IIA aggregated to approximately $28.2 million and total royalties

paid and accrued amounted to $179 thousand.

The IIA may impose certain conditions on any

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

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

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

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

In June 2020, we announced

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in life science and computer science from academia, medicine, and industry, to develop AI based end-to-end genome-editing solutions.

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

and aquaculture industries.

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

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

During October 2021, we received an approval for

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

of eighteen months.

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

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

agriculture, and aquaculture industries.

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

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

During October 2021, we

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

an additional period of eighteen months.

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

the program until June 30, 2023.

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

Through June 30, 2024, we received total

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

$253 thousand.

EU grants – Horizon

2020 and Horizon Europe

Through June 30, 2024, we

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

On September 6, 2022, we announced

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

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

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

Final approval of the grant

is subject to completion of the consortium agreement.

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

direct grant that will be allocated to us.

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

to the PROTO program.

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

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

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

Through June 30, 2025, we received total grants

of approximately $1 million in cash from the IIA pursuant to the CRISPR-IL consortium program, and we do not expect to receive any additional

On October 28, 2024, we announced

that the IIA will fund our collaboration with the BIRAD, to support the continued development of MAIT cells for the treatment of solid

As part of this collaboration, novel CCR, developed by Prof.

Cohen, will be integrated into our CAR-MAIT cell therapy platform

to enhance tumor specificity and therapeutic efficacy.

The collaboration leverages our proprietary MAIT cell technology alongside BIRAD’s

expertise in engineering clinically optimized T-cell modification vectors.

The IIA has committed to fund the collaboration for an initial

term of one year, with an option to extend for an additional year, subject to IIA approval.

The total approved budget for the first year

is NIS 549,067 (approximately $163,000).

EU grants – Horizon 2020 and Horizon

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

to the PROTO, an international collaboration led by Charité.

The goal of the PROTO project is to utilize our PLX-PAD cells in

a Phase I/II study for the treatment of mild to moderate knee osteoarthritis.

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

As of the date of this

Annual Report, we have received a payment of approximately $330,000 in cash as part of the PROTO program.

In June 2025, the clinical

study was approved by the PEI.

The study is conducted at Charité together with an international consortium and under the leadership

of Professor Tobias Winkler, Principal Investigator, at the Berlin Institute of Health Center of Regenerative Therapies, Julius Wolff

Institute and Center for Musculoskeletal Surgery.

We have accumulated a deficit

of $443,055,000 since our inception in May 2001.

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

We do not anticipate generating significant revenues from sales of products in the next

twelve months.

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

from licenses to use our technology and products.

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

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

We may be required to obtain

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

development activities.

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

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

European Union grants, and sales of our common shares.

We believe that we have sufficient

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

While we have made meaningful progress in reducing our burn rate in recent years, it is unlikely that near-term revenues

will exceed our operating costs.

We may need to secure additional sources of liquidity to support the commercialization of our products

and technologies, as well as to sustain our ongoing R&D activities.

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.

We are addressing our liquidity issues by implementing initiatives to allow the continuation of our activities.

Our current operating

plan includes various assumptions concerning the level and timing of cash outflows for operating activities and capital expenditures,

which includes a cost-reduction plan should it be unable to raise sufficient additional capital.

Our ability to successfully

carry out our business plan, is primarily dependent upon our ability to (1) obtain sufficient additional capital, (2) enter licensing

or other commercial, partnerships and collaboration agreements, (3) provide CDMO services to clients, (4) finalize discussions with the

EIB regarding loan restructuring and (5) receive other sources of funding, including non-diluting sources such as grants.

assurances, however, that we will be successful in obtaining an adequate level of financing needed for the long-term development and

commercialization of our products, or any financing at all.

In the event that we unable to obtain the required level of financing, our

operations may need to be scaled down or discontinued.

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 our consolidated

financial statements, which was September 17, 2025.

These conditions raise substantial doubt about our ability to continue as a going

Application of Critical Accounting Policies and Estimates

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of our financial condition and results of operations is based on our financial statements, which we prepared in accordance with U.S.

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets

and liabilities, as well as the reported revenues and expenses during the reporting periods.

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of

assets and liabilities, as well as the reported revenues and expenses during the reporting periods.

We evaluate such estimates and judgments

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other factors that we believe are reasonable under the circumstances.

Actual results may differ from these estimates under different assumptions

or conditions.

Actual results may differ from these estimates under different

assumptions or conditions.

Share-Based Compensation

Share-based compensation is

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

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

Share-based compensation

is considered a critical accounting policy because of the significant expenses of RSUs which were granted to our employees,

directors and consultants.

In fiscal year 2025, we recorded share-based compensation expenses related to options, restricted shares

(“RS”) and RSUs in the amount of $2,143,000.

In accordance with ASC 718,

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

the grant date.

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

therefore, their fair value was equal

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

of grant was calculated using the Monte Carlo model.

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

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

RSUs granted to employees and directors are measured at their fair value on the grant date.

All RSUs granted in fiscal years 2025 and

2024 were granted for no consideration.

Therefore, their fair value was equal to the share price at the date of grant.

The RSUs and RS

granted in fiscal year 2025 to non-employee consultants were measured at their fair value on the grant date in accordance with ASU No.

2018-07 - “Compensation Share Compensation”.

The value of the portion of

the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in our consolidated statements

The value of the portion

of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in our consolidated statements

of operations.

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

QUANTITATIVE AND

QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Business Combination

We allocate the fair value

of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated

The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities

is recorded as goodwill.

Such valuations require our management to make significant estimates and assumptions, especially with respect

to intangible assets.

Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash

flows from acquired technology and other intangible assets, their useful lives and discount rates.

Our management’s estimates of

fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result,

actual results may differ from estimates.

During the measurement period, which should not exceed one year from the acquisition date, we

may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill.

Upon the conclusion

of the measurement period, any subsequent adjustments are recorded to earnings.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis