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Item 2. Management’s Discussion and Analysis

2025-11-12 compared with 2025-05-13 · 299 added, 407 removed, 105 unchanged (87% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations.

Forward-Looking Statements

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

the expected development, time-to-market and potential benefits from our products and ventures, based on our cell-based technology platform in regenerative medicine, immunotherapy, food technology, or food tech, agriculture technology (“agtech”), and our Contract Development and Manufacturing Organization, (“CDMO”), business, as well as potentially in other industries and verticals that have a need for our mass scale and cost-effective cell expansion platform;

our expectations for market and industry growth;

the expected development, time-to-market and potential benefits from our products and ventures, based on our cell-based technology platform in regenerative medicine, immunotherapy, food technology (“food tech”), agriculture technology (”AgTech”), aesthetics and wellness, and our Contract Development and Manufacturing Organization (“CDMO”) business, as well as potentially in other industries and verticals that have a need for our mass scale and cost-effective cell expansion platform;

our expectations of market and industry growth;

the prospects of entering into additional license agreements, joint ventures, partnerships or other forms of cooperation with other companies, government institutes, research organizations and medical institutions, and the ability to maintain those agreements, joint ventures, partnerships or other forms of cooperation;

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achieving regulatory approvals;

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

receipt of future funding from the Israel Innovation Authority (“IIA”), the European Union’s Horizon programs, as well as grants from other independent third parties;

the capabilities of our placenta expanded (“PLX”), cells, including future collaborations to further advance the development of our PLX- PAD and PLX-R18 cell therapy as a potential novel treatment;

the expected clinical development of a new allogeneic Placental Mucosal Associated Invariant T (“MAIT”), and the potential benefits it can produce for advanced cell-based therapies for immune disorders and neurodegenerative diseases;

the expected clinical development of a new allogeneic placental Mucosal Associated Invariant T (“MAIT”), and the potential benefits it can produce for advanced cell-based therapies for immune disorders and oncology diseases;

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

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

general market, political and economic conditions in the countries in which we operate, including those affected by ongoing instability in the Middle East and the armed conflict involving Israel and Hamas, Hezbollah, Iran and other terrorist organizations, as well as developments in international trade policy, such as tariffs, sanctions, and other trade barriers imposed by the U.S.

general market, political and economic conditions in the countries in which we operate, including those affected by ongoing instability in the Middle East and the armed conflict involving Israel and terrorist organizations such as Hamas, Hezbollah, Ansar Allah (Houthis) and other terrorist organizations, as well as tensions with other regional countries hostile to Israel, may directly affect our business;

developments in international trade policy, such as tariffs, sanctions, and other trade barriers imposed by the U.S.

or other countries, which could affect our sourcing and distribution channels, increase costs, or otherwise negatively impact our operations and financial results;

our ability to continue to comply with Nasdaq Listing Rule 5550(b)(1),

which requires us to maintain a minimum of $2.5 million in stockholders’ equity (the “Stockholders’ Equity Requirement”),

or with either of the alternative listing standards (including the market value of listed securities of at least $35 million or having

net income of $500,000 from continuing operations in the most recently completed fiscal year, in two of the three most recently completed

fiscal years), for continued listing on the Nasdaq Capital Market.

our ability to continue to comply with the rules for continued listing on the Nasdaq Capital Market.

Our business and operations

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Also, historic results referred to in this periodic report would

be interpreted differently considering additional research, development, clinical and preclinical trials results.

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

Except as required by

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

mean Pluri Inc., our wholly owned subsidiaries, Pluri Biotech Ltd., Pluristem GmbH, and Coffeesai Ltd., and our subsidiaries Ever After

(“Ever After Foods”), unless otherwise indicated or as otherwise required by the context.

All references to common shares,

or price per common share, in this Quarterly Report on Form 10-Q, reflect the 1-for-8 reverse stock split effectuated by us on April 1,

refer to Pluri Inc., together with its wholly owned Israeli subsidiary, Pluri Biotech Ltd.

(“Pluri Biotech”) and the subsidiaries

of Pluri Biotech Ltd., including its wholly owned Israeli subsidiaries, Coffeesai Ltd.

(“Coffeesai”) and Cellav Health and

Aesthetics Ltd.

(“Cellav”), its majority-owned Israeli subsidiaries, Kokomodo Ltd.

(“Kokomodo”) and Ever After

(“Ever After Foods”) and its wholly owned German subsidiary, Pluristem GmbH (collectively, the “Subsidiaries”),

unless otherwise indicated or as otherwise required by the context.

We are a biotechnology company

with an advanced cell-based technology platform, which operates in one operating segment.

We have developed a unique three-dimensional

(“3D”) cell expansion platform, supported by an in-house, industrial-scale Good Manufacturing Practice (“GMP”)

cell manufacturing facility.

We are currently applying this technology across the fields of regenerative medicine, immunotherapy, food

technology, and agricultural technology.

In addition, we have launched a CDMO business and intend to expand the application of our platform

to other industries and sectors requiring scalable and cost-efficient cell expansion solutions via partnerships, joint ventures, licensing

agreements and other types of collaborations.

Our operations are dedicated

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

technologies aimed at delivering innovative solutions across a range of industries.

leveraging our proprietary three-dimensional (“3D”) cell expansion platform to develop scalable, cell-based solutions across

multiple sectors.

Our technology is supported by an in-house, industrial-scale cell manufacturing facility registered as a manufacturer

with the U.S.

Food and Drug Administration (FDA) and operated in accordance with Good Manufacturing Practice standards, currently on a

self-declared basis.

Our operations are dedicated to the research, development, and manufacturing of cell-based products, as well as the

commercialization of cell therapeutics and related technologies aimed at delivering innovative solutions across a range of industries.

We apply our platform across the fields of regenerative medicine, aesthetics and wellness, food technology, agricultural technology, and

through our Contract Development and Manufacturing Organization (“CDMO”) business, and we intend to expand the application

of our platform to additional industries that require scalable and cost-efficient cell expansion solutions, including through partnerships,

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

Our operations pursue a variety

of initiatives that leverage the Company’s technology across diverse applications and industries, as set forth below:

We use our advanced cell-based

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Recently, we have also launched a novel immunotherapy platform.

PLX Cells - Our PLX

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

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

for hip fracture, incomplete recovery following bone marrow transplantation, critical limb ischemia (“CLI”), Chronic Graft

versus Host Disease and a potential treatment for Hematopoietic Acute Radiation Syndrome (“H-ARS”).

We believe that each of

these indications is a severe unmet medical need.

In July 2023, we announced

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

National Institute of Allergy and Infectious Diseases (“NIAID”),

which is part of the NIH.

Under such contract, we were to collaborate with the U.S.

Department of Defense’s Armed Forces Radiobiology

Research Institute (“AFRRI”), and the Uniformed Services University of Health Sciences (“USUHS”), in Maryland,

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

can result from nuclear disasters and radiation exposure.

On April 15, 2025, Pluri Biotech Ltd.

received a formal notice of termination

from the NIAID, according to which, the contract was terminated for the Government’s convenience and such termination was effective

as of April 15, 2025.

As of March 31, 2025, prior to receiving the notice of termination, we received approximately $2.16 million in funding

under the contract, and we expect to receive an additional amount of approximately $75 thousand for activities conducted by that date.

We believe that the termination of the contract may reflect broader federal budgetary and administrative adjustments that have recently

affected multiple health-related agencies, including the NIH, and are monitoring these developments closely to assess any potential implications

on our ongoing programs.

Immunotherapy MAIT cells :

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

a critical area in medicine where effective treatments are currently insufficient.

We believe that our MAIT cells, isolated from the human

placenta, offer substantial potential benefits compared to conventional T-cells.

MAIT cells are potent effector

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

their migration directly to tumor sites.

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

our MAIT cells are designed to be allogenic universal products.

Benefiting with a very restricted T-cell receptor, the MAIT cells minimize

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

for hip fracture, incomplete recovery following bone marrow transplantation, critical limb ischemia, Chronic Graft versus Host Disease

(“GvHD”), knee osteoarthritis and a potential treatment for Hematopoietic Acute Radiation Syndrome (“H-ARS”).

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

We believe that each of these indications is a severe unmet

medical need.

Immunotherapy Mucosal Associated

Invariant T (“MAIT”) cells - In May 2024, we launched a novel allogenic immunotherapy platform utilizing MAIT cells specifically

designed to address solid tumors - a critical area in medicine where effective treatments are currently insufficient.

We believe that

our MAIT cells, isolated from the human placenta, offer substantial potential benefits compared to conventional T-cells.

Placental MAIT cells

are potent effector cells, potentially targeting tumors through multiple mechanisms while expressing high levels of various chemokine

receptors, which facilitate their migration directly to tumor sites.

Furthermore, unlike conventional autologous T-cells typically collected

from peripheral blood, our MAIT cells are designed to be an allogenic universal product.

Benefiting with very restricted T cell receptor,

the MAIT cells minimize their likelihood of inducing GvHD, a significant advantage over other potential allogeneic products.

We are aiming

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

In April 2024, we unveiled

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

patent titled, “System

and Methods for Immune Cells Expansion and Activation in Large Scale.” This innovative approach ensures that the produced immune

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

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

In April 2025, we announced

that the U.S.

Patent and Trademark Office (the “USPTO”), has issued a patent covering our immune cell expansion technologies.

The patent claims a proprietary system and method for immune cell activation, genetic engineering, and large-scale 3D expansion.

Additionally,

we announced that we were issued a patent in Israel, which mirrors a previously granted U.S.

Following these recent patent

grants, our intellectual property estate includes over 250 patents pending, allowed, and granted.

In January 2024, we launched

a new business division offering cell therapy manufacturing services as a CDMO:

PluriCDMO™ offers CDMO services

to companies from early preclinical development, through late-stage clinical trials and commercialization, with a mission to deliver high-quality,

essential therapies to patients.

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

In January 2024, we launched a new business division offering cell therapy manufacturing services as a CDMO:

offers CDMO for cell therapy manufacturing expertise to companies from early preclinical development, through late-stage clinical trials

and commercialization, with a mission to deliver high-quality, essential therapies to patients, as well as other services.

We have signed

several agreements with clients and are currently generating revenues from PluriCDMO™.

We are actively involved in

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

(a) cell-based coffee business activity

through our PluriAgtech business vertical, which is incorporated into our wholly owned subsidiary, Coffeesai Ltd., (b) an innovative proof-of-concept

(“POC”), collaboration with ICL Group Ltd., a leading global specialty minerals company, to revolutionize bio stimulant delivery

and enhance yield sustainably, and (c) a strategic POC agreement with a leading international agriculture corporation which is intended

to boost the global vegetable product supply, streamline supply chains, and combat global climate change, while ensuring a natural and

a more sustainable future for agriculture.

In March 2024, we announced

an important expansion to our intellectual property portfolio with a new patent approval from the Israel Patent Office, that is designed

to reshape the agricultural technology landscape.

The patent represents a major breakthrough in our proprietary 3D bioreactor technology,

enabling efficient cultivation of plant cells across various applications, from sustainable agriculture to critical healthcare solutions.

On January 23, 2025, the Company entered into a binding term sheet

(the “Term Sheet”) for the purchase of certain shares representing approximately 71% of the equity of Kokomodo Ltd.

(on a fully diluted basis), an Israeli agtech company specializing in cultivated cacao production, for an aggregate purchase price of

$4.5 million, payable in Common Shares of the Company.

Following the execution of the Term Sheet, on March 13, 2025, the Company and the

Subsidiary (collectively, the “Purchaser”), entered into a Share Purchase Agreement (the “Share Purchase Agreement”),

effective as of March 12, 2025, with Chutzpah Holdings Limited, a company wholly owned by Mr.

Alejandro Weinstein, a director of the Company,

and Plantae Bioscience Ltd., a corporation controlled by Mr.

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

April 28, 2025, the Seller sold to the Purchaser 400,000 ordinary shares and 175,000 preferred seed-1 shares (the “Purchased Shares”),

representing approximately 71% of the equity of Kokomodo, for an aggregate purchase price of $4.5 million, payable in 976,139 of our common

shares (the “Consideration Shares”).

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

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

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

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

In 2022, we announced the

establishment of a joint venture with Tnuva Food Industries – Agricultural Co-Operative in Israel Ltd.

(“Tnuva”), Ever

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

meat products of all kinds and types.

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

(a) an innovative proof-of-concept

(“POC”) collaboration with ICL Group Ltd., a leading global specialty minerals company, through its Open Innovation program,

to revolutionize bio stimulant delivery and enhance yield sustainably;

(b) a strategic POC agreement

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

and promoting a more sustainable future for agriculture;

coffee and cacao through business activities operated via our subsidiaries in the plant-based vertical, Coffeesai and Kokomodo, respectively:

Coffeesai - In

2024, we established Coffeesai Ltd., an Israeli subsidiary focused on developing cultivated, cell-cultured coffee.

This initiative addresses

key challenges facing the traditional coffee industry, such as climate-related crop instability, supply chain disruptions, and environmental

By leveraging controlled, scalable bioprocess, Coffeesai aims to deliver consistent product quality, reduced resource consumption,

and long-term cost efficiency.

Coffeesai has successfully

demonstrated a POC coffee beverage, validating the potential of its technology.

Ongoing efforts are focused on enhancing flavor and aroma

profiles through bioprocess optimization and downstream refinement.

Kokomodo - On

April 28, 2025, we completed the acquisition of approximately 79% of the equity in Kokomodo (held as a majority owned subsidiary of our

wholly owned subsidiary, Pluri Biotech).

Kokomodo, an Israeli company, is an innovative agfood startup pioneering the sustainable production

of cacao using cellular agriculture technology.

Instead of relying on traditional tropical farming, Kokomodo cultivates real cacao directly

from plant cells in controlled environments, such as bioreactors, making climate-resilient cacao accessible year-round on a global scale.

Founded in 2024, Kokomodo aims to transform the cacao industry, reducing environmental impact while ensuring a steady, high-quality supply

for chocolate and related products.

Ever After Foods

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

Ever After Foods, incorporated under the laws of the State of Israel.

The purpose of the joint venture is to develop and commercialize

scalable production technologies for cultivated meat, supporting the development of a wide range of cultivated meat products with industry

Leveraging Pluri’s innovative

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a share purchase agreement by and among Ever After Foods, Tnuva, and certain other international strategic investors, pursuant to which

Ever After Foods issued and sold, ordinary shares in a private placement offering, for aggregate gross proceeds of $10 million.

of such private placement offering, we invested $1.25 million.

In addition, our wholly owned subsidiary, Pluri Biotech Ltd., and Ever

Ever After Foods issued and sold, ordinary shares in a private placement offering (the “Offering”), for aggregate gross proceeds

of $10 million.

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

In addition, our wholly owned subsidiary, Pluri Biotech, and Ever

After Foods executed an Amended and Restated Technology License Agreement, dated June 12, 2024 (the “Amended License”).

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The $10 million funding round

is intended to support Ever After Foods’ B2B technology platform, positioning it as a sustainable technology enabler and will allow

it to move to their own facility during March 2025.

Following the closing of such private placement offering, the Subsidiary holds approximately

69% of Ever After Foods.

RESULTS OF OPERATIONS – THREE AND NINE

MONTHS ENDED MARCH 31, 2025 COMPARED TO THREE AND NINE MONTHS ENDED MARCH 31, 2024

Revenues for the nine-month

and three-month periods ended March 31, 2025, were $938,000 and $427,000, respectively, as compared to $230,000 and $71,000, respectively,

during the nine-month and three-month periods ended March 31, 2024.

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

2025, and 2024 were mainly related to services provided to CDMO clients in the field of process and product development and in the agtech

The increase in revenues is mainly attributed to the launch of new business verticals, specifically in the CDMO field and an increase

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

supports Ever After Foods’ B2B technology platform, positioning it as a sustainable technology enabler.

Following the closing of

the Offering, Pluri Biotech holds approximately 69% of Ever After Foods.

Aesthetics and Wellness

- In November 2025, we established Cellav, a wholly owned subsidiary focused on developing regenerative skin and hair solutions using

its proprietary 3D cell expansion technology.

Cellav develops cell-derived ingredients, including exosomes and cell extracts, for integration

into partner formulations and for use in professional and consumer skincare and haircare products.

During the first quarter

of fiscal year 2026, and through the date of this report, we continued to advance our activities across our foodtech, AgTech and cell-based

aesthetics and wellness subsidiaries.

Each of Ever After Foods, Kokomodo, Coffeesai and Cellav entered into collaboration agreements

with leading counterparties in Asia, Europe, and the United States to evaluate and potentially further develop applications of our proprietary

technologies in their respective fields.

These collaborations are structured around initial, partner-funded POC or pilot programs, designed

to assess the application of our technologies in cultivated meat, cacao, coffee, and cell-based skincare, and may, subject to positive

outcomes, be expanded into subsequent development or commercialization activities.

Collectively, we believe that these collaborations

underscore the growing commercial and technological validation of our platform and enhance our strategic positioning across multiple

RESULTS OF OPERATIONS – THREE MONTHS ENDED SEPTEMBER 30, 2025,

COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2024.

Revenues for the three-month

period ended September 30, 2025 were $316,000, as compared to $326,000 for the three-month period ended September 30, 2024.

for the three-month period ended September 30, 2025 and 2024, were primarily generated from services provided to CDMO clients for process

and product development, as well as income from fees in the AgTech sector.

Cost of Revenues

Cost of revenues for each

of the nine-month and three-month periods ended March 31, 2025, were $491,000 and $291,000.

Cost of revenues includes (1) manufacturing

costs related to our CDMO and agtech fields, which primary consist of materials, personnel-related and overhead costs, and (2) royalties

which we are obligated to pay to the EIB, according to the finance agreement (the “EIB Finance Agreement”), executed with

the EIB by us, Pluri Biotech Ltd.

and Pluristem GmbH in April 2020.

We had no cost of revenues for the nine-month and three-month periods

ended March 31, 2024.

Cost of revenues for the

three-month period ended September 30, 2025 was $201,000, as compared to $126,000 for the three-month period ended September 30, 2024.

Cost of revenues includes manufacturing costs related to our CDMO and AgTech fields, which primary consist of materials, personnel-related

and overhead costs.

The increase in cost of revenues is attributed to higher personnel costs associated with a particular project.

Research and Development Expenses, Net

R&D expenses, net (costs

less participation by the IIA, Horizon Europe and the NIAID) for the nine-month period ended March 31, 2025, decreased by 2% from $9,051,000

for the nine-month period ended March 31, 2024, to $8,857,000.

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

expenses following the completion of our clinical studies, partially offset by an increase related to subcontractors activity in our NIAID

and immunotherapy projects, and (2) a decrease in materials costs related to a supplier credit, partially offset by (3) an increase in

material purchases in line with our manufacturing needs and plans, and (4) a decrease in R&D expenses due to classification of expanses

into cost of revenues.

R&D expenses, net (costs

less participation by the IIA, Horizon Europe and the NIAID) for the three-month period ended March 31, 2025, decreased by 2% from $3,094,000

for the three-month period ended March 31, 2024, to $3,043,000.

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

expenses following the completion of our clinical studies, partially offset by an increase related to subcontractors activity in our NIAID

and immunotherapy projects, (2) a decrease in material purchases and consultants’ activity in line with our manufacturing needs

and plans, and (3) a decrease in R&D expenses due to classification of expenses into cost of revenues.

less participation by the IIA, Horizon Europe and the National Institute of Allergy and Infectious Diseases (“NIAID”)) for

the three-month period ended September 30, 2025 increased by 36% from $2,889,000 for the three-month period ended September 30, 2024,

to $3,931,000.

The increase is mainly attributed to (1) an increase in salaries and a related expenses mainly attributed to exchange rate

differences expenses and due to the addition of new employees following the acquisition of our new subsidiary, Kokomodo, and (2) an increase

in lease payments on our facilities mainly due to Ever After Foods’ new operating facility, partially offset by (3) a decrease in

material purchases in accordance with our manufacturing needs and plans, and (4) a decrease in participation by NIAID.

General and Administrative Expenses

General and administrative

expenses for the nine-month period ended March 31, 2025, decreased by 2% to $7,145,000, compared to $7,303,000 for the nine-month period

ended March 31, 2024.

This decrease was primarily driven by a reduction in share-based compensation expenses, mainly attributed to employee

terminations and amortization of restricted stock unit (“RSU”), expenses over time.

This reduction was partially offset by

the following increases:

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

Yaky Yanay, our

Chief Executive Officer (“CEO”) (following his salary reduction from January 2023 through December 2023, whereby he waived

75% of his salary and converted it to RSUs, and options), (2) an increase in salaries and related expenses due to reinstatement of temporary

reduction in employees’ regular working hours for a limited period in December 2023, (3) an increase in bonus expenses for certain

employees, including our CEO and Mrs.

Chen Franco-Yehuda, our former Chief Financial Officer (“CFO”), related to performance-based

bonuses pursuant to their respective employment agreements, and (4) increased share-based compensation expenses related to RSUs and options

granted during the prior year to employees, officers, directors and consultants.

General and administrative

expenses for the three-month period ended March 31, 2025, decreased by 1% from $2,511,000 for the three-month period ended March 31, 2024,

to $2,493,000.

The decrease is mainly attributed to (1) a decrease in share-based compensation expenses related to employee terminations

and RSUs, and (2) expenses amortization over time, partially offset by (3) an increase in salaries and related expenses due to reinstatement

of temporary reduction in employees’ regular working hours for a limited period in December 2023, (4) an increase in bonus expenses

for certain employees, including our CEO and our former CFO for certain performance-based bonuses as defined in their employment agreement,

and (5) an increase in share-based compensation expenses related to RSUs and options which were granted during the third quarter of fiscal

year 2024 and the first quarter of fiscal year 2025 to employees, officers, directors and consultants.

expenses for the three-month period ended September 30, 2025 increased by 1% from $2,509,000 for the three-month period ended September

30, 2024 to $2,534,000, mainly due to an increase in share-based compensation expenses related to RS which were granted during the first

quarter of fiscal year 2026 to consultants, partially offset by a decrease in expenses related to corporate activities, such as professional

services expenses and public relations.

Other Financial Income (expenses), net

Other financial income (expenses),

net, decreased from $1,290,000 in financial income for the nine-month period ended March 31, 2024, to $714,000 in financial income for

the nine-month period ended March 31, 2025.

This decrease is mainly attributed to (1) exchange rate differences expenses related to a

loan obtained from EIB (the “EIB Loan”) in April 2020 pursuant to the EIB Finance Agreement, following fluctuation between

dollar against the Euro, (2) a decrease in interest income from deposits, resulting from lower interest rates and reduced deposit

levels due to withdrawals, (3) a decrease due to exchange rate expenses on a lease liability due to the strength of the New Israeli Shekel

(“NIS”), against the U.S Dollar, and (4) less income from hedging transactions.

Other financial income (expenses), net, changed from $362,000 in financial

income for the three-month period ended March 31, 2024, to $723,000 in financial expenses for the three-month period ended March 31, 2025.

The decrease is mainly attributed to (1) exchange rate differences expenses related to the EIB Loan following fluctuation between the

dollar against the Euro, and (2) a decrease due to exchange rate expenses on a lease liability due to the strength of the NIS against

the U.S Dollar.

net, increased from $621,000 in financial expenses for the three-month period ended September 30, 2024 to $439,000 in financial income

for the three-month period ended September 30, 2025.

This increase is mainly attributed to exchange rate differences expenses related

to the EIB Loan due to fluctuations between the U.S.

dollar against the Euro, and from an increase in income from hedging transactions,

partially offset by a decrease in interest income from deposits, caused by reduced deposit balances following withdrawals.

Interest Expenses

Interest expenses related

to our outstanding EIB Loan and all changes during the nine-month and three-month periods ended March 31, 2025, compared to the nine-month

and three-month periods ended March 31, 2024, are attributable solely to currency rate differences of the Euro compared to the U.S.

Net loss for the nine-month

and three-month periods ended March 31, 2025, were $15,481,000 and $6,335,000, respectively, as compared to net loss of $15,482,000 and

$5,390,000 for the nine-month and three-month periods ended March 31, 2024, respectively.

The increase in net loss was mainly due to exchange

rate differences expenses as mentioned above.

Net loss per share attributed to shareholders for the nine-month and three-month periods

ended March 31, 2025, were $2.56 and $0.94, respectively, as compared to $2.92 and $1.01 for the nine-month and three-month periods ended

March 31, 2024, respectively.

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

three-month periods ended March 31, 2025, of $496,000 and $188,000, respectively.

For the nine-month and three-month

periods ended March 31, 2025, and 2024, we had weighted average common shares outstanding of 5,857,743, 6,563,555 and 5,193,808, 5,221,162,

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

The increase in weighted average

common shares outstanding reflects the issuance of additional shares pursuant to a securities purchase agreement entered into on January

23, 2025 and an additional securities purchase agreement entered into on February 3, 2025 (the “Securities Purchase Agreement”

and the “Additional Securities Purchase Agreement”, respectively), and additional shares upon the vesting of RSUs and restricted

shares issued to directors, officers, employees and consultants.

to our outstanding balance of the EIB Loan and all changes during the three-month period ended September 30, 2025 compared to the three-month

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

Net loss for the three-month

period ended September 30, 2025, was $6,132,000, compared to net loss of $6,036,000 for the three-month period ended September 30, 2024.

The increase is mainly due to the increase in R&D expenses, net and general and administrative expenses, partially offset by an increase

in financial income, net, for the reasons mentioned above.

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

Foods for the three-month period ended September 30, 2024 of $154,000, and $282,000 for the three-month period ended September 30, 2025

with respect to Ever After Foods and Kokomodo.

Loss per share for the three-month

period ended September 30, 2025, was $0.65, compared to $1.08 loss per share for the three-month period ended September 30, 2024.

decrease in the loss per share was primarily an increase in our weighted average number of shares outstanding which reflects the issuance

of additional shares upon the vesting of RSUs and restricted shares issued to directors, employees and consultants and pre-funded warrants,

partially offset by an increase in the loss for the year.

For the three-month periods

ended September 30, 2025 and 2024, we had weighted average common shares outstanding of 8,995,635 and 5,459,236, respectively, which were

used in the computations of net loss per share for the three-month period.

Liquidity and Capital Resources

As of March 31, 2025, our

total current assets were $27,455,000 and total current liabilities were $5,705,000.

On March 31, 2025, we had a working capital surplus

of $21,750,000, total equity of $483,000, after deduction of $4,957,000 which is attributed to the non-controlling interest in Ever After

Foods, and an accumulated deficit of $(435,457,000).

As of September 30, 2025,

our total current assets were $16,921,000 and total current liabilities were $32,160,000.

On September 30, 2025, we had a working capital

deficit of $15,239,000, total deficit of $5,647,000, out of which $5,713,000 is attributed to the non-controlling interest in Ever After

Foods and Kokomodo, and an accumulated deficit of $448,905,000.

Our cash and cash equivalents

and restricted cash as of March 31, 2025, amounted to $8,906,000, compared to $7,354,000 as of March 31, 2024, and compared to $7,037,000

and restricted cash as of September 30, 2025 amounted to $4,687,000, compared to $3,563,000 as of September 30, 2024, and compared to

$6,317,000 as of June 30, 2025.

Cash balances changed in the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024,

for the reasons presented below.

Net cash used for operating

activities was $12,995,000 in the nine months ended March 31, 2025, compared to $13,708,000 in the nine-month ended March 31, 2024.

used in operating activities in the nine months ended March 31, 2025, and 2024 consisted primarily of payments of fees to our suppliers,

subcontractors, professional services providers and consultants, and payments of salaries to our employees, partially offset by income

from our CDMO clients, agtech fields activities and by grants from the IIA, the Horizon Europe program, and funds received from the NIAID

Investing activities provided

cash of $4,998,000 in the nine months ended March 31, 2025, compared to cash provided of $15,389,000 for the nine months ended March 31,

The investing activities in the nine-month period ended March 31, 2025, and 2024 consisted primarily of the proceeds from withdrawal

of short-term deposits, net of $5,895,000 and $15,702,000, respectively.

Financing activities provided

cash of $9,968,000 in the nine months ended March 31, 2025, which were related to net proceeds received from the of issuances of common

shares, pre-funded warrants and warrants, net of issuance cost related to the Offering and the Second Offering.

Cash balances changed in the three months ended September 30, 2025 compared to the three months ended

September 30, 2024 for the reasons presented below.

Cash used in operating activities

increased to $5,428,000 during the three months ended September 30, 2025,

compared to $4,064,000 during the three months

ended September 30, 2024, primarily due to a decrease in grants received from the IIA and NIAID contract funding, effect of exchange rate,

and continued payments to employees, partially offset by a decrease in continued payments to suppliers and subcontractors.

Cash provided by investing

activities was $3,850,000 and $585,000 during the three months ended September 30, 2025, and 2024, respectively.

Cash provided by investing

activities for the three months ended September 30, 2025, consisted primarily of proceeds from short-term deposits, net of $3,966,000,

partially offset by payments of $116,000 related to investments in property and equipment.

Cash provided by investing activities for

the three months ended September 30, 2024, consisted primarily of proceeds from short-term deposits, net of $793,000, partially offset

by payments of $208,000 related to investments in property and equipment.

We had no financing activities

in the nine months ended March 31, 2024.

On December 14, 2022, our

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

issuable under our existing equity compensation plans.

In that regard, we granted Mr.

Yanay (i) 41,853 RSUs, vesting ratably each month,

and (ii) options to purchase 41,853 common shares, vesting ratably each month, with a term of 3 years from vesting date, at an exercise

in the three months ended September 30, 2025, and 2024.

In July 2025, our Chief

Executive Officer (“CEO”) agreed to forgo 25% percent of his monthly base salary for a period of six months commencing July

On October 15, 2025, the

Company’s Board of Directors (the “Board”) approved a grant of equity awards to our CEO, in recognition of the achievement

of certain performance objectives and other accomplishments during fiscal year 2025.

The approved equity awards consist of (i) 39,050

RSUs which are fully vested, and (ii) stock options to purchase 39,050 common shares of the Company which are fully vested and exercisable

for a period of three years at an exercise price of $5.00 per share.

Since only share-based awards, rather than cash compensation, were

granted for such achievement of performance objectives for fiscal year 2025, the provision previously recorded in the amount of approximately

$41,000, was reversed.

The Board further approved,

contingent upon the achievement of certain objectives and accomplishments by December 31, 2025, the future grant to the CEO of (i) 9,266

RSUs, and (ii) stock options to purchase 9,266 common shares of the Company.

The grant date of such RSUs and stock options, if awarded,

will be the date on which the applicable objectives are satisfied, and the stock options will be exercisable for three years at an exercise

price of $5.00 per share.

In addition, the Board of Directors also agreed to grant Mr.

Yanay options to purchase 187,500 common shares,

with a term of 3 years from vesting date, with the following terms:

(i) options to purchase 62,500 common shares at an exercise price

of $12.48 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, (ii) options to purchase 62,500 common shares

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

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

On February 13, 2024, we entered

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

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

As of November 12, 2024, we have sold an aggregate of 42,729 common shares pursuant to the Sales Agreement at an average price of $5.93

We have an effective Form

S-3 registration statement (File No.

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

registration process.

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

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

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

In April 2020, we and our

subsidiaries, Pluri Biotech Ltd.

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

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

in the aggregate, payable in three tranches.

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

The term of the

project was three years commencing on January 1, 2020.

During June 2021, we received the first tranche in the amount of €20

million pursuant to the EIB Finance Agreement.

The amount received is due to be repaid on June 1, 2026, and bears annual interest of 4%

to be paid together with the principal of the loan.

We are currently in discussions with the EIB regarding a potential restructuring of

the terms of the EIB Loan.

Such discussions are currently focused on the new terms of the EIB Loan, including an extension of the current

maturity date of the EIB Loan.

The Company is expecting to finalize such discussions by the end of June 2025;

however, there is no certainty

that such restructuring will be achieved on the expected timeline or at all.

As of March 31, 2025, the interest accrued was in the amount

of approximately €3.06 million.

In addition to the interest payable, the EIB is also entitled to royalty payments, pro-rated to the

amount disbursed from the EIB Loan, on our consolidated revenues beginning in the fiscal year 2024 up to and including its fiscal year

2030, in an amount equal to up to 2.3% of our consolidated revenues below $350 million, 1.2% of our consolidated revenues between $350

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

As of March 31, 2025, we had an accrued royalty

in the amount of $8 thousand.

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

the EIB Finance Agreement.

On July 11, 2023, we signed

a three-year $4.2 million contract with the NIAID, to support the development of our PLX-R18 cell therapy as a potential novel treatment

The program included collaboration with the U.S.

Department of Defense (AFRRI and the USUHS) and was funded by NIAID as part

The initial funding

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

During June 2021, we received

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

The amount received is due to be repaid on

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

Discussions with the EIB regarding

a potential restructuring of the EIB Loan, including a possible extension of its maturity date are in progress.

However, there is no

certainty as to the outcome of these discussions.

As of September 30, 2025, the interest accrued was in the amount of approximately €3.5

In addition to the interest payable, the EIB is also entitled to royalty payments, pro-rated to the amount disbursed from the

EIB loan, on our consolidated revenues beginning in the fiscal year 2024 up to and including fiscal year 2030, in an amount equal to

up to 2.3% of our consolidated revenues below $350 million, 1.2% of our consolidated revenues between $350 million and $500 million,

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

As of September 30, 2025, we had an accrued royalty in the amount of $15

Since the initial funding period under the EIB Finance Agreement ended on December 31, 2022, we do not expect to receive additional

funds pursuant to the EIB Finance Agreement.

July 11, 2023, we signed a three-year $4.2 million contract with the NIAID, which is part of the National Institute of Health (“NIH”).

We will collaborate with the U.S.

Department of Defense’s Armed Forces Radiobiology Research Institute and the Uniformed Services

University of Health Sciences to further advance the development of our PLX-R18 cell therapy as a potential novel treatment for H-ARS.

H-ARS is a deadly disease that can result from nuclear disasters and radiation exposure.

The term of this contract was from July

1, 2023 through June 30, 2024, with an optional extension for an additional two-year period.

On June 6, 2024, the NIAID

exercised its option for year two of the three-year $4.2 million contract.

During the 12 months period from July 1, 2024, through June

30, 2025, the NIAID was planned to provide us with $1.4 million to manufacture the PLX-R18 cell therapy and to conduct both in vitro and

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

On April 15, 2025, we

received formal notice of termination from the NIAID.

According to the notice of termination, the contract was terminated for the Government’s

convenience and such termination was effective as of April 15, 2025.

As of March 31, 2025, we have received from the NIAID approximately

$2.16 million and as of March 31, 2025, we expect to receive an additional amount of approximately $75 thousand for activities conducted

by that date.

We believe that the termination of the contract may reflect broader federal budgetary and administrative adjustments that

have recently affected multiple health-related agencies, including the NIH.

On February 13, 2024, we entered

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

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

As of May 13, 2025, we have sold an aggregate of 42,729 common shares pursuant to the Sales Agreement at an average price of $5.93 per

On January 23, 2025, we entered

into the Securities Purchase Agreement with the Investor, relating to the offering of:

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

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

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

On April 25, 2025, we entered

into an amendment to the Securities Purchase Agreement, pursuant to which we and the Investor agreed to exchange 976,139 of the common

shares for additional Pre-Funded Warrants to purchase up to 976,139 common shares.

The Offering price per share and accompanying warrant

The Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable at any time following the receipt certain

approvals from our shareholders, required by the applicable rules of the Nasdaq Capital Market, and until exercised in full.

Warrants have an exercise price of $5.568 per share, will not be exercisable until we receive approval from our shareholders, and will

be exercisable for three years following the date of receipt of such approval.

The Pre-Funded Warrants and Common Warrants contain customary

anti-dilution provisions and are subject to a 19.99% beneficial ownership limitation until approval from our shareholders is obtained.

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

customary indemnification rights and obligations of the parties.

Under the terms of the Securities

Purchase Agreement, we appointed Mr.

Weinstein to our Board, effective February 5, 2025, and agreed to recommend his election to our shareholders

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

The gross proceeds from the

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

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

On January 23, 2025, the Company entered into the Term Sheet for the

purchase of certain shares representing approximately 71% of the equity of Kokomodo (on a fully diluted basis), for an aggregate purchase

price of $4.5 million, payable in Common Shares of the Company.

Following the execution of the Term Sheet, on March 13, 2025, the Purchaser

entered into the Share Purchase Agreement, effective as of March 12, 2025, with the Seller, pursuant to which, on April 28, 2025, the

Seller (i) sold to the Purchaser 400,000 ordinary shares and 175,000 preferred seed-1 shares, representing approximately 71% of the equity

of Kokomodo (on a fully diluted basis), and (ii) transferred, assigned and conveyed in favor of the Purchaser a convertible loan, pursuant

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

In consideration for the sale,

transfer and conveyance of the Purchased Interests, the Company paid the Seller an aggregate purchase price of $4.5 million, which was

paid in 976,139 common shares of the Company.

Company also executed leak-out agreements (the “Leak-Out Agreement”), pursuant to which the Seller agreed to sell, dispose

or otherwise transfer the Consideration Shares on the Nasdaq Capital Market or the Tel Aviv Stock Exchange, subject to certain limitations

and restrictions for a period commencing on the date of closing of the Kokomodo Transaction and ending on the earlier of (i) 36 months,

(ii) the time when the Seller holder holds less than 10% of the outstanding shares of the Company or (iii) the occurrence of a breach

of the Company’s commitment to register the Consideration Shares under the Securities Act of 1933, as amended.

On April 28, 2025, we completed

the Kokomodo Transaction, Kokomodo will continue to operate as an independent company and a majority owned subsidiary of our Company.

On February 3, 2025, we entered

into the Additional Securities Purchase Agreement, with Merchant Adventure Fund L.P., an existing investor of the Company, relating to

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

(i) 759,219 of our common shares, par value $0.00001 per share,

and (ii) warrants, to purchase up to 45,553 common shares.

The Second Offering price per share and accompanying warrant is $4.61.

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

19, 2025, the Second Offering closed and the Company received gross proceeds in the amount of $3.5 million, which it intends to use for

working capital and general corporate purposes.

exercised its option for year two of the three-year contract.

During the 12 months period from July 1, 2024 through June 30, 2025, the

NIAID was to provide us with $1.4 million to manufacture the PLX-R18 cell therapy and to conduct both in vitro and in vivo studies to

develop PLX-R18 as a potential novel treatment for hematopoietic complications of the H-ARS.

On April 15, 2025, Pluri Biotech

received a formal notice of termination from the NIAID, according to which, the contract was terminated for the Government’s convenience,

and such termination was effective as of April 15, 2025.

We believe that the termination of the contract may reflect broader federal budgetary

and administrative adjustments that have affected multiple health-related agencies, including the NIH.

As of the date of this Quarterly

Report, we received a total of $2.3 million in funding under the contract.

Non-dilutive grants

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In the absence of such sales, no payment

Through March 31, 2025, total grants obtained from the IIA, which are bearing royalties, aggregated to approximately $27.7

million and total royalties paid and accrued amounted to $179 thousand.

In June 2020, we announced

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

CRISPR-IL brings together the leading experts

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

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

and aquaculture industries.

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

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

During October 2021, we received approval for an

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

eighteen months.

During January 2023, we received approval for extension of additional two months to finish the program by June 30, 2023.

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

Through March 31, 2025, we

received total grants of approximately $1 million in cash from the IIA pursuant to the CRISPR-IL consortium program, and we do not expect

to receive any additional funds.

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

paid and accrued amounted to $179 thousand.

The IIA may impose certain

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

manufacturing out of Israel.

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

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

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

On October 28, 2024, we announced

that the IIA will fund our collaboration with Bar-Ilan University Research and Development Company Ltd.

(“BIRAD”), the commercial

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

This collaboration is focused on advancing

innovative allogeneic cell therapies targeting solid tumors and other indications.

The IIA is funding our collaboration with BIRAD for

the first year, with an approved budget of approximately $148,000 allocated to us.

The agreement includes an option for additional funding

for a second year.

The primary objective is to integrate both technologies effectively and progress to preclinical studies.

program does not require royalty payment.

As of March 31, 2025, we received approximately $29,000 from the IIA for this project.

(“BIRAD”), to support

the continued development of MAIT cells for the treatment of solid tumors.

As part of this collaboration, novel Chimeric Switch Receptors,

developed by Prof.

Cohen, head of laboratory of tumor immunology and immunotherapy at Bar-Ilan University, will be integrated into our

CAR-MAIT cell therapy platform to enhance tumor specificity and therapeutic efficacy.

The collaboration leverages our proprietary MAIT

cell technology alongside BIRAD’s expertise in engineering clinically optimized T-cell modification vectors.

The IIA has committed

to fund the collaboration for an initial term of one year, with an option to extend it for an additional year, subject to the IIA’s

During October 2025, we received approval for an additional month to finish the program until November 30, 2025.

approved budget for the first year is NIS 549,067 (approximately $166,000).

EU grants - Horizon 2020 and Horizon Europe

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for Osteoarthritis (“PROTO”), an international collaboration led by Charité Berlin Institute of Health Center for Regenerative

The goal of the PROTO project is to utilize our PLX-PAD cells in a Phase I/II study for the treatment of mild to moderate knee

osteoarthritis.

Therapies (“Charité”).

The goal of the PROTO project is to utilize our PLX-PAD cells in a Phase I/II study for the

treatment of mild to moderate knee osteoarthritis.

An amount of approximately

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

As of March 31, 2025, we received a payment of

approximately $330,000 in cash as part of the PROTO program.

The clinical study, once approved

by the regulatory agencies, will be carried out by Charité, together with us and other members of the international consortium,

under the leadership of Professor Tobias Winkler, Principal Investigator, at the Berlin Institute of Health Center of Regenerative Therapies,

Julius Wolff Institute and Center for Musculoskeletal Surgery.

We have an effective Form

S-3 registration statement (File No.

333-273347), filed under the Securities Act with the U.S.

Securities and Exchange Commission (the

“SEC”), using a “shelf” registration process.

Under this shelf registration process, we may, from time to time,

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

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

Through September 30, 2025, we received a payment

of approximately $330,000 in cash as part of the PROTO program.

In June 2025, the clinical

study was approved by the Paul-Ehrlich-Institut.

The study is conducted at Charité, together with an international consortium

and under the leadership of Professor Tobias Winkler, Principal Investigator, at the Berlin Institute of Health Center of Regenerative

Therapies, Julius Wolff Institute and Center for Musculoskeletal Surgery.

The currency of our financial

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other than the U.S.

For more information, please see Item 7A.

- “Quantitative and Qualitative Disclosures about Market Risk”

in the 2024 Annual Report.

Since our inception in May

2001, we have accumulated a deficit of approximately $435,457,000.

We do not anticipate generating significant revenue from product sales

over the next twelve months.

However, we expect to generate revenue from CDMO services, collaborations related to our cell-based products,

and licensing of our technologies and products.

While we have made meaningful progress in reducing our burn rate in recent years, it is

unlikely that near-term revenues will exceed our operating costs.

We may need to secure additional

sources of liquidity to support the commercialization of our products and technologies, as well as to sustain our ongoing R&D activities.

We continuously seek funding

through various channels, including strategic collaborations with other companies via licensing agreements, joint ventures, and partnerships.

We also pursue non-dilutive funding sources such as research grants, including those from the IIA and the European Union, as well as potential

proceeds from the sale of our securities.

We believe our existing resources

will be sufficient to support our operations for at least the next twelve months.

We have accumulated a deficit

of $448,905,000 since our inception in May 2001.

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

next twelve months.

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

will exceed our operating costs.

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

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

of September 30, 2025, our cash balances (cash and cash equivalents, short-term bank deposits, restricted cash and restricted bank deposits)

totaled $16,393,000.

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

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

expenditures, which include a cost-reduction plan.

Our ability to successfully

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

or other commercial, partnerships and collaboration agreements, (3) provide CDMO services to clients, (4) enter into agreement with the

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

are no assurances, however, that we will be successful in obtaining an adequate level of financing needed for the long-term development

and commercialization of our products, or any financing at all.

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

our operations may need to be scaled down or discontinued.

According to our management’s

estimates, we do not have sufficient resources to meet our operating obligations for at least twelve months from the issuance date of

our interim unaudited condensed consolidated financial statements, which was November 12, 2025.

These conditions raise substantial doubt

about our ability to continue as a going concern.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis