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Item 8. Financial Statements and Supplementary Data

2025-09-17 compared with 2024-09-18 · 923 added, 628 removed, 560 unchanged (73% of the section changed)

FINANCIAL STATEMENTS

AND SUPPLEMENTARY DATA.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

AND ITS SUBSIDIARIES CONSOLIDATED

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Consolidated Statements of Operations F-6

Statements of Changes in Shareholders’ Equity F-6

Statements of Changes in Shareholders’ Equity (Deficit) F-7

Consolidated Statements of Cash Flows F-9

Notes to Consolidated Financial Statements F-10

Report of Independent Registered Public Accounting

Report of Independent

Registered Public Accounting Firm

To the Board of Directors and Shareholders of Pluri Inc.

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present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its

operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States

operations and its cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United

States of America.

Substantial Doubt about the Company’s

Ability to Continue as a Going Concern

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1c to the consolidated financial

statements, the Company has incurred recurring losses and negative cash flows from operating activities and has an accumulated deficit

as of June 30, 2025 and the loan received from European Investment Bank (“EIB”) is due on June 1, 2026.

These circumstances

raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described

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

Basis for Opinion

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reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to

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a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is

a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated

to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and

Critical Audit Matters

The critical audit matters communicated below

are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated

to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and

(ii) involved our especially challenging, subjective, or complex judgments.

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in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Liquidity and capital resources

As discussed in Note 1c to the consolidated financial

statements, management believes that its cash and cash equivalent, restricted cash, and short-term bank deposit as of June 30, 2024, are

sufficient to satisfy the Company’s capital needs for at least twelve months from the date of the issuance of these consolidated financial

The Company has been funded primarily through offerings of the Company’s securities and borrowings.

Management expects

that the Company will incur additional losses as it continues to focus its resources on advancing research and development activities

as well as commercial operations, which will result in negative cash flows from operating activities.

In case that the Company is unable

to obtain the required level of financing, operations may need to be scaled down or discontinued.

As discussed in Note 1c to the consolidated financial statements, management

believes that its cash and cash equivalents, restricted cash, and short-term bank deposits as of June 30, 2025, are not sufficient to

meet its operating obligations for at least twelve months from the date of the issuance of these consolidated financial statements.

Company has been funded primarily through offerings of the Company’s securities and borrowing.

Management expects that the Company

will incur additional losses as it continues to focus its resources on advancing research and development activities as well as commercial

operations, which will result in negative cash flows from operating activities.

In addition, the loan received from the European Investment

Bank (“EIB”) is due on June 1, 2026.

In case the Company is unable to obtain the required level of financing and to restructuring

its EIB loan, operations may need to be scaled down or discontinued.

The principal considerations for our determination

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regarding the Company’s future cash flows and management’s judgments and assumptions in estimating these cash flows to conclude

the Company would have sufficient liquidity to fund its operations for at least the next twelve months.

the Company would not have sufficient liquidity to fund its operations for at least twelve months.

This in turn led to a high degree

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among others, testing the reasonableness of the forecasted revenue, operating expenses, and uses and sources of cash used in management’s

assessment of whether the Company has sufficient liquidity to fund its operations for at least the next twelve months.

We assessed the

appropriateness of the forecast assumptions by comparing prior period forecasts to actual results, comparing forecasted revenue to signed

agreements and other references, inquiring of management regarding the process and related controls and investigating mitigating actions

to manage cash flows to meet the Company’s budget.

assessment of whether the Company has sufficient liquidity to fund its operations for at least twelve months.

We assessed the appropriateness

of the forecast assumptions by comparing prior period forecasts to actual results, comparing forecasted revenue to signed agreements

and other references, inquiring of management regarding the process and related controls and investigating mitigating actions to manage

cash flows to meet the Company’s forecasts.

Valuation of intangible assets - Kokomodo Transaction

As discussed in Note 1d to the consolidated financial

statements, on April 28, 2025, the Company completed the acquisition of Kokomodo Ltd.

(“Kokomodo”) for a total consideration

of $4,639 thousand.

The acquisition was accounted for using the acquisition method of accounting.

This resulted in $2,823 thousand of intangible assets recorded on the date of acquisition.

Fair value is estimated using

a multi-period excess earnings method under the income approach.

Management’s cash flow projections for the intangible assets included

significant judgments and assumptions relating to revenue growth rates and a discount rate .

The principal considerations for our determination

that performing procedures relating to the valuation of the intangible assets acquired in the Kokomodo transaction is a critical audit

matter are (i) the significant judgment by management when determining the fair value estimate of the intangible assets;

degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions

related to the revenue growth rates and discount rate;

and (iii) the audit effort involved using professionals with specialized skill

and knowledge.

Addressing the matter involved performing procedures

and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures

included, among others, (i) understanding management’s process for determining the fair value estimate;

(ii) evaluating the appropriateness

of the multi-period excess earnings method under the income approach used by management;

(iii) testing the completeness and accuracy

of underlying data used in the model;

and (iv) evaluating the reasonableness of the significant assumptions used by management related

to the revenue growth rates and discount rate.

Evaluating management’s assumptions related to the revenue growth rates and discount

rate involved evaluating whether the assumptions used by management were reasonable considering the consistency with external market

and industry data.

Professionals with specialized skills and knowledge were used to assist in evaluating (i) the appropriateness of the

multi-period excess earnings method and (ii) the reasonableness of the discount rate assumption.

/s/ Kesselman & Kesselman

Certified Public Accountants (lsr.)

Certified Public Accountants (Isr.)

A member firm of PricewaterhouseCoopers International

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Restricted cash

Customer receivables

Prepaid expenses and other current assets

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Property and equipment, net

Intangible assets, net

Operating lease right-of-use asset

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Dollars in thousands (except share and per share data)

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES

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Accrued vacation and recuperation

Advances from customers

Loan from the European Investment Bank, or EIB

Other accounts payable

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Operating lease liability

Loan from the European Investment Bank, or EIB

Deferred tax liabilities

Loan from EIB

Total long-term liabilities

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY

SHAREHOLDERS’ EQUITY (DEFICIT)

Share capital:

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Accumulated deficit

Total shareholders’ equity

Total shareholders’ (deficit) equity

Non-controlling interests

Total equity (deficit)

Total liabilities and equity

(*) Less than $1

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

The accompanying notes are an integral part of the consolidated

financial statements.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF

Dollars in thousands (except share and per share data)

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Research and development expenses

participation by the NIAID, the IIA, Horizon Europe and other parties

participation by the NIAID, the IIA and Horizon Europe (defined below)

Research and development expenses, net

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Total financial income (expenses), net

Loss before taxes

Net loss attributed to non-controlling interests

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Basic and diluted loss per share

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

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

Weighted average number of shares

used in computing basic and diluted loss per share

The accompanying notes are an integral part of the consolidated

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AND ITS SUBSIDIARIES

STATEMENTS OF CHANGES IN SHAREHOLDERS’

Dollars in thousands (except share and per share data)

STATEMENTS OF CHANGES IN

SHAREHOLDERS’ EQUITY

Common Shares

Dollars in thousands (except share and per share data)

Shareholders’

Balance as of July 1, 2022

Additional Paid-in

Total Shareholders’

Non- controlling

of July 1, 2023

$ ( 399,584 )

Share-based compensation to employees, directors, and non-employee consultants (note 9(2))

Issuance of common shares and warrants related to the December 2022 Private Placement, net of issuance costs of $ 445

Modification of warrants to non-controlling interests (note 1e)

Expiration of warrants in Ever After Foods (note 1e)

Share-based compensation

to employees, directors, and non-employee consultants (note 11(2))

Issuance of common shares under a sales agreement with A.G.P./Alliance Global Partners, or A.G.P., net of issuance costs of $ 162 (see note 11(1))

Issuance of Ever After Foods’

(defined below) shares to non-controlling interests (note 11(1)

Round-up of shares due to

reverse share split effectuated on April 1, 2024 (see note 11(1))

Balance as of June 30, 2024

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(*) Less than $1

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

The accompanying notes are an integral part of the consolidated

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AND ITS SUBSIDIARIES

STATEMENTS OF CHANGES IN SHAREHOLDERS’

STATEMENTS OF CHANGES IN

SHAREHOLDERS’ EQUITY (DEFICIT)

Dollars in thousands (except share and per share data)

Shareholders’ Equity

Shareholders’ Equity (Deficit)

Common Shares

Shareholders’

Additional Paid-in

Total Shareholders’ Equity

Non- controlling

Balance as of July 1, 2024

$ ( 420,472 )

Share-based compensation to employees, directors, and non-employee consultants (note 11(2))

Issuance of common shares under a sales agreement with A.G.P, net of issuance costs of $ 162 (see note 9(1))

Issuance of Ever After Foods’ shares to non-controlling interests (note 1f)

Round-up of shares due to reverse share split effectuated on April 1, 2024 (see Note 1d)

Issuance of common shares and warrants related to February 2025 offering, net of issuance costs of $ 420 (see note 11(1))

Common Warrants and Pre-Funded Warrants (defined below) reclassification to equity

Issuance of common shares related to Kokomodo Transaction (defined below), net of issuance costs of $ 47 (note 1d)

Balance as of June 30, 2025

See note 1d regarding reverse share split

$ ( 443,055 )

The accompanying notes are an integral part of the consolidated

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AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF

Dollars in thousands (except share and per share amounts)

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

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

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

Depreciation and amortization

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

Decrease in fair value of warrant and pre-funded warrant liability

Decrease (increase) in customer receivable

Decrease (increase) in prepaid expenses and other current assets

and other long-term assets

Decrease in trade payables

Decrease in other accounts payable and accrued expenses

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

Increase (decrease) in other accounts payable, accrued vacation

and recuperation, deferred tax liabilities and accrued expenses

Increase in advances from customers

Increase in operating lease right-of-use asset and liability,

Decrease (increase) in interest receivable on short-term deposits

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

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

Accrued severance pay, net

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

and restricted cash

Increase in short-term interest payable and exchange rate differences

related to the EIB loan, net

Decrease in accrued severance pay, net

Net cash used for operating activities

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Purchase of property and equipment

Proceeds from withdrawal of short-term deposits, net

Proceeds from short-term deposits, net

Cash related to Kokomodo Transaction (defined

Net cash provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Issuance of common shares, net of issuance costs

Issuance of Ever After Foods’ shares to non-controlling interests

Issuance of common shares, pre-funded warrants and warrants, net

of issuance costs

Issuance costs related to issuance of shares in Kokomodo Transaction

(defined below)

Issuance of Ever After Foods’ shares

to non-controlling interests

Net cash provided by financing activities

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

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

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

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

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

EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS

AND RESTRICTED CASH

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

and restricted bank deposits

Cash, cash equivalents, restricted cash

and restricted bank deposits at the beginning of the period

Cash, cash equivalents, restricted cash

and restricted bank deposits at the end of the period

Reconciliation of cash, cash equivalents and

restricted cash reported in the consolidated balance sheets:

Cash and cash equivalents

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Long-term restricted bank deposits

Total cash, cash equivalents, restricted cash and restricted bank deposits

Total cash, cash equivalents,

restricted cash and restricted bank deposits

(a) Supplemental disclosure of non-cash activities:

Purchase of property and equipment on credit

Lease liabilities arising from obtaining right-of-use assets

The accompanying notes are an integral part of the consolidated

financial statements.

AND ITS SUBSIDIARIES

Kokomodo Transaction (defined below)

Lease liabilities arising from obtaining

right-of-use assets

The accompanying notes are an integral part

of the consolidated financial statements.

ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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has a wholly owned subsidiary, Pluri-Biotech Ltd.

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

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

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

Ever After Foods is incorporated under the laws of Israel, which followed the execution of the collaboration agreement with Tnuva Food Industries – Agricultural Cooperative in Israel Ltd., through its fully owned subsidiary, Tnuva Food-Tech Incubator (2019), Limited Partnership, or Tnuva.

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

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

The Company is a bio-technology company with an advanced cell-based

technology platform, which operates in one operating segment.

The Company has developed a unique three-dimensional technology platform

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

Pluri currently uses its

technology in the field of regenerative medicine, food tech and agricultural technology or agtech and launched a Contract Development

and Manufacturing Organization or CDMO business and plans to utilize its technology in industries and verticals that have a need for a

mass scale and cost-effective cell expansion platform.

Pluri is focused on the research, development and manufacturing of cell-based products

and the business development of cell therapeutics and cell-based technologies providing potential solutions for various industries.

(formerly Pluristem Ltd.), hereinafter referred to as the Subsidiary, which is incorporated under the laws of the State of Israel.

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

In January 2022, the Subsidiary established another subsidiary, Ever After Foods Ltd., hereinafter referred to as Ever After Foods, which is incorporated under the laws of the State of Israel.

This establishment of Ever After Foods followed the execution of a collaboration agreement with Tnuva Food Industries – Agricultural Co-Operative in Israel Ltd., through its fully owned subsidiary, Tnuva Food-Tech Incubator (2019), Limited Partnership, hereinafter referred to as Tnuva.

In March 2024, the Subsidiary established another wholly owned subsidiary, Coffeesai Ltd., herein referred to as Coffeesai, incorporated under the laws of Israel, with the purpose of developing cultivated coffee.

In April 2025, Pluri and the Subsidiary completed the acquisition of 79 % of the equity in, Kokomodo Ltd.

(formerly known as Nibble Cacao Ltd.), hereinafter referred to as Kokomodo, which was incorporated under the laws of the State of Israel in January 2024, with the purpose of developing cultivated cacao production.

Pluri, together with the Subsidiary, the German Subsidiary, Ever After Foods, Coffeesai and Kokomodo are herein referred to as the Company or Pluri.

The Subsidiary, the German Subsidiary, Ever After Foods, Coffeesai and Kokomodo are collectively herein referred to as the Subsidiaries.

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

Pluri has developed a unique three-dimensional cell expansion platform, supported by an in-house, industrial-scale cell manufacturing facility operated in accordance with Good Manufacturing Practice, or GMP, standards, currently on a self-declared basis.

Pluri currently applies its this technology across the fields of regenerative medicine, food technology, and agricultural technology, or AgTech.

In addition, Pluri has launched a Contract Development and Manufacturing Organization, or CDMO, business and intends to expand the application of its platform to other industries and business sectors requiring scalable and cost-efficient cell expansion solutions.

Pluri is 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.

The Company has incurred an accumulated deficit of approximately $ 443,055 and incurred recurring operating losses and negative cash flows from operating activities since inception.

As of June 30, 2024, the Company’s total shareholders’ equity amounted to $ 96 .

As of June 30, 2025, the Company’s total shareholders’ deficit amounted to $ 6,842 .

During the year ended June 30, 2025, the Company incurred losses of $ 23,250 and its negative cash flow from operating activities was $ 18,211 .

The Company will be required to identify additional liquidity resources in the near term in order to support the commercialization of its products and maintain its research and development activities.

As of June 30, 2025, the Company’s cash balances (cash and cash equivalents, short-term bank deposits, restricted cash and restricted bank deposits) totaled to $ 21,914 .

The Company plans to continue to finance its operations from its current resources, by entering into licensing or other commercial, partnerships and collaboration agreements, by providing CDMO services to clients, from grants and contracts to support its research and development activities and from sales of its equity securities.

The Company’s management believes that its current resources together with its existing operating plan, are sufficient for the Company to meet its obligations as they come due at least for a period of twelve months from the date of the issuance of these consolidated financial statements.

During 2023 and 2024, the Company also implemented a cost reduction and efficiency plan.

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

The Company is addressing its liquidity issues by implementing initiatives to allow the continuation of its activities.

The Company’s current operating plan includes various assumptions concerning the level and timing of cash outflows for operating activities and capital expenditures.

The Company’s ability to successfully carry out its business plan is primarily dependent upon its 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, as detailed below, and (5) receive other sources of funding, including non-dilutive sources such as grants.

There is no assurance, however, that the Company will be successful in obtaining an adequate level of financing needed for the long-term development and commercialization of its products, or any financing at all.

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

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

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

As of June 30, 2024, the linked principal and interest accrued balance was of $ 24,027 and is presented among long-term liabilities (see note 7).

AND ITS SUBSIDIARIES

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- GENERAL (CONT.)

Reverse share split

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

and (b) issued and outstanding common shares.

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

All common shares, options, warrants and securities convertible or exercisable into common shares, as well as loss per share, have been adjusted to give retroactive effect to this reverse share split for all periods presented.

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

On January 5, 2022, the Subsidiary entered into a Joint Venture Agreement with Tnuva pursuant to which the Subsidiary and Tnuva established Ever After Foods, with the purpose of developing cultivated meat products.

Ever After Foods received exclusive, global, royalty bearing licensing rights to use Pluri’s proprietary technology, intellectual property and knowhow in the field of cultivated meat.

Tnuva invested $ 7,500 in Ever After Foods and received 187,500 of Ever After Foods’s ordinary shares, representing 15.79 % of the Ever After Foods share capital as of February 24, 2022, or the Closing Date.

In addition, Tnuva received warrants to invest up to an additional $ 7,500 over a period of twelve months following the Closing Date.

The first warrant, or the First Warrant issued to Tnuva permitted Tnuva to purchase up to 125,000 ordinary shares of Ever After Foods at an exercise price of $ 40.00 per share and had a term commencing as described in the agreement.

In addition, on the six month anniversary of the Closing Date, and provided that the First Warrant had not expired, Ever After Foods agreed to issue a second warrant, or the Second Warrant and together with the First Warrant, or the Warrants) to Tnuva which permitted Tnuva to purchase up to a number of ordinary shares of Ever After Foods , or the then most senior securities issued by Ever After Foods , in consideration for such amount equal to 200 % of the remaining balance of the aggregate purchase price of the First Warrant, provided that Tnuva exercised at least 62,500 ordinary shares at a price per share of $ 40.00 , or $ 2,500 in the aggregate, of the First Warrant.

The Second Warrant’s exercise price per share equaled $ 76.00 .

The Second Warrant had a term commencing as described in the agreement.

The Company allocated the total consideration of $ 7,500 received in an amount equal to $ 6,718 for the ordinary shares and $ 782 for the Warrants.

On January 5, 2022, the Company determined the fair value of the ordinary shares and the Warrants utilizing a Monte Carlo simulation model (Level 3 classification), which incorporates various assumptions including expected share price volatility, risk-free interest rate, and the expected date of a qualifying event.

The Company estimated the volatility of the ordinary shares of Ever After Foods based on data from similar companies operating in the food tech field.

Risk-free interest rate

Expected share price volatility

The consideration allocated to the shares issued was divided between the non-controlling interests, or NCI, and the Company’s shareholders as this transaction is a transaction with the NCI.

The consideration allocated to the Warrants was recognized against the NCI.

On August 23, 2022, or the Amendment Date, Ever After Foods and Tnuva executed an amendment to the warrant agreement, or the Amendment, extending the exercise period of the First Warrant from six months to nine months from the Closing Date.

All other terms remained unchanged.

According to management estimates, the Company does not have sufficient resources to meet its operating obligations for at least twelve months from the issuance date of these consolidated financial statements.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The audited consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or liabilities that might be necessary should the Company be unable to continue as a going concern.

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

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

The Company is engaged 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 linked principal and interest accrued balance was $ 27,289 and is presented among short-term liabilities (see note 9).

Kokomodo Transaction

On January 23, 2025, the Company entered into a binding term sheet, or the Term Sheet for the purchase of certain shares representing approximately 79 % of the equity of Kokomodo, an Israeli company, for an aggregate purchase price of $ 4,500 (on Term Sheet date), payable in common shares of the Company set in an amount equal to 976,139 common shares, or the Consideration Shares.

Following the execution of the Term Sheet, on March 13, 2025, Pluri Inc.

and the Subsidiary, or collectively, the Purchaser, entered into a Share Purchase Agreement, or the Share Purchase Agreement, effective as of March 12, 2025, with Chutzpah Holdings Limited, or Chutzpah, a company wholly owned by Mr.

Alejandro Weinstein and Plantae Bioscience Ltd., or Plantae, a corporation controlled by Mr.

Weinstein, or collectively, the Seller.

The Share Purchase Agreement was entered into in accordance with the terms and conditions set forth in the Term Sheet for the consummation of the Kokomodo Transaction (as defined below), pursuant to which the Seller agreed to (i) sell to the Purchaser 400,000 ordinary shares and 175,000 preferred seed-1 shares, representing approximately 79 % of the equity of Kokomodo, or the Purchased Shares, and (ii) transfer, assign and convey in favor of the Purchaser a convertible loan, pursuant to an assignment and assumption agreement, reflecting a principal aggregate amount of $ 500 which together with the Purchased Shares, the Purchased Interests and such transactions are herein referred to as the “Kokomodo Transaction”.

As of January 23, 2025, the Consideration Shares represented 12.14 % of the Company’s issued and outstanding share capital on a fully diluted basis after the deemed issuance of the Consideration Shares (but excluding any securities issuable in connection with a Securities Purchase Agreement (defined below) entered into on January 23, 2025, between the Company and a company wholly owned beneficially by Mr.

On April 28, 2025, the Company announced the completion of the Kokomodo Transaction, acquiring approximately 79 % of the equity in Kokomodo, for an aggregate purchase price of $ 4,639 , net of issuance costs of $ 47 , payable in 976,139 common shares of the Company.

As a result, the Company’s capital consideration is $ 5,803 , of which $ 1,164 is attributed to non-controlling interests.

The Company accounted for the transaction in accordance with Accounting Standard Codification, or ASC, 805, “Business Combinations”.

AND ITS SUBSIDIARIES

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- GENERAL (CONT.)

Following the Amendment, the Company recalculated the fair value of the warrants utilizing the same Monte Carlo simulation model (Level 3 classification) before and after the Amendment Date, which incorporates various assumptions including expected share price volatility, risk-free interest rate, and the expected date of a qualifying event.

The main assumptions used in the Monte Carlo simulation model are as follows:

Risk-free interest rate

Expected share price volatility

The Company estimated the volatility

of the ordinary shares of Ever After Foods based on data from similar companies operating in the food tech field.

The additional fair

value determined was $ 385 .

On November 22, 2022, the warrants in Ever After Foods expired unexercised and $ 1,014 were classified from NCI to additional paid-in capital.

On June 12, 2024, Ever After Foods entered into a share purchase agreement with the Subsidiary, Tnuva and other investors.

Ever After Foods agreed to issue and sell, ordinary shares in a private placement offering, for aggregate gross proceeds of $ 10,000 .

As part of the offering, the Subsidiary invested $ 1,250 .

As a result, the Company’s capital consideration is $ 8,750 , of which $ 3,185 is attributed to non-controlling interests .

Following the closing of the offering, the Company continued to own approximately 69 % of Ever After Foods’ shares .

The financial results of Kokomodo Transaction are included in the Company’s consolidated financial statements from the relevant acquisition date.

The results from the acquisition individually and in the aggregate were not material to the Company’s consolidated financial statements.

Pro forma financial information has not been presented because the acquisition had an immaterial impact on the Company’s consolidated statement of operations.

The Company preliminarily recorded $ 2,823 of identifiable intangible assets based on their estimated fair values, and $ 3,136 of residual goodwill, from the acquisition.

The intangible assets acquired are divided into two identified assets:

(1) cocoa cell growth and application platform, and (2) the ability to develop additional applications.

The estimated useful life of the cocoa cell growth and application platform and the ability to develop additional applications is fifteen years and six years , respectively (see note 5).

The following table summarizes the purchase price allocation to the fair value of the assets acquired and liabilities assumed as of April 28,2025:

Cash and Cash equivalents

Other current assets

Property and equipment, net

Intangible assets

Total assets acquired

Trade payables

Other accounts payable

Deferred tax liabilities

Total liabilities assumed

Total assets acquired and liabilities assumed, net

Non-controlling interest

Total purchase price (*)

(*) Issuance costs related to Kokomodo Transaction amounted to $ 47 .

Following are details of the purchase consideration allocated to acquired intangible assets:

Fair value Amortization

Cocoa cell growth and application platform $ 2,685 15

Ability to develop additional applications (*) 138 6

Total intangible assets $ 2,823

(*) Not yet amortized.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

- SIGNIFICANT ACCOUNTING POLICIES

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reasonable based upon information available at the time they are made.

Estimates are primarily used for, but not limited to, valuation

of share-based compensation, valuation of warrants and determining the valuation and terms of leases.

These estimates, judgments and assumptions

can affect the amounts reported in the financial statements and accompanying notes, and actual results could differ from those estimates.

Estimates are primarily used for, but not limited to, percentage

of completion in revenue recognition, allocation of the purchase consideration in the connection with Kokomodo Transaction, impairment

of goodwill and intangible assets, valuation of share-based compensation and forfeiture rate, valuation of warrants and determining the

valuation and terms of leases.

These estimates, judgments and assumptions can affect the amounts reported in the financial statements

and accompanying notes, and actual results could differ from those estimates.

Functional currency

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Accordingly, non-dollar denominated transactions and balances have been re-measured into the functional currency

in accordance with Accounting Standards Codification, or ASC, 830, “Foreign Currency Matters”.

All transaction gains and losses

from the re-measured monetary balance sheet items are reflected in the consolidated statements of operations as financial income or expenses,

as appropriate.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

in accordance with ASC 830, “Foreign Currency Matters”.

All transaction gains and losses from the re-measured monetary balance

sheet items are reflected in the consolidated statements of operations as financial income or expenses, as appropriate.

Principles of consolidation

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include the accounts of the Company and its Subsidiaries.

Non-controlling interests in subsidiaries represent the equity in Ever After

Foods not attributable, directly or indirectly, to the Company.

Non-controlling interests are presented in equity separately from the

equity attributable to the shareholders of the Company.

Profit or loss and components of other comprehensive income or loss are attributed

to the Company and to non-controlling interests.

Losses are attributed to non-controlling interests even if they result in a negative

balance of non-controlling interests in the consolidated statements of operations.

NCIs in subsidiaries represent the equity in Ever After Foods and Kokomodo

not attributable, directly or indirectly, to the Company.

NCIs are presented in equity separately from the equity attributable to the

shareholders of the Company.

Profit or loss are attributed to the Company and to NCIs.

Losses are attributed to non-controlling interests

even if they result in a negative balance of non-controlling interests in the consolidated statements of operations.

The Company treats transactions with

non-controlling interests as transactions with its equity owners.

Accordingly, for sales or purchases of shares to or from non-controlling

interests, the difference between any consideration received or paid and the portion sold or acquired of the carrying value of the net

assets of the subsidiary is recorded in equity.

transactions and balances have been eliminated upon consolidation.

NCIs as transactions with its equity owners.

Accordingly, for sales or purchases of shares to or from non-controlling interests, the

difference between any consideration received or paid and the portion sold or acquired of the carrying value of the net assets of the

subsidiary is recorded in equity.

Intercompany transactions and balances

have been eliminated upon consolidation.

Cash and cash equivalents

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Bank deposits with original maturities

of more than three months but less than one year are presented as part of short-term investments.

of more than three months but less than one year are presented as part of short-term bank deposit.

Deposits are presented at their cost

1 unchanged sentence

Interest on deposits is recorded as financial income.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Restricted cash

Restricted cash is cash used to secure

the Company’s credit line, derivative and hedging transactions and lease agreement.

The restricted cash is presented at cost which

approximates market values including accrued interest.

the Company’s credit line and derivative and hedging transactions.

The restricted cash is presented at cost which approximates

market values including accrued interest.

Long-term restricted bank deposits

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including accrued interest.

Revenue Recognition

The Company recognizes revenue in

accordance with ASC 606, “Revenue from Contracts with Customers”, and all the related amendments, when a performance obligation

is a promise to provide a distinct service or a series of distinct services.

Services that are not distinct are bundled with other services

in the contract until a bundle of services that are distinct are created.

A service promised to a customer is distinct if the customer

can benefit from the service either on its own or together with other resources that are readily available to the customer and the entity’s

promise to transfer the service to the customer is separately identifiable from other promises in the contract.

Revenues are recognized when the control

of the performance of the obligations are transferred to the customer, in an amount that reflects the consideration to which the Company

expects to be entitled, excluding sales taxes.

The Company determines revenue recognition

through the following five steps:

identification of the contract with a customer;

identification of the performance obligations in the contract;

determination of the transaction price;

allocation of the transaction price to the performance obligations

in the contract;

recognition of revenue when, or as, the Company satisfies a performance

The Company derives its revenues mainly

from services provided to CDMO clients and revenues related to a POC, collaboration with a leading international agriculture corporation

in the AgTech field.

As such, the Company contracts with its customers, may contain the following main performance obligations:

cell manufacturing staff for GMP, and of non-GMP;

(ii) quality assurance and quality control tests;

(iii) performing engineering runs

and clinical batches;

(iv) protocol development;

and (v) evaluation and analysis of results.

The Company evaluates each performance obligation

to determine if it is satisfied at a point in time or over time.

For contracts that contain multiple

performance obligations, the Company allocates the transaction price to each performance obligation based on the relative standalone

selling price, or SSP, for each performance obligation.

The Company uses judgment in determining the SSP for its performance obligations.

To determine SSP, the Company maximizes the use of observable standalone sales and observable data, where available.

Revenue from services provided is

recognized over time when the control of the services promised to a customer is transferred to the customer.

The Company recognizes revenue

from such contracts over time, using the percentage of completion accounting method.

The Company recognizes revenue as the work is performed,

based on a ratio between labor effort incurred to date compared to the total estimated labor effort for the contract.

Incurred labor

effort represents work performed that corresponds with, and thereby best depicts, the transfer of control of the services to the customer.

Determining the projected labor costs requires understanding the project-specific circumstances, including the specific terms and conditions

of each contract, changes to the project schedule, and complexity of the project.

Revenue is recognized net of any taxes

collected from customers which are subsequently remitted to governmental entities (e.g., sales tax and other indirect taxes).

Amounts are billed as work progresses

in accordance with agreed-upon contractual terms, or upon achievement of contractual milestones.

The Company applies the practical

expedient and does not assess whether a contract has a significant financing component if the expectation at contract inception is such

that the period between payment by the customer and the transfer of the promised services to the customer will be one year or less.

AND ITS SUBSIDIARIES

2 unchanged sentences

- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Revenue Recognition

A contract with a customer exists only

(i) the parties to the contract have approved it and are committed to perform their respective obligations, (ii) the Company can

identify each party’s rights regarding the distinct goods or services to be transferred, or the Performance Obligations, (iii) the

Company can determine the transaction price for the goods or services to be transferred, (iv) the contract has commercial substance and

(v) it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services

that will be transferred to the customer.

Revenues are recognized when the control

of the promised goods or the performance of the obligations are transferred to the customer, in an amount that reflects the consideration

to which the Company expects to be entitled, excluding sales taxes.

The Company determines revenue recognition

through the following steps:

● identification

of the contract with a customer;

● identification

of the Performance Obligations in the contract;

● determination

of the transaction price;

of the transaction price to the Performance Obligations in the contract;

● recognition

of revenue when, or as, the Company satisfies a Performance Obligation.

For each contract which includes prepayment

terms, the Company evaluates whether the contract includes a significant financing component.

The Company’s contracts with customer

prepayment terms do not include a significant financing component because the primary purpose of such contracts is not to receive financing

from the customers.

Advances from customers

The Company records advances from

customers when cash payments from customers are received in advance of the Company’s performance obligations to provide services.

of June 30, 2025 and 2024, the Company received upfront payments of a total of $ 148 and $ 43 , respectively, from customers which

are expected to be recognized as revenue once the service has been performed.

The Company expects to satisfy the majority of its performance

obligations associated with advances from customers within one year or less.

The Company elected the short-term contract practical expedient

for the remaining performance obligations, as the Company’s contracts have an original expected duration of less than one year.

During the year ended June 30,

2025 and 2024, the Company recognized $ 43 and $ 7 that were included in the advances from customers balance on June 30, 2024

and 2023, respectively.

Cost of revenues

Cost of revenues is comprised of manufacturing

costs related to the Company’s CDMO and AgTech businesses, which primarily consist of materials, personnel-related and overhead

Property and equipment

Property and equipment are stated at

cost, net of accumulated depreciation and impairments.

Property and equipment are stated

at cost, net of accumulated depreciation and impairments.

Depreciation is calculated by the straight-line method over the estimated useful

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Office furniture and equipment 15

Leasehold improvements

The shorter of the expected useful life or the term of the lease.

Repairs and maintenance expenditures, which are not considered improvements

and do not extend the useful life of property and equipment, are expensed as incurred.

Leasehold improvements The shorter of the expected useful life or the term of the lease.

Repairs and maintenance expenditures, which are not considered

improvements and do not extend the useful life of property and equipment, are expensed as incurred.

Impairment of long-lived assets

1 unchanged sentence

are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment”, whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable.

The recoverability of assets to be held and used is measured by

a comparison of the carrying amount of the assets to the future undiscounted cash flows expected to be generated by the assets.

assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets

exceeds the fair value of the assets.

indicate that the carrying amount of an asset (asset group) may not be recoverable.

The recoverability of assets to be held and used

is measured by a comparison of the carrying amount of the assets (asset group) to the future undiscounted cash flows expected to be generated

by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying

amount of the assets exceeds the fair value of the assets.

During fiscal years 2025 and 2024, no impairment losses were recorded.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Goodwill and intangible assets

Goodwill represents the excess of

the purchase price over the fair value of net identifiable assets acquired.

Under ASC 350, “Intangible - Goodwill and Other”,

or ASC 350, goodwill is not amortized but rather is subject to an annual impairment test.

ASC 350 allows an entity to first assess qualitative

factors to determine whether it is necessary to perform the quantitative goodwill impairment test.

If the qualitative assessment does

not result in a more likely than not indication of impairment, no further impairment testing is required.

If the Company elects not to

use this option, or if the Company determines that it is more likely than not that the fair value of a reporting unit is less than its

carrying value, then the Company prepares a quantitative analysis to determine whether the carrying value of a reporting unit exceeds

its estimated fair value.

If the carrying value of a reporting unit would exceed its estimated fair value, the Company would have recognized

an impairment of goodwill for the amount of this excess (see notes 5 and 6).

Share-based compensation

The Company accounts for share-based

compensation in accordance with ASC 718, “Compensation-Share Compensation”, or ASC 718.

ASC 718 requires companies to estimate

the fair value of equity-based payment awards on the date of grant using an option-pricing model.

The Company estimates the fair value

of share options granted using the Black-Scholes option-pricing model.

The Company accounts for employees’ share-based payment awards

classified as equity awards, such as restricted share units, or RSUs, using the grant-date fair value method.

The fair value of share-based

payment transactions is recognized as an expense over the requisite service period, net of estimated forfeitures.

The Company estimates

forfeitures based on historical experience and anticipated future conditions.

The Company accounts for

share-based compensation in accordance with ASC 718, “Compensation-Share Compensation”, or ASC 718, which requires

companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model.

estimates the fair value of share options granted using the Black-Scholes option-pricing model.

The Company accounts for

employees’, officers’ and consultants share-based payment awards classified as equity awards, such as restricted share

units, or RSUs, and restricted shares, or RS, using the grant-date fair value.

The fair value of share-based payment transactions is

recognized as an expense over the requisite service period, net of estimated forfeitures.

The Company estimates forfeitures based on

historical experience and anticipated future conditions.

The Company recognized compensation

1 unchanged sentence

award approach.

The Company measures the cost of employee

services received in exchange for an award of equity instruments based on the grant-date fair value of the award.

The fair value of service-based share

option grants is estimated on the grant date using a Black-Scholes option-pricing model and compensation expense related to share option

and RSUs grants are recognized on a graded vesting schedule over the vesting period.

All RSUs to employees and directors

granted during fiscal 2024 and 2023 were granted for no consideration.

Therefore, their fair value was equal to the share price at the

date of grant.

The fair value of all RSUs was determined

based on the closing trading price of the Company’s shares known at the grant date.

The weighted average grant date fair value of

RSU granted during fiscal years 2024 and 2023 was $ 4.32 and $ 7.92 per share, respectively.

The fair value of the service-based

share option grants was estimated on the grant date using a Black-Scholes option-pricing model.

The weighted average grant date fair value

of option granted during fiscal years 2024 and 2023 was $ 3.85 and $ 3.65 per option, respectively.

The fair value of each option was estimated

as of the date of grant using the Black-Scholes option-pricing model using the following assumptions:

Underlying value of common shares ($)

Exercise price ($)

Expected volatility (%)

86.40 - 86.48

Expected terms of the option (years)

Risk-free interest rate (%)

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Dollars in thousands (except share and per share amounts)

- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

option grants is estimated on the grant date using a Black-Scholes option-pricing model and compensation expenses related to share options,

RS and RSUs grants are recognized on a graded vesting schedule over the vesting period.

The expected term represents the period that

service-based share option grants are expected to be outstanding.

When establishing the expected term assumption, the Company utilizes

the simplified method.

Research and development expenses, royalty bearing grants and non-royalty bearing grants

Research and development expenses include

costs directly attributable to the conduct of research and development programs, including the cost of salaries, share-based compensation

expenses, payroll taxes and other employee benefits, subcontractors and materials used for research and development activities, including

Research and development expenses

include costs directly attributable to the conduct of research and development programs, including the cost of salaries, taxes and other

employee benefits, share-based compensation expenses, subcontractors and materials used for research and development activities, including

clinical trials, manufacturing costs and professional services.

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National Institute of Allergy and Infectious Diseases, or the NIAID, and from the IIA, under the CRISPR-IL

consortium, in the aggregate amount of approximately $ 1,113 and $ 2,426 , for the years ended June 30, 2024 and 2023, respectively.

non-royalty bearing grants for funding the projects are recognized at the time the Company is entitled to each such grant based on the

related costs incurred and recorded as a deduction from research and development expenses.

consortium and Placental Mucosal Associated Invariant T, or MAIT, in the aggregate amount of approximately $ 1,613 and $ 1,113 , for the

years ended June 30, 2025 and 2024, respectively.

The non-royalty bearing grants for funding the projects are recognized at the time

the Company is entitled to each such grant based on the related costs incurred and recorded as a deduction from research and development

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Dollars in thousands (except share and per share amounts)

- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Research and development expenses,

3 unchanged sentences

Basic and diluted loss per share is

computed by dividing losses by the weighted average number of common shares outstanding during the year, including unexercised vested

options with no par value exercise price.

All outstanding share options, unvested RSUs and warrants have been excluded from the calculation

of the diluted loss per common share because all such securities are anti-dilutive for each of the periods presented.

The total number

of shares related to the outstanding options, warrants and RSUs excluded from the calculations of diluted net loss per share due to their

anti-dilutive effect was 1,635,190 and 1,768,948 for the years ended June 30, 2024 and 2023, respectively.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Dollars in thousands (except share and per share amounts)

- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

computed by dividing net loss by the weighted average number of common shares outstanding during the year, including equity classified

pre-funded warrants and unexercised vested options with no par value exercise price.

All outstanding share options, unvested RSUs, RS,

pre-funded warrants and warrants have been excluded from the calculation of the diluted loss per common share because all such securities

are anti-dilutive for each of the periods presented.

Deferred taxes

1 unchanged sentence

asset and liability method.

Under the asset and liability method, deferred income tax assets and liabilities are determined based on the

differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates

A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized

in the foreseeable future.

Under ASC 740, “Income Taxes”, or ASC 740, the asset and liability method, deferred income tax

assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities

and are measured using the currently enacted tax rates and laws.

A valuation allowance is recognized to the extent that it is more likely

than not that the deferred taxes will not be realized in the foreseeable future.

Uncertainty in income taxes

The Company accounts for uncertain

tax positions in accordance with the provisions of ASC 740, “Income Taxes”, or ASC 740.

Accounting guidance addresses the

determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial

statements, under which a Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that

the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

tax positions in accordance with the provisions of ASC 740.

Accounting guidance addresses the determination of whether tax benefits claimed

or expected to be claimed on a tax return should be recorded in the consolidated financial statements, under which a Company may recognize

the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination

by the taxing authorities, based on the technical merits of the position.

Concentration of credit risk

1 unchanged sentence

subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, short-term bank

deposits, long-term restricted bank deposits.

deposits, long-term restricted bank deposits and customers receivables.

The majority of the Company’s

cash and cash equivalents, restricted cash, short-term bank deposits and long-term restricted deposits are mainly invested in the New

Israeli Shekel, or NIS, and U.S.

dollar deposits of major banks in Israel and in the United States.

Deposits in the United States may

be in excess of insured limits and are not insured in other jurisdictions.

Generally, these deposits may be redeemed upon demand and therefore

bear minimal risk.

The Company invests its surplus cash in cash deposits in financial institutions and has established guidelines, approved

by the Company’s Investment Committee, relating to diversification and maturities to maintain safety and liquidity of the investments.

financial instruments listed above are mainly invested in the New Israeli Shekel, or NIS, and U.S.

dollar deposits of major banks in

Israel and in the United States.

Deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions.

Generally, these deposits may be redeemed upon demand and therefore bear minimal risk.

The Company invests its surplus cash in cash deposits

in financial institutions and has established guidelines, approved by the Company’s Investment Committee, relating to diversification

and maturities to maintain safety and liquidity of the investments.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Dollars in thousands (except share and per share amounts)

- SIGNIFICANT ACCOUNTING POLICIES

Severance pay

3 unchanged sentences

contributions for severance pay have replaced its severance obligation.

Upon contribution of the full amount of the employee’s monthly

salary for each year of employment, no additional obligation exists regarding the matter of severance pay and no additional payments are

made by the Company to the employee.

Upon contribution of the full amount of the employee’s

monthly salary for each year of employment, no additional obligation exists regarding the matter of severance pay and no additional payments

are made by the Company to the employee.

Further, the related obligation and amounts deposited on behalf of the employee for such obligation

are not stated on the balance sheet, as the Company is legally released from the obligation to employees once the deposit amounts have

For Yaky Yanay, the Company’s

Chief Executive Officer, or the CEO, whose agreement is not subject to Section 14 of the Severance Pay Law, the Subsidiary’s liability

for severance pay is calculated pursuant to Severance Pay Law, based on the most recent salary of the employee multiplied by the number

of years of employment, as of the balance sheet date.

The CEO is entitled to one month’s salary for each year of employment or a

portion thereof.

The Company’s liability to the CEO is fully provided by monthly deposits with insurance policies and by an accrual.

The value of these policies is recorded as an asset in the Company’s balance sheet.

For the Company’s Chief Executive

Officer , or the CEO, whose agreement is not subject to Section 14 of the Severance Pay Law, the liability for severance pay is calculated

pursuant to Severance Pay Law, based on the most recent salary of the employee multiplied by the number of years of employment, as of

the balance sheet date.

The CEO is entitled to one month’s salary for each year of employment or a portion thereof.

The Company’s

liability to the CEO is fully provided by monthly deposits with insurance policies and by an accrual.

The value of these policies is

recorded as an asset in the Company’s balance sheet.

The deposited funds may be withdrawn

only upon the fulfillment of the obligation pursuant to the Severance Pay Law or labor agreements.

The value of the deposited funds is

based on the cash surrendered value of these policies, and includes immaterial profits or losses accumulated up to the balance sheet

Severance expenses for the years ended

June 30, 2025 and 2024 were $ 663 and $ 632 , respectively.

Derivative financial instruments

The Company accounts for derivatives

and hedging based on ASC 815, “Derivatives and hedging”, as amended and related interpretations, or ASC 815, which requires

the Company to recognize all derivatives on the balance sheet at fair value.

If a derivative does not meet the

definition of a hedging instrument, the changes in fair value are included in earnings.

Cash flows related to Company’s current

hedging are classified as operating activities.

The Company enters into option and forward contracts in order to limit the exposure to

exchange rate fluctuation associated with expenses mainly incurred in NIS and its loan from the EIB that is linked to the Euro.

the derivative instruments that the Company holds do not meet the definition of hedging instruments under ASC 815, any gain or loss derived

from such instruments is recognized immediately as “financial income (expenses), net”.

The Company measured the fair value

of the contracts in accordance with ASC 820, “Fair Value Measurement”, or ASC 820.

Foreign currency derivative contracts

are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments.

net income (losses) from derivatives instruments recognized in “Financial income (expenses), net” during the years ended

June 30, 2025 and 2024 were $ 251 and $ 148 , respectively (see note 12).

AND ITS SUBSIDIARIES

3 unchanged sentences

ACCOUNTING POLICIES (CONT.)

The deposited funds may be withdrawn

only upon the fulfillment of the obligation pursuant to the Severance Pay Law or labor agreements.

The value of the deposited funds is

based on the cash surrendered value of these policies, and includes immaterial profits or losses accumulated up to the balance sheet date.

Severance expenses for all employees

including the CEO, for the years ended June 30, 2024 and 2023 were $ 632 and $ 732 , respectively.

value of financial instruments

Operating leases are included in operating

lease right-of-use, or ROU, asset, and operating lease liability.

ROU assets represent the Company’s right to use an underlying

asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease.

Operating lease

ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease

In determining the present value of lease payments, the Company uses the incremental borrowing rate based on the information available

at the lease commencement date as the rate implicit in the lease is not readily determinable.

The determination of the incremental borrowing

rate requires management judgment based on information available at lease commencement.

The operating lease ROU assets also include adjustments

for prepayments and accrued lease payments.

Operating lease cost is recognized on a straight-line basis over the expected lease term.

Lease agreements with a non-cancelable term of less than twelve months are not recorded on the balance sheets.

Lease terms will include options to

extend or terminate the lease when it is reasonably certain that the Company will either exercise or not exercise the option to renew

or terminate the lease.

Fair value of financial instruments

The carrying amounts of the Company’s

3 unchanged sentences

The Company measures its derivative

instruments at fair value under ASC 820, “Fair Value Measurement”, or ASC 820.

Fair value is an exit price, representing the

amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

instruments at fair value under ASC 820.

Fair value is an exit price, representing the amount that would be received to sell an asset

or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based

measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation

methodologies in measuring fair value:

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

Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly;

a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the

valuation methodologies in measuring fair value:

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

Inputs other than Level 1 that are observable for the asset or liability,

either directly or indirectly;

Unobservable inputs for the asset or liability.

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categorized each of its fair value measurements in one of these three levels of hierarchy.

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

and accrued interest thereunder.

The Company does not reflect its liability for future royalty payments pursuant to the Finance Contract

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

to the amount disbursed, beginning in the fiscal year 2024 and continuing up to and including its fiscal year 2030.

The Company accrued

royalties for fiscal year 2024 in the amount of $ 3 (see note 7).

financial instruments

The Company accounts for derivatives

and hedging based on ASC 815, “Derivatives and hedging”, as amended and related interpretations, or ASC 815.

ASC 815 requires

the Company to recognize all derivatives on the balance sheet at fair value.

If a derivative does not meet the

definition of a hedging instrument, the changes in the fair value are included in earnings.

Cash flows related to Company’s

current hedging are classified as operating activities.

The Company enters into option and forward contracts in order to limit the

exposure to exchange rate fluctuation associated with expenses mainly incurred in NIS and its loan from the EIB that is linked to

Since the derivative instruments that the Company holds do not meet the definition of hedging instruments under ASC 815,

any gain or loss derived from such instruments is recognized immediately as “financial income (expenses), net”.

The Company measures its liability

pursuant to the Finance Contract based on the aggregate outstanding amount of the combined principal and accrued interest thereunder

(see note 9).

The Company measures its liability

for Pre-Funded Warrants and Common Warrants (defined below) at fair value using Level 3 unobservable inputs, in accordance with the fair

value hierarchy defined in ASC 820 (see note 2v and 11).

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL

Dollars in thousands (except share and per share amounts)

1 unchanged sentence

ACCOUNTING POLICIES (CONT.)

The Company measured the fair value

of the contracts in accordance with ASC 820.

Foreign currency derivative contracts are classified within Level 2 as the valuation inputs

are based on quoted prices and market observable data of similar instruments.

As of June 30, 2024, the fair value of the derivatives instruments

is presented in “Prepaid expenses and other current assets” (see note 3) and as of June 30, 2023, there were no derivatives

The net income (losses) from derivatives instruments recognized in “Financial income (expenses), net” during

the years ended June 30, 2024 and 2023 were $ 148 and $( 157 ), respectively (see note 10).

Operating leases are included in operating

lease right-of-use, or ROU asset, and operating lease liability.

ROU assets represent the Company’s right to use an underlying asset

for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease.

Operating lease ROU assets

and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

In determining

the present value of lease payments, the Company uses the incremental borrowing rate based on the information available at the lease commencement

date as the rate implicit in the lease is not readily determinable.

The determination of the incremental borrowing rate requires management

judgment based on information available at lease commencement.

The operating lease ROU assets also include adjustments for prepayments

and accrued lease payments.

Operating lease cost is recognized on a straight-line basis over the expected lease term.

Lease agreements

with a non-cancelable term of less than 12 months are not recorded on the balance sheets.

The Company accounts for an extension

of a lease term that was not part of the original lease as a modification.

As a result, the Company reallocates contract consideration

between the lease and non-lease components, reassesses lease classification, and remeasures the lease liability and right-of-use asset

prospectively.

Assumptions such as the discount rate, fair value of the underlying asset, and variable rents based on a rate or index

will be updated as of the modification date.

Lease terms will include options to

extend or terminate the lease when it is reasonably certain that the Company will either exercise or not exercise the option to renew

or terminate the lease.

Accounting Pronouncements

adopted accounting pronouncements

2016-13-“Financial

Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments”, or ASU 2016-13:

In June 2016, the Financial Accounting

Standards Board, or the FASB, issued Accounting Standards Update, or ASU, 2016-13, which changes the impairment model for most financial

assets and certain other instruments.

For trade and other receivables, held-to-maturity debt securities, loans, and other instruments,

entities are required to use a new forward-looking “expected loss” model that generally results in the earlier recognition

of allowances for losses.

The guidance also requires increased disclosures.

The amendments contained in ASU 2016-13 were originally effective

for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years for the Company.

In November 2019,

the FASB issued ASU No.

2019-10, which delayed the effective date of ASU 2016-13 for smaller reporting companies (as defined by the

Securities and Exchange Commission, or SEC, rules) to fiscal years beginning after December 15, 2022, including interim periods.

Common Warrants and Pre-funded Warrants

The Company accounts for warrants

and pre-funded warrants based on ASC 480, “Distinguishing Liabilities from Equity”, or ASC 480, as either equity-classified

or liability-classified instruments based on an assessment of the warrants and pre-funded warrant’s specific terms and applicable

authoritative guidance.

The assessment considers whether the warrants and pre-funded warrants are freestanding financial instruments,

meet the definition of a liability under ASC 480, and meet all of the requirements for equity classification, including whether the warrants

and pre-funded warrants are indexed to the Company’s own common stock and whether the warrants and pre-funded warrants holders

could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among all other

classification conditions pursuant to ASC 815-40.

This assessment is conducted at the time of the warrants and pre-funded warrants issuance

and in any change in circumstances that could affect the classification.

Warrants and pre-funded warrants that meet all the criteria

for equity classification, are required to be recorded as a component of additional paid-in capital.

Warrants that do not meet all the

criteria for equity classification, are required to be recorded as liabilities at their initial fair value on the date of issuance and

remeasured to fair value at each balance sheet date thereafter.

During year ended June 30, 2025, the liability-classified Common Warrants

and Pre-Funded Warrants (defined below) were recorded under liabilities.

As of June 30, 2025, these instruments were reclassified to

equity, following the removal of the 19.99 % beneficial ownership limitation upon obtaining the Shareholder Approval (defined below).

The Shareholder Approval was obtained at the Company’s annual meeting of shareholders held on June 30, 2025.

Changes in the estimated

fair value of the Common Warrants and Pre-Funded Warrants are recognized in “Financial expenses, net” in the consolidated

statements of operations (see also note 11).

New Accounting Pronouncements

Recently adopted accounting pronouncements

2023-07 - “Segment Reporting–Improvements

to Reportable Segments Disclosures (Topic 280)”, or ASU 2023-07:

In November 2023, the Financial Accounting

Standards Board, or FASB issued ASU 2023-07, which improves reportable segment disclosure requirements, primarily through enhanced disclosures

about significant segment expenses.

The amendments in this ASU (1) require that a public entity disclose, on an annual and interim basis,

significant segment expenses that are regularly provided to the chief operating decision maker, or the CODM, and included within each

reported measure of segment profit or loss;

(2) require that a public entity disclose, on an annual and interim basis, an amount for

other segment items by reportable segment and a description of its composition;

(3) require that a public entity provide all annual disclosures

about a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods;

(4) clarify that if

the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate

resources, a public entity may report one or more of those additional measures;

and (5) require that a public entity disclose the title

and position of the CODM and an explanation of how the CODM uses the reported measure or measures of segment profit or loss in assessing

segment performance and deciding how to allocate resources.

The amendments in this ASU are effective for fiscal years beginning after

December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to

all periods presented.

The Company’s CODM, the CEO, reviews the Company’s operating results on an aggregate basis and manages

the Company’s operations as a single operating segment.

The CODM uses consolidated net loss to assets performance and utilizes

this information in allocating resources and in assessing performance by monitoring budget versus actual results (see also note 13).

AND ITS SUBSIDIARIES

3 unchanged sentences

ACCOUNTING POLICIES (CONT.)

The guidance requires a modified retrospective

transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption.

meets the SEC definition of a smaller reporting company and adopted the new accounting standard effective July 1, 2023.

The adoption of

this standard did not have a material impact on the Company’s consolidated financial statements.

Recently issued accounting pronouncements, not yet adopted

2023-07 - “Segment

Reporting (Topic 280):

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

In November 2023, the FASB issued ASU

2023-07, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning

after December 15, 2024.

Early adoption is permitted.

The amendments should be applied retrospectively to all prior periods presented

in the financial statements.

The Company is currently evaluating the effect that ASU 2023-07 will have on its consolidated financial statements

and related disclosures.

2023-09 - “Income

Taxes (Topic 740):

2023-09 - “Income Taxes

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

In December 2023, the FASB issued ASU

2023-09, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective

In December 2023, the FASB issued

ASU 2023-09, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective

tax rate reconciliation, and modifies other income tax-related disclosures.

ASU 2023-09 will be effective for fiscal years beginning after

ASU 2023-09 is effective for fiscal years beginning after

December 15, 2024, and allows adoption on a prospective basis, with a retrospective option.

3 unchanged sentences

financial statements and related disclosures.

2024-03 - “Income Statement:

Reporting Comprehensive Income - Expense Disaggregation Disclosures”, or ASU 2024-03:

In November 2024, the FASB issued

ASU 2024-03, which requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation,

depreciation, amortization, and depletion), which are included in certain expense captions presented on the face of the income statement,

as well as disclosures about selling expenses.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim

periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The amendments may be applied either (1)

prospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03, or (2) retrospectively to

all prior periods presented in the financial statements.

The Company is currently evaluating this guidance to determine the impact it

may have on its consolidated financial statements disclosures.

2025-05- “Financial

Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets”, or ASU

In July 2025, the FASB issued ASU

This amendment introduces a practical expedient for the application of the current expected credit loss model to current accounts

receivable and contract assets.

ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting

periods within those annual reporting periods.

Early adoption is permitted.

The Company is currently evaluating this guidance to determine

the impact it may have on its consolidated financial statements disclosures.

Comprehensive loss

1 unchanged sentence

is the same as comprehensive loss as there are no comprehensive income items.

contingencies

Loss contingencies

The Company records accruals for loss

1 unchanged sentence

30, 2025 and 2024, the Company has not recorded any accruals in this regard.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

- PREPAID EXPENSES AND OTHER CURRENT ASSETS

Accounts receivable from NIAID

Prepaid expenses

Value Added Tax receivable

Value Added Tax, or VAT, receivable

Accounts receivable from NIAID

Accounts receivable from the IIA

Customer receivable

Derivative financial instruments

Other receivables

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

- PROPERTY AND EQUIPMENT, NET

12 unchanged sentences

$ 286 and $ 253 for the years ended June 30, 2025 and 2024, respectively.

During the year ended June 30, 2025,

the Company made an advance payment in the amount of $ 420 related to property, plant and equipment, which was classified as other long-term

assets as of the balance sheet date.

All of the Company’s property

and equipment is located in Israel.

- INTANGIBLE ASSETS, NET

Cocoa cell growth and application platform

Ability to develop additional applications

Accumulated amortization:

Cocoa cell growth and application platform

Ability to develop additional applications

Total accumulated amortization

Intangible assets, net

Amortization expenses amounted to

$ 30 for the year ended June 30, 2025 (see also note 1d).

During fiscal year 2025, no impairment

losses were recorded.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

The Company preliminarily recorded

goodwill in the amount of $ 3,136 , from Kokomodo Transaction.

The Company conducts its annual impairment test of goodwill once a year.

The Company determined that no adjustment to the carrying value of goodwill of its reporting unit was required.

As of June 30, 2025,

the Company determined that no events occurred, or circumstances changed from April 28, 2025, through June 30, 2025, that would more

likely than not reduce the fair value of the reporting unit below it carrying amount.

- OTHER ACCOUNTS PAYABLE

Grants received in advance

Accrued payroll

Advances from customers

Payroll institutions

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Dollars in thousands (except share and per share amounts)

Grants received in advance

Other accounts payable

Towards the termination of the previous

facility operating lease agreement, the Company signed, in December 2021, an addendum to its facility operating lease agreement with the

lessor, which extended the lease period to December 2026.

In addition, the Company has the option to extend the term of the lease, or

the Extension Option, for an additional period of five years until December 2031.

The Company reflected the Extension Option during the

evaluation of the lease liability and ROU asset.

The monthly lease payments are approximately NIS 292,000 ($ 78 ) which are linked to the

consumer price index and will increase by 10 % in the event the Company exercises its Extension Option.

In addition, the Company has operating

leases for vehicles that expire through fiscal year 2026.

Below is a summary of the Company’s operating ROU assets and operating

lease liabilities:

facility operating lease agreement, the Company signed, in December 2021, an addendum to its facility operating lease agreement with

the lessor, which extended the lease period to December 2026.

In addition, the Company has the option to extend the term of the lease,

or the Extension Option, for an additional period of five years until December 2031.

The Company reflected the Extension Option during

the evaluation of the lease liability and ROU asset.

The monthly lease payments are approximately NIS 292,000 (or $ 80 ), which are linked

to the consumer price index and will increase by 10 % in the event the Company exercises its Extension Option.

In addition, the Company

has operating leases for vehicles that expire through fiscal year 2028.

In October 2024, Ever After Foods

signed a facility operating lease agreement with a lessor.

The lease period began on March 1, 2025, for a term of five years until

February 28, 2030.

Ever After Foods has the option to terminate the lease after a period of 36 months or to extend the term

of the lease for an additional period of five years, or the Extension Option.

The average monthly lease payment, including

the Extension Option, is approximately NIS 55,000 (or $ 15 ), which is linked to the consumer price index.

The monthly lease

payments will increase by 5 % in the event that Ever After Foods exercises its Extension Option.

Below is a summary of the Company’s

operating ROU assets and operating lease liabilities:

Operating ROU assets

2 unchanged sentences

Total operating lease liabilities

Maturities of operating lease

liabilities as of June 30, 2024 are as follows:

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Dollars in thousands (except share and per share amounts)

- LEASES (CONT.)

Maturities of operating

lease liabilities as of June 30, 2025 are as follows:

2030 and thereafter

1 unchanged sentence

Present value of lease liabilities

All of the leased facilities

are located in Israel.

All of the leased facilities are located

The components of lease expense and

6 unchanged sentences

Cash paid for amounts included in the measurement of lease liabilities

As of June 30, 2024, the weighted average

remaining lease term is 7.4 years, and the weighted average discount rate is 9 percent.

As of June 30, 2025, the weighted

average remaining lease term is 6.4 years, and the weighted average discount rate is 9 %.

As of June 30, 2024, the weighted average remaining

lease term is 8.1 years, and the weighted average discount rate is 9 percent.

The discount rate was determined based on the estimated

collateralized borrowing rate of the Company, adjusted to the specific lease term and location of each lease.

For vehicles, the lease period is usually

lease term is 7.4 years, and the weighted average discount rate is 9 %.

The discount rate was determined based on the estimated collateralized

borrowing rate of the Company, adjusted to the specific lease term and location of each lease.

For vehicles, the lease period is

usually 3 years.

As of June 30, 2025, the remaining

lease term for Ever After Foods is 9.7 years, and the discount rate is 14 %.

The discount rate was determined based on the estimated collateralized

borrowing rate of the Company, adjusted to the specific lease term and location of each lease.

AND ITS SUBSIDIARIES

3 unchanged sentences

On April 30, 2020, the German Subsidiary

entered into the Finance Contract with the EIB, pursuant to which the German Subsidiary can obtain a loan in the amount of up to € 50

million, subject to certain milestones being reached, receivable in three tranches, with the first tranche consisting of € 20 million,

second of € 18 million and third of € 12 million for a period of 36 months from the signing of the Finance Contract.

entered the Finance Contract with the EIB, pursuant to which it may obtain a loan of up to € 50 million, subject to the achievement

of certain milestones.

Such EIB Loan is structured to be disbursed in three tranches over a 36-month period from the date of the agreement:

the first tranche of € 20 million, the second tranche of € 18 million, and the third tranche of € 12 million.

The tranches were treated independently,

each with its own interest rate and maturity period.

The annual interest rate is 4 % (consisting of a 4 % deferred interest rate payable

upon maturity);

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

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

In addition to any interest payable on the Loan, the EIB

is entitled to receive royalties from future revenues for a period of seven years starting at the beginning of fiscal year 2024 and continuing

up to and including its fiscal year 2030 in an amount equal to between 0.2 % to 2.3 % of the Company’s consolidated revenues, pro-rated

to the amount disbursed from the Loan.

As of June 30, 2024, Pluri had an accrued royalty in the amount of $ 3 .

The annual interest rate is 4 % (consisting of a 4 % deferred interest rate

payable upon maturity);

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

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

rate payable upon maturity) for the third tranche.

In addition to any interest payable

on the EIB Loan, the EIB is entitled to receive royalties from future revenues for a period of seven years, starting at the beginning

of fiscal year 2024 and continuing up to and including its fiscal year 2030.

The royalty amounts range from 0.2 % to 2.3 % of

the Company’s consolidated revenues and is pro-rated to the amount disbursed under the loan.

As of June 30, 2025 and 2024, the

Company had an accrued royalty in the amount of $ 12 and $ 3 , respectively.

During June 2021, Pluri received the

first tranche in an amount of € 20 million of the Finance Contract.

The amount received is due on June 1, 2026 and bears annual interest

of 4 % to be paid with the principal of the Loan.

As of June 30, 2024, the linked principal balance in the amount of $ 21,390 and the interest

accrued in the amount

of $ 2,637 are presented among long-term

Since the project period ended on December 31, 2022, the Company does not expect to receive additional funds pursuant to

the Finance Contract.

The amount received is due on June 1, 2026 , and bears annual

interest of 4 % to be paid with the principal of the EIB Loan.

As of June 30, 2025, the linked principal balance in the amount of $ 23,459

and the interest accrued in the amount of $ 3,830 are presented among short-term liabilities.

Since the 36-month period of the Finance

Contract has ended, the Company does not expect to receive additional funds pursuant to the Finance Contract.

The Finance Contract also contains

2 unchanged sentences

with other banks and financing entities for other loans.

The Company is engaged in advanced discussions with the EIB regarding a potential

restructuring of the terms 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.

AND ITS SUBSIDIARIES

2 unchanged sentences

- COMMITMENTS AND CONTINGENCIES

As of June 30, 2024, an amount of $ 888 of cash and deposits was pledged by the Subsidiary to secure its credit line, lease agreement and bank guarantees.

As of June 30, 2025, an amount of $ 1,301 of cash and deposits was pledged by the Subsidiary and Ever After Foods to secure its credit line, lease agreement, derivative and hedging and bank guarantees.

Under the Law for the Encouragement of Industrial Research and Development, 1984, or the Research Law, research and development programs that meet specified criteria and are approved by the IIA are eligible for grants of up to 50 % of the project’s expenditures, as determined by the research committee, in exchange for the payment of royalties from the sale of products developed under the program.

3 unchanged sentences

In the absence of such sales, no payment is required.

The outstanding balance of the grants will be subject to interest at a rate equal to the 12 month LIBOR (from January 1, 2024, to the 12-month secured overnight financing rate, or SOFR) applicable to U.S.

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

dollar deposits that is published on the first business day of each calendar year.

Following the full repayment of the grant, there is no further liability for royalties.

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

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

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

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

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

During the year ended June 30, 2023, the grant from this Smart Money program received in the amount of approximately $ 180 and the program has ended.

No royalties were paid or accrued.

In September 2017, the Company signed an agreement with the Tel-Aviv

Sourasky Medical Center, or Ichilov Hospital, to conduct a Phase I/II trial of PLX-PAD cell therapy for the treatment of Steroid-Refractory

Chronic Graft-Versus-Host-Disease, or GVHD.

As part of the agreement with Ichilov Hospital, the Company will pay royalties of 1 % from

its net sales of the PLX-PAD product relating to GVHD, with a maximum aggregate royalty amount of approximately $ 500 .

As of June 30, 2025, the Company’s contingent liability in respect to royalties to the IIA amounted to $ 28,055 , not including SOFR (before January 1, 2024, LIBOR) interest as described above.

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

Such Smart Money grant was intended to be used to advance the Company’s product candidate towards marketing in the China-Hong Kong markets.

As part of the Smart Money program, the Company also received support from Israel’s trade representatives in China and Hong Kong, as well as from experts appointed by the Smart Money program.

Under the terms of the Smart Money grant, the Company will repay royalties of 5 % of the Company’s revenues generated in the region for a five-year period, beginning the year in which the Company will not be entitled to reimbursements of expenses under such Smart Money program.

and will be spread for a period of up to 5 years or until the amount of the grant is fully paid.

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

To date, no royalties were paid or accrued.

In September 2017, the Company signed an agreement with the Tel-Aviv Sourasky Medical Center, or Ichilov Hospital, to conduct a Phase I/II trial of PLX-PAD cell therapy for the treatment of Steroid-Refractory Chronic Graft-Versus-Host-Disease, or GVHD.

As part of the agreement with Ichilov Hospital, the Company will pay royalties of 1 % from its net sales of the PLX-PAD product relating to GVHD, with a maximum aggregate royalty amount of approximately $ 500 .

As to potential royalties to the EIB, see note 9.

3 unchanged sentences

- SHAREHOLDERS’ EQUITY

(1) a) On May 1, 2023, the Company increased its authorized common shares from 7,500,000 to 37,500,000 with a par value of $ 0.00001 per share.

All shares have equal voting rights and are entitled to one vote per share in all matters to be voted upon by shareholders and may be issued only as fully paid and non-assessable shares.

Holders of the common shares are entitled to equal ratable rights to dividends and distributions, as may be declared by the Board out of funds legally available.

The Company’s authorized preferred shares consist of 1,000,000 preferred shares, par value $ 0.00001 per share, with series, rights, preferences, privileges and restrictions as may be designated from time to time by the Board.

No preferred shares have been issued.

b) Between December 13, 2022 and December 27, 2022, the Company entered into the December 2022 Private Placement, a series of securities purchase agreements with several purchasers for an aggregate of 1,019,488 common shares and warrants to purchase up to 1,019,488 common shares.

On December 13, 2022, the Company executed securities purchase agreements to sell, at a purchase price of $ 8.24 per share, up to 697,485 common shares and warrants to purchase up to 697,485 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 $ 8.40 per share, up to 258,565 common shares and warrants to purchase up to 258,565 common shares, with an exercise price of $ 8.40 per share and a term of three years .

On December 15, 2022, 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 to purchase up to 1,019,488 common shares that relate to the December 2022 Private Placement and received $ 8,024 as of that date net of $ 445 of issuance expenses.

c) Pursuant to a shelf registration on Form S-3 declared effective by the SEC on September 21, 2023, on February 13, 2024 the Company entered into a Sales Agreement with A.G.P., which provides that, upon the terms and subject to the conditions and limitations in the Sales Agreement, the Company may elect, from time to time, to offer and sell common shares having an aggregate offering price of up to $ 10,000 through A.G.P.

acting as sales agent.

During April 2024, the Company sold 42,729 common shares under the Sales Agreement at an average price of $ 5.93 per share.

d) On August 31, 2023, and as amended and restated as of October 9, 2023, Ever After Foods entered into a Simple Agreement for Future Equity, or the SAFE Agreement, with an investor.

Pursuant to the terms of the SAFE Agreement, Ever After Foods will receive an aggregate amount of $ 2,500 , or the SAFE Amount.

On December 12, 2023, the SAFE Agreement had been terminated and the SAFE Amount was not received.

On June 12, 2024, Ever After Foods entered into a share purchase agreement with the Subsidiary, Tnuva and other investors (see note 1f).

(1) a) Reverse share split

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

and (b) issued and outstanding common shares.

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

b) On February 13, 2024 the Company entered into an At-The-Market Sales Agreement, or the Sales Agreement, with A.G.P., which provides that upon the terms and subject to the conditions and limitations set forth in the Sales Agreement, the Company may elect, from time to time, to offer and sell common shares having an aggregate offering price of up to $ 10,000 , through A.G.P., acting as sales agent.

As of June 30, 2025, the Company sold 42,729 common shares under the Sales Agreement at an average price of $ 5.93 per share.

c) On June 12, 2024, Ever After Foods entered into a share purchase agreement with the Subsidiary, Tnuva and other investors, pursuant to which Ever After Foods agreed to issue and sell, ordinary shares in a private placement offering, for aggregate gross proceeds of $ 10,000 .

As part of such offering, the Subsidiary invested $ 1,250 .

As a result, the Company’s capital consideration is $ 8,750 , of which $ 3,185 is attributed to non-controlling interests.

Following the closing of such offering, the Company continued to own approximately 69 % of Ever After Foods’ shares.

d) On January 23, 2025, the Company entered into a Securities Purchase Agreement, or the Securities Purchase Agreement, with a company wholly owned by Mr.

Weinstein, or the Investor, relating to a private placement offering, or the Offering of:

(i) 1,383,948 common shares of the Company, (ii) pre-funded warrants, or the Pre-Funded Warrants, to purchase up to 26,030 common shares, and (iii) warrants, or the Common Warrants, to purchase up to 84,599 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 the Company’s shareholders, or the Shareholder Approval, and until exercised in full.

The Common Warrants have an exercise price of $ 5.568 per share, and are exercisable at any time following the receipt of Shareholder Approval until three years following the date of the receipt of the Shareholder Approval.

The Shareholder Approval was obtained at the Company’s annual meeting of shareholders held 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 Shareholder Approval was obtained.

The Securities Purchase Agreement contains customary representations and warranties and agreements, as well as customary indemnification rights and obligations of the parties.

Under the terms of the Securities Purchase Agreement, the Company appointed Mr.

Weinstein to the Board, effective upon the closing of the Offering, and agreed to continue to recommend his election to its shareholders provided the Investor continues to hold at least 10 % of the Company’s issued and outstanding common shares.

AND ITS SUBSIDIARIES

2 unchanged sentences

- SHAREHOLDERS’ EQUITY (CONT.)

The Offering closed on February 5, 2025, and the gross proceeds to the Company were $ 6,500 , net of $ 420 of issuance expenses.

The Pre-Funded Warrants and the Common Warrants were classified as liabilities on the issuance date, as they were subject to Shareholder Approval (see note 2v).

As of the issuance date, the fair values of the Pre-Funded Warrants and the Common Warrants were estimated at $ 115 and $ 165 , respectively.

The fair value of the Pre-Funded Warrants was calculated based on the fair value of the share price of $ 4.40 and the fair value of the Common Warrants was based on a Black-Scholes model, using an expected volatility of 72.91 %, a risk-free rate of 4.19 %, a contractual term of 3 years, an expected dividend yield of 0 % and a share price at the issuance date of $ 4.40 .

On April 25, 2025, the Company entered into an amendment to the Securities Purchase Agreement, pursuant to which the Company 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, or the Additional Pre-Funded Warrants.

The Additional Pre-Funded Warrants classified as liabilities on the amendment date, as they were subject to Shareholder Approval (see note 2v).

As of April 25, 2025, the amendment to the Securities Purchase Agreement date, the fair values of the Additional Pre-Funded Warrants were estimated at $ 5,427 .

The fair value of the Additional Pre-Funded Warrants was calculated based on the fair value of the share price of $ 5.56 .

As of June 30, 2025, the fair values of the Pre-Funded Warrants, the Additional Pre-Funded Warrants and the Common Warrants were estimated at $ 129 , $ 4,832 and $ 190 , respectively.

The fair value of the Pre-Funded Warrants and the Additional Pre-Funded Warrants were calculated based on the fair value of the share price of $ 4.95 and the fair value of the Common Warrants was based on a Black-Scholes model, using an expected volatility of 76.38 %, a risk-free rate of 3.70 %, a contractual term of 2.58 years, an expected dividend yield of 0 % and a share price of $ 4.95 .

As of June 30, 2025, the Pre-Funded Warrants, the Additional Pre-Funded Warrants and the Common Warrants in a total amount of $ 5,151 were classified as equity, upon obtaining the Shareholder Approval.

e) On February 3, 2025, the Company 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, or the Second Offering, of (i) 759,219 of the Company’s common shares, and (ii) warrants to purchase up to 45,553 common shares, which are classified as equity, or the Second Offering Warrants.

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.

The Second Offering closed on March 19, 2025, and the gross proceeds to the Company were $ 3,500 .

As to Kokomodo Transaction, see note 1d.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

- SHAREHOLDERS’ EQUITY (CONT.)

Share options and RSUs to employees, directors and consultants:

1 unchanged sentence

Compensation Plan, or the 2016 Plan, and the 2019 Equity Compensation Plan, or together, the Plans.

Under the Plans, share options, restricted

shares, or RS, and RSUs may be granted to the Company’s officers, directors, employees and consultants or the officers, directors,

employees and consultants of the Subsidiary.

Under the Plans, share options, RS

and RSUs may be granted to the Company’s officers, directors, employees and consultants or the officers, directors, employees and

consultants of the Subsidiary.

As of June 30, 2025, 831,062 common

1 unchanged sentence

Options to non-employee consultants:

A summary of the share options granted to non-employee consultants

under the Plans by Pluri Inc.

A summary of the share options granted

to non-employee consultants under the Plans by Pluri Inc.

and its Subsidiary is as follows:

Year ended June 30, 2024

(**) Weighted

Number Weighted

exercise price Weighted

1 unchanged sentence

Share options outstanding at beginning of period 8,100 $ 7.44 6.24 29

Share options forfeited ( 3,281 ) $ 18.32 -

Share options granted 9,375 $ 4.40 4.56 13

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

3 unchanged sentences

Year ended June 30, 2025

(**) Weighted

Number Weighted

exercise price Weighted

1 unchanged sentence

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

Share options granted 9,375 $ 4.40 4.56 13

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

Share options exercisable at the end of the period 8,100 $ 7.41 5.24 $ 29

Share options unvested 9,375 $ 4.40 4.56 13

Share options forfeited ( 6,720 ) $ 5.10 -

Share options outstanding and exercisable at end of the period 10,755 $ 6.23 4.23 $ 24

Share options vested and expected to vest at the end of the period 10,755 $ 6.23 4.23 $ 24

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

Compensation expenses recorded in

general and administrative expenses related to options granted to non-employee consultants by Pluri Inc.

and its Subsidiary for the years

ended June 30, 2025 and 2024 were $ 2 and $ 9 , respectively.

AND ITS SUBSIDIARIES

2 unchanged sentences

- SHAREHOLDERS’ EQUITY (CONT.)

Compensation expenses recorded in general

and administrative expenses related to options granted to non-employee consultants by Pluri and its Subsidiary for the years ended June

30, 2024 and 2023 were $ 9 and $ 6 , respectively.

Unamortized compensation expenses related

to options granted to non-employee consultants by Pluri and its Subsidiary are approximately $ 20 to be recognized by the end of March

Options to CEO and directors:

A summary of the share options granted to CEO and directors

under the Plans by Pluri Inc.

Options to CEO and to Former Directors:

A summary of the share options granted

to CEO and to a former directors under the Plans by Pluri Inc.

and its Subsidiary is as follows:

Year ended June 30, 2024

(**) Weighted

Number Weighted

exercise price Weighted

1 unchanged sentence

Share options granted 12,500 $ 6.08 6.73

Share options forfeited ( 1,562 ) $ 6.08 -

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

Share options exercisable at the end of the period 114,676 $ 15.20 3.47

Share options unvested 114,677 $ 15.20 3.47

Share options vested and expected to vest at the end of the period 229,353 $ 15.20 3.47

Share options vested and exercisable at the end of the period 240,291 $ 14.82 2.42

Year ended June 30, 2025

(**) Weighted

Number Weighted

exercise price Weighted

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

Share options granted 12,500 $ 6.08 6.73

Share options forfeited ( 1,562 ) $ 6.08 -

Share options outstanding at the end of the period 240,291 $ 14.82 1.42

Share options vested and exercisable at the end of the period 240,291 $ 14.82 1.42

See note 1d regarding reverse share split

As of June 30, 2025, the aggregate

intrinsic value of these options was $ 0 .

The fair value of the service-based

share option grants was estimated on the grant date using a Black-Scholes option-pricing model.

The weighted average grant date fair

value of share options granted during fiscal year 2024 was $ 3.85 per option.

No share options were granted during fiscal year 2025.

The fair value of each option was

estimated as of the date of grant using the Black-Scholes option-pricing model using the following assumptions:

Underlying value of common shares ($)

Exercise price ($)

Expected historical volatility (%)

Expected terms of the option (years)

Risk-free interest rate (%)

AND ITS SUBSIDIARIES

2 unchanged sentences

- SHAREHOLDERS’ EQUITY (CONT.)

On December 14, 2022, Yaky Yanay, the

Company’s 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 the Company’s existing equity compensation plans.

In that regard, the Company granted Mr.

(i) 41,853 RSUs, vesting ratably each month (see also item c), and (ii) options to purchase 41,853 common shares, vesting ratably each

month, with a term of 3 years, at an exercise price of $ 8.96 per share.

All of these options were granted in December 2022 and will expire

three years from the last vesting date.

In addition, the Board also agreed

Yanay options to purchase 187,500 common shares, with a term of 3 years, with the following terms:

On December 14, 2022, the Company’s

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 the Company’s existing equity compensation plans.

In that regard, the Company granted to the CEO (i) 41,853 RSUs,

vesting ratably each month (see also item c), and (ii) options to purchase 41,853 common shares, vesting ratably each month, with a term

of 3 years, at an exercise price of $ 8.96 per share.

All of these options were granted in December 2022 and will expire three years from

the last vesting date.

In addition, the Board also

agreed to grant the CEO options to purchase 187,500 common shares, with a term of 3 years, with the following terms:

(i) options to purchase

4 unchanged sentences

All options were granted in January 2023 and will expire three years after the last vesting date.

Compensation expenses recorded in general

and administrative expenses related to options granted to CEO and directors by Pluri Inc.

and its Subsidiary for the years ended June

30, 2024 and 2023 were $ 220 and $ 568 , respectively.

Compensation expenses recorded in

general and administrative expenses related to options granted to CEO and directors by Pluri Inc.

and its Subsidiary for the years ended

June 30, 2025 and 2024 were $ 0 and $ 220 , respectively.

RSUs to employees and directors:

1 unchanged sentence

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

and its Subsidiary, for the years ended

June 30, 2024 and 2023:

and its Subsidiary, for the years

ended June 30, 2025 and 2024:

Year ended June 30,

2 unchanged sentences

Expected to vest after the end of period

See note 1d regarding reverse share split

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

- SHAREHOLDERS’ EQUITY (CONT.)

Compensation expenses related to RSUs

granted to employees and directors by Pluri Inc.

and its Subsidiary were recorded as follows:

Year ended June 30,

Research and development expenses

General and administrative expenses

Unamortized compensation expenses related

to RSUs granted to employees and directors by Pluri Inc.

and its Subsidiary are approximately $ 848 to be recognized by the end of January

General and administrative expenses

include compensation expenses for the year ended June 30, 2024 and 2023, in the amount of $ 58 and $ 273 were related to 41,853 RSUs

granted to the CEO, due each month (see also item b).

Unamortized compensation expenses

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

and its Subsidiary are approximately $ 1,547 to be recognized by the

end of June 2028.

RSUs and RS to consultants:

6 unchanged sentences

Unvested at the end of the period

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

Compensation expenses related to RSUs

and RS granted to consultants by Pluri Inc.

Expected to vest after the end of period

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

- SHAREHOLDERS’ EQUITY (CONT.)

Unamortized compensation expenses

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

and its Subsidiary are approximately $ 81 to be recognized by the end of February

All RSUs and RS to employees, directors

and consultants granted during fiscal 2025 and 2024 were granted for no consideration.

Therefore, their fair value was equal to the share

price at the date of grant.

The fair value of all RSUs and RS

were determined based on the closing trading price of the Company’s shares known at the grant date.

The weighted average grant

date fair value of RSU and RS granted during fiscal years 2025 and 2024 was $ 4.49 and $ 4.40 per share, respectively.

Total compensation expenses related

to RSUs and RS granted by Pluri Inc.

and its Subsidiary were recorded as follows:

2 unchanged sentences

General and administrative expenses

Unamortized compensation expenses related

to RSUs and RS granted consultants by Pluri Inc.

and its Subsidiary are approximately $ 21 to be recognized by the end of June 2025.

General and administrative expenses

include compensation expenses for the year ended June 30, 2025 and 2024, in the amount of $ 0 and $ 58 , respectively, were related

to 41,853 RSUs granted to the CEO, due each month (see also item b).

AND ITS SUBSIDIARIES

2 unchanged sentences

- SHAREHOLDERS’ EQUITY (CONT.)

Summary of the Company’s warrants and options:

Year ended June 30, 2024

Warrants / Options Weighted average exercise

share Options and

shares (**) Options and

Summary of the Company’s warrants, pre-funded warrants and options:

June 30, 2025

Warrants / Pre-Funded Warrants / Options Weighted average exercise

share Options,

pre-funded warrants and

shares Options,

pre-funded warrants and

shares Weighted

4 unchanged sentences

$ 8.96 16,875 16,875 0.50

$ 5.57 84,599 84,599 3.00

$ 5.57 45,553 45,553 2.72

Total warrants 1,149,640 1,149,640

Pre-Funded Warrants:

1,002,169 1,002,169 3.00

Total pre-funded warrants 1,002,169 1,002,169

$ 6.23 10,755 10,755 4.23

3 unchanged sentences

$ 20.80 62,500 62,500 1.25

$ 6.08 10,938 10,938 5.73

Total options 251,046 251,046

Total warrants and options 1,277,254 1,267,879

This summary does not include 357,936 RSUs and RS that are not

vested as of June 30, 2024.

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

Total Warrants, Pre-Funded Warrants and Options 2,402,855 2,402,855

This summary does not include 659,314

RSUs and RS that are not vested as of June 30, 2025.

Nasdaq Deficiency Letter:

On May 28, 2024, the Company, received

a deficiency letter, or the Nasdaq Letter, from the Listing Qualifications Department of The Nasdaq Stock Market LLC, or Nasdaq, notifying

the Company that it was not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires the Company to maintain a minimum of $ 2,500

in shareholders’ equity for continued listing on The Nasdaq Capital Market, or the Shareholders’ Equity Requirement, nor was

it in compliance with either of the alternative listing standards, market value of listed securities of at least $ 35,000 or net income

of $ 500 from continuing operations in the most recently completed fiscal year, or in two of the three most recently completed fiscal years.

Pursuant to the Nasdaq Letter, on July

11, 2024, and subsequent to the balance sheet date, the Company submitted a plan to regain compliance, or the Compliance Plan.

the Compliance Plan, Nasdaq granted the Company an extension of time to regain compliance with the Shareholders’ Equity Requirement

until November 24, 2024.

If the Company fails to evidence compliance by the required deadline, the Company may be subject to delisting.

At that time, the Company may appeal Staff’s determination to a Hearings Panel.

The Company intends to take all reasonable

measures available to regain compliance under the Nasdaq Listing Rules and remain listed on Nasdaq.

However, there can be no assurance

the Company will ultimately regain compliance with all applicable requirements for continued listing.

Neither the Nasdaq Letter nor the Company’s

noncompliance have an immediate effect on the listing or trading of the Company’s common shares, which will continue to trade on

The Nasdaq Capital Market under the symbol “PLUR”.

On November 25, 2024, the Company

received a deficiency letter, or the Nasdaq Letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC, or Nasdaq,

notifying the Company that it was not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires listed companies to maintain

a minimum of $ 2,500 in shareholders’ equity for continued listing on The Nasdaq Capital Market.

The Company was also not compliant

with either of the alternative continued listing standards:

a market value of listed securities of at least $ 35,000 or net income

of $ 500 from continuing operations in the most recently completed fiscal year, or in two of the three most recently completed fiscal

On January 6, 2025, the Company submitted

a plan to regain compliance, or the Compliance Plan.

Based on the Compliance Plan, Nasdaq granted the Company an extension until May

24, 2025, to regain compliance.

AND ITS SUBSIDIARIES

1 unchanged sentence

Dollars in thousands (except share and per share amounts)

- FINANCIAL INCOME (EXPENSES), NET

- SHAREHOLDERS’ EQUITY (CONT.)

On May 7, 2025, the Company received

a letter from Nasdaq, determining that the Company has 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 $ 35,000 or

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

Accordingly, the Company has regained compliance and remains in good standing

on the Nasdaq Capital Market.

- TOTAL FINANCIAL INCOME (EXPENSES), NET

Year ended June 30,

Foreign currency translation differences, net

Bank and broker commissions

Interest income on deposits and restricted bank deposits

Income (loss) from hedging derivatives

Change in fair value of warrant and pre-funded warrant liabilities

Income from hedging derivatives

Financial income (expenses), net

EIB loan interest expenses

- SEGMENT REPORTING

Segment Information

Following the adoption of ASU 2023-07, the Company

is required to disclose significant segment expenses that are regularly provided to the CODM.

As a single reportable segment entity,

the Company’s segment performance measure is consolidated net loss.

The Company’s CODM does not regularly review asset information

by segments and, therefore, the Company does not report asset information by segment.

Significant segment expenses are presented in the

Company’s consolidated statements of operations.

The following table presents the significant

segment expenses and other segment items regularly reviewed by the CODM:

Year ended June 30,

Revenues from external customers

Salary expenses

Professional services expenses

Other segment items (1)

Other segment disclosures:

Depreciation and amortization expenses

Share-based compensation expenses

Interest income

Interest expense

(1) Other segment items primarily include cost of revenues, share-based compensation expenses, depreciation and amortization expenses, other research and development expenses, other general and administrative expenses and financial income (expenses) as reported in our consolidated statements of operations.

All of the Company’s long-lived assets

are located in Israel.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

- BASIC AND DILUTED LOSS PER SHARE

Diluted loss per share excludes 1,149,640 shares

underlying outstanding warrants, 1,002,169 shares underlying outstanding pre-funded warrants (see note 11), 246,540 shares underlying

outstanding options, and 659,314 shares underlying outstanding RSUs and RS for twelve months ended June 30, 2025, because the effect

of their inclusion in the computation would be antidilutive.

Diluted loss per share excludes 1,019,488 shares

underlying outstanding warrants, 253,260 shares underlying outstanding options, and 357,936 shares underlying outstanding RSUs and RS

for twelve months ended June 30, 2024, because the effect of their inclusion in the computation would be antidilutive.

The table below shows the reconciliation of the

number of shares in the computation of basic and diluted loss per share attributable to common shareholders:

Year ended June 30,

Net loss attributed to shareholders

Common shares outstanding used in computing net loss per share

attributable to common shareholders

Unexercised vested options with no par value exercise price

Weighted average number of shares used

in computing basic and diluted net loss per share attributable to common shareholders

Net loss per share attributable to common

shareholders – basic and diluted

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

- TAXES ON INCOME

rates applicable to the Company:

Tax rates applicable to the Company:

corporate federal tax rate

21 unchanged sentences

submitted an election notice to the ITA to file a consolidated tax return in Israel commencing with the 2018 tax year.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share and per share amounts)

- TAXES ON INCOME (CONT.)

The Subsidiary:

3 unchanged sentences

its consolidated tax reports in U.S.

dollars based on specific regulations of the ITA which allow, in specific circumstances, filing tax

reports in U.S.

dollars based on specific regulations of the ITA which allow, in specific circumstances, filing

tax reports in U.S.

dollars, or Dollar Regulations.

14 unchanged sentences

According to Amendment No.

73, the tax rate on preferred income from

a preferred enterprise in 2017 and thereafter will be 16 % (in development area A it will be 7.5 %).

73, the tax rate on preferred income

from a preferred enterprise in 2017 and thereafter is 16 % (in development area A it will be 7.5 %), or Preferred Enterprise.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Dollars in thousands (except share and per share amounts)

- TAXES ON INCOME (CONT.)

According to Amendment No.

tax benefits were established for Technological Preferred Enterprise, starting in 2017, will be as follow:

● 6 % rate would apply to qualifying Israeli companies that are part of a group with global consolidated revenue of over NIS 10 billion (approximately $ 2,900,000 ).

tax benefits were established for technological preferred enterprise, or Technological Enterprise, starting in 2017, which are as follows:

● 6 % rate applies to qualifying Israeli companies that are part of a group with global consolidated revenue of over NIS 10 billion (approximately $ 2,900,000 ).

● Other qualifying companies with global consolidated revenue below NIS 10 billion would be subject to a 12 % tax rate (in development area A it will be 7.5 %).

● Withholding tax on dividends paid to foreign entity investors (i.e., not to a private person) would be subject to a reduced rate of 4 % for all qualifying companies (unless further reduced by a treaty), subject that at least 90 % of the company is held by foreign entities (one or more).

● Withholding tax on dividends paid to foreign entity investors (i.e., not to a private person) are subject to a reduced rate of 4 % for all qualifying companies (unless further reduced by a treaty), subject that at least 90 % of the company is held by foreign entities (one or more).

Taxable income which is not produced

as part of Preferred Technological Enterprise income will be taxed at the regular tax rate ( 23 % in 2024).

as part of Technological Enterprise income is taxed at the regular tax rate ( 23 % in 2025 and 2024).

As of June 30, 2025, the Subsidiary’s

management believes that the Subsidiary meets the conditions mentioned above to be considered as a Technological Enterprise.

management believes that the Subsidiary may meet the conditions mentioned above to potentially qualify as a Technological Enterprise

or alternatively as a Preferred Enterprise, subject to confirmation by the relevant authorities.

Pluristem GmbH:

1 unchanged sentence

the German Subsidiary is 15 %, which is derived from the German Corporation Tax Act and Solidarity surcharge of 5.5 % from the 15 % corporate

This corporate tax rate excludes trade tax, which rate depends on the municipality in which the German Subsidiary conducts its

This corporate tax rate excludes trade tax, which rate depends on the municipality in which the German Subsidiary conducts

its business.

Trade tax rate applicable to the German Subsidiary is 15.93 %, which is calculated by determining the Trade Tax Base with

of the trade income and applying the tax factor which differs according to the specific municipality in Germany and equals 455 % for the

municipality of Potsdam.

Ever After Foods:

Ever After Foods is an Israeli tax resident

and is subject to corporate income tax at the rate of 23 %.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Dollars in thousands (except share and per share amounts)

- TAXES ON INCOME (CONT.)

3.5 % of the trade income and applying the tax factor which differs according to the specific municipality in Germany and equals 455 %

for the municipality of Potsdam.

Ever After Foods and Kokomodo:

Each of Ever After Foods and Kokomodo

is an Israeli tax resident and are subject to corporate income tax at the rate of 23 %.

Carryforward losses for tax purposes

2 unchanged sentences

Net operating loss carryforwards arising in

taxable years prior to 2018, can be carried forward and offset against taxable income for 20 years and thus will expire between 2022 and

Net operating losses generated in tax years 2002, 2003 and 2004 have expired and were reduced from the total net operating loss

carryforward available.

taxable years prior to 2018, can be carried forward and offset against taxable income for 20 years and thus will expire between 2022

Net operating losses generated in tax years 2002 until 2005 expired and were reduced from the total net operating loss carryforward

Utilization of U.S.

net operating losses

may be subject to substantial annual limitations due to the “change in ownership” provisions of the U.S.

Internal Revenue

Code of 1986, Section 382 and similar state provisions.

may be subject to substantial annual limitations due to the “change in ownership” provisions of Section 382 of the U.S.

Revenue Code of 1986, and similar state provisions.

The annual limitation may result in the expiration of net operating losses before

2 unchanged sentences

business income and business capital gain in the future for an indefinite period.

In January 2018, Pluri Inc.

as an Israeli resident with the ITA.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Dollars in thousands (except share and per share amounts)

- TAXES ON INCOME (CONT.)

As of June 30, 2025, Pluri Inc.

the Subsidiaries consolidated accumulated losses, for tax purposes, are approximately $ 144,906 , which may be carried forward and offset

against taxable business income and business capital gain in the future for an indefinite period.

and the Subsidiaries consolidated accumulated losses, for tax purposes, are approximately $ 144,727 , which may be carried forward and

offset against taxable business income and business capital gain in the future for an indefinite period.

The German Subsidiary has accumulated

8 unchanged sentences

Pluristem GmbH

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Dollars in thousands (except share and per share amounts)

- TAXES ON INCOME (CONT.)

Deferred income taxes:

Deferred income taxes reflect the net

tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts

used for income tax purposes.

tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the

amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets are as follows:

4 unchanged sentences

Allowances and reserves

Deferred tax liability, net - Kokomodo Transaction:

Cocoa cell growth and application platform

Ability to develop additional applications

Total deferred tax assets before valuation allowance

Valuation allowance

Net deferred tax asset

Net deferred tax liability

As of June 30, 2025 and 2024, the Company

has provided full valuation allowances with respect to the deferred tax assets resulting from tax loss carryforwards and other temporary

differences, since it has a history of operating losses and due to current uncertainty concerning its ability to realize these deferred

tax assets in the future.

differences of the Israeli entities (other than Kokomodo, see note 1d), since it has a history of operating losses and due to current

uncertainty concerning its ability to realize these deferred tax assets in the future.

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Dollars in thousands (except share and per share amounts)

- TAXES ON INCOME (CONT.)

The Company accounts for its income

7 unchanged sentences

In 2025 and 2024, the main reconciling

item of the statutory tax rate of the Company ( 21 % to 23 %) to the effective tax rate ( 0 %) is tax loss carryforward and R&D credit

carryforward for which a full valuation allowance was provided.

AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

item of the statutory tax rate of the Company ( 21 % to 23 %) to the effective tax rate ( 0 %) is tax loss carryforward and research and development

credit carryforward for which a full valuation allowance was provided.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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 8. Financial Statements and Supplementary Data