FinanceLooker

Excrept from filing document 2025-06-30

State the aggregate market value of the voting and non voting common equity held by non affiliates computed by reference to the price at which the common equity was last sold or the average bid and asked prices of such common equity as of the last business day of the registrant s most recently completed second fiscal quarter
As used in this Annual Report unless the context otherwise requires the terms Pluri the Company we us and our refer to Pluri Inc together with its wholly owned Israeli subsidiary Pluri Biotech Ltd and the subsidiaries of Pluri Biotech Ltd including its wholly owned Israeli subsidiary Coffeesai Ltd Coffeesai its majority owned Israeli subsidiaries Kokomodo Ltd Kokomodo and Ever After Foods Ltd Ever After Foods and its wholly owned German subsidiary Pluristem GmbH collectively the Subsidiaries
The statements contained in this Annual Report that are not historical facts are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws Such forward looking statements may be identified by among other things the use of forward looking terminology such as believes intends plans expects may will should or anticipates or the negative thereof or other variations thereon or comparable terminology and similar expressions are intended to identify forward looking statements We remind readers that forward looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results performance levels of activity or our achievements or industry results to be materially different from any future results performance levels of activity or our achievements or industry results expressed or implied by such forward looking statements Such forward looking statements appear in Item 1 Business and Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations especially in the section titled Outlook as well as elsewhere in this Annual Report and include among other statements statements regarding the following
The factors discussed herein including those risks described in Item 1A Risk Factors and expressed from time to time in our filings with the Securities and Exchange Commission the SEC could cause actual results and developments to be materially different from those expressed in or implied by such statements Our business and operations are subject to substantial risks which increase the uncertainty inherent in the forward looking statement contained in this Annual Report In addition historic results of scientific research and development R D clinical and preclinical trials do not guarantee that the conclusions of future R D or trials would not suggest different conclusions Also historic results referred to in this Annual Report would be interpreted differently in light of additional R D clinical and preclinical trials results The forward looking statements are made only as of the date of this filing and except as required by law we undertake no obligation to publicly update such forward looking statements to reflect subsequent events or circumstances
We are a biotechnology company leveraging our proprietary cell expansion platform to develop scalable cell based solutions across the healthcare food and agriculture sectors Through a collaborative network of ventures we are advancing a diverse pipeline of products and services including cultivated food regenerative medicine and cell based ingredients We have developed a unique three dimensional 3D technology platform for cell expansion with an industrial scale cell manufacturing facility operated in accordance with Good Manufacturing Practice GMP standards currently on a self declared basis We are utilizing our technology across the fields of regenerative medicine immunotherapy food tech CDMO and AgTech and plan to utilize it in industries and verticals that have a need for our mass scale and cost effective cell expansion platform via partnerships joint ventures licensing agreements and other types of collaborations
We were incorporated in Nevada on May 11 2001 Pluri Inc has a wholly owned subsidiary Pluri Biotech Ltd Pluri Biotech which is incorporated under the laws of the State of Israel In January 2020 Pluri Biotech established a wholly owned subsidiary Pluristem GmbH which is incorporated under the laws of Germany
PLX cells Our PLX cells are adherent stromal cells that are expanded using our 3D platform Our PLX cells can be administered to patients off the shelf without blood or tissue matching or additional manipulation prior to administration PLX cells are believed to release a range of therapeutic proteins in response to the patient s condition
In the pharmaceutical area we have focused on several indications utilizing our product candidates including but not limited to muscle recovery following surgery for hip fracture incomplete recovery following bone marrow transplantation critical limb ischemia CLI 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 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 allogenic universal product Benefiting with very restricted T cell receptor TCR the MAIT cells minimize their likelihood of inducing GvHD a significant advantage over other potential allogeneic products We are aiming to design the MAIT to potentially show better persistence in the body for a longer duration enhancing their therapeutic efficacy
In January 2024 we launched a new business division offering cell therapy manufacturing services as a CDMO PluriCDMO PluriCDMO 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
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 impact 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 In parallel Coffeesai is exploring research and development collaborations aimed at accelerating development and commercialization with leading global coffee suppliers A third party techno economic assessment has confirmed the cost competitiveness of the platform at scale supporting its commercial viability
On 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
In 2022 we announced the establishment of a joint venture with Tnuva Ever After Foods incorporated under the laws of the State of Israel The purpose of the venture is to develop and commercialize scalable production technologies for cultivated meat supporting the development of a wide range of cultivated meat products by industry partners
Leveraging Pluri s innovative technology Ever After Foods has rapidly advanced its scalable production platform developing a business to business B2B version of its proprietary technology system Ever After Foods has demonstrated the natural production of muscle and fat tissues for various animal cells ensuring taste feel and texture akin to conventional animal derived meat
In June 2024 we entered into a share purchase agreement the 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 the Offering for aggregate gross proceeds of 10 million As part of the Offering we invested 1 25 million In addition Pluri Biotech and Ever After Foods executed an Amended and Restated Technology License Agreement dated June 12 2024 the Amended License The Amended License amended the parties existing license agreement dated as of February 23 2022 to expand the scope of the license to include fish and seafood
Cell therapy is an established field within the regenerative medicine area The characteristics and properties of cells vary as a function of tissue source and growth conditions The human placenta the source of our PLX and MAIT cells provides a unique reservoir of stromal and immune cells representing a groundbreaking approach in the field of cell therapy
PLX cells are placenta derived mesenchymal like adherent stromal cells that are expanded ex vivo The diverse factors released by PLX cells indicate their potential therapeutic use across a range of ischemic inflammatory autoimmune and hematological conditions Placental MAIT cells are potent effector cells potentially targeting tumors through multiple mechanisms while expressing high levels of various chemokine receptors which facilitate their migration directly to tumor sites Furthermore unlike conventional autologous T cells typically collected from peripheral blood our MAIT cells are designed to be allogenic universal product Benefiting with very restricted TCR the MAIT cells minimize their likelihood of inducing GvHD a significant advantage over other potential allogeneic products
Our patented and validated 3D cell expansion platform is a state of the art system designed to enable novel cell based solutions It delivers high accuracy scalability cost efficiency and consistent batch to batch performance The platform is currently being applied in regenerative medicine FoodTech AgTech and CDMO
Our system utilizes a synthetic scaffold to create a 3D environment where adherent or non adherent cells can grow in a tissue like environment Our automated proprietary 3D GMP approved process enables the large scale monitored and controlled production of reproducible high quality cell products and in mass quantities Additionally our current manufacturing process which has scaled up over the years has demonstrated batch to batch consistency an important manufacturing challenge for biological products
MAIT cells are a distinct type of unconventional immune T cells Their unique characteristics including robust cytotoxic activity and low alloreactivity profile make them promising candidates for engineering and subsequent use in the treatment of solid tumors in the setting of allogeneic adoptive cell therapy
We believe that leveraging the placenta as a unique source of cells combined with our cutting edge research development and established high quality manufacturing capabilities will serve as the driving force towards the successful development of a broader range of cell therapy products and applications
PLX PAD was tested as a treatment for several indications acute muscle injuries following hip fracture acute respiratory distress syndrome due to Coronavirus Disease COVID 19 GvHD and peripheral artery disease including intermittent claudication and critical limb ischemia CLI All clinical studies were completed
In addition PLX PAD is being developed for the treatment of mild to moderate knee osteoarthritis as part of the Advanced PeRsOnalized Therapies for Osteoarthritis PROTO program an international collaboration led by Charité Berlin Institute of Health Center for Regenerative Therapies Charité In June 2025 the clinical study was approved by the Paul Ehrlich Institut PEI and the clinical study will be carried out by the Charité
Acute Radiation Syndrome On July 11 2023 we signed a three year 4 2 million contract with the NIAID which is part of the NIH Pluri will collaborate with the U S Department of Defense s DoD s AFRRI and the USUHS to further advance the development of its 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 On June 6 2024 NIAID exercised its option for year two of the three year 4 2 million contract
Prior to signing the contract with NIAID we conducted several animal studies for the evaluation of PLX R18 for the treatment of ARS in collaboration with NIAID and DoD Armed Forces Radiobiology Research Institute part of the USUHS On April 15 2025 we received formal notice from NIAID that the contract was being terminated for Government s convenience effective from the date of the notice We believe that the termination reflects broader federal budgetary and administrative adjustments that have affected various health related agencies including the NIH The termination was not related to any performance issues on our part and we received the funding for activities conducted up to the effective date
On January 8 2022 we entered into a definitive license agreement with Takeda Pharmaceuticals International AG Takeda a company based in Switzerland which operates in the field of adipose derived cells pursuant to which we granted Takeda a global non exclusive license to use several of our patents EP2591789 and EP3103463 limited to adipose fat cells only in the field of therapeutics in exchange for Takeda ceasing its opposition with regards to said patents and paying us a lump sum of 200 000 The license covers methods for expanding adherent stromal cells and specified second medical uses
On January 10 2022 we entered into a definitive license agreement with Novadip Biosciences Novadip a company based in Belgium which operates in the field of adipose derived stem cells for cell therapy and cell free therapy in respect of medical or cosmetic conditions under which we granted Novadip a global non exclusive royalty free license to use two of our patents EP2591789 EP3103463 limited to non placental cells and cell derived therapies sub licensable only to Novadip s customers
On December 20 2023 we entered into an agreement assigning the joint patent rights to develop Pluri s PLX cells in the treatment of cocaine addiction to Bar Ilan University Research and Development Company Ltd BIRAD the commercial arm of Bar Ilan University Under the agreement Bar Ilan University via BIRAD will receive the right to further develop and commercialize PLX cells as a cocaine anti addiction product and Pluri is entitled to 20 revenue sharing from future sales of the product for anti addiction
In March 2025 we entered into an exclusive collaboration agreement with Hemafund a Ukrainian umbilical cord blood bank with clinical and research laboratories and facilities specializing in cell preservation and cryostorage The collaboration aims to establish a strategic initiative for e stockpiling local distribution and potential clinical advancement of our PLX R18 cell therapy as a countermeasure for Hematopoietic Acute Radiation Syndrome or H ARS in Ukraine
Our cell therapy development strategy is to hold open and frequent discussions with regulators at all stages of development from preclinical studies to more advanced regulatory stages We utilize this strategy in working with the FDA the European Medicines Agency EMA Germany s PEI as well as other European national competent authorities the Israeli Minister of Health MOH Japan s Pharmaceuticals and Medical Devices Agency PMDA and also the Ministry of Food and Drug Safety MFDS of South Korea
Ever After Foods is engaged in the development and commercialization of innovative cultivated meat products leveraging proprietary technology and expertise to create sustainable high quality meat alternatives and to facilitate the production of cultivated meat and fish products by providing the necessary technological infrastructure and support
In February 2025 Ever After Foods announced entering into a strategic collaboration with Bühler Group Bühler a leading global provider of food processing technologies to jointly advance scalable cultivated meat production systems The collaboration aims to combine Bühler s engineering and market access capabilities with Ever After Foods proprietary edible packed bed EPB bioreactor platform to deliver commercial scale cultivated meat production systems specifically designed for the food industry The parties intend to develop and deploy manufacturing equipment that enables food producers to efficiently produce cultivated meat at significantly reduced cost and at volumes suitable for market entry The joint effort reflects a shared focus on addressing global food security challenges and supporting the sustainable transition of protein systems Under the collaboration Ever After Foods and Bühler plan to accelerate commercial availability of tailored production systems that can support industry wide adoption of cultivated meat technologies
In October 2023 we entered into a POC collaboration with ICL a global specialty minerals company through its Open Innovation program to evaluate the potential of our technology for enhancing the delivery of biostimulants in agriculture The initial phase of the collaboration focused on exploring the use of plant derived bioactive compounds in combination with our proprietary platform to improve crop resilience and yield under abiotic stress conditions In December 2024 we signed an agreement to extend the collaboration with ICL which reflects a continued mutual interest in further developing and validating the underlying technology for agricultural applications
In March 2024 we announced an important expansion to our intellectual property IP portfolio with a new patent approval from the Israel Patent Office IPO 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
In July 2024 we announced the signing of a 1 million POC agreement with a leading international agriculture corporation The collaboration which remains ongoing is focused on enhancing global sustainable vegetable production improving supply chain efficiency and addressing climate related challenges This initiative aims to support a more resilient and environmentally sustainable agricultural system through natural innovation driven solutions
We are the sole owner of 193 issued patents and approximately 55 pending patent applications in the United States Europe China Japan and Israel as well as in additional countries worldwide including countries in the Far East and South America in calculating the number of issued patents each European patent validated in multiple jurisdictions was counted as a single patent
Based on the well established understanding that the characteristics and therapeutic potential of a cell product are largely determined by their source the methods and conditions used during their culture our patent portfolio includes various types of claims that protect the unique aspects of our technology
Through our development of adherent stromal cell based products we have built expertise and proprietary know how establishing robust procedures for the manufacturing of clinical grade PLX cells in our facilities Leveraging this foundation we have expanded our capabilities to include the handling and expansion of suspension cells including immune cells thereby broadening our platform in cellular therapies Certain elements of our manufacturing process are protected by issued patents and pending applications In parallel we safeguard proprietary aspects of our technology trade secrets and know how maintained through confidentiality agreements with our employees consultants contractors manufacturers and advisors These agreements typically include provisions to protect confidential information restrict material use and require the assignment of inventions developed in the course of such engagement
The following table outlines our key patents and patent applications It is not intended to represent a legal assessment of claims scope enforceability or limitations In certain instances a jurisdiction may appear under both pending and granted status within a single patent family reflecting the existence of continuation or divisional applications filed in parallel with a granted patent
The expiration dates of these patents based on filing dates range from 2027 to 2044 Actual expiration dates will be determined according to extensions received based on the Drug Price Competition and Patent Term Restoration Act of 1984 P L 98 417 commonly known as the Hatch Waxman Act which permits extensions of pharmaceutical patents to reflect regulatory delays encountered in obtaining FDA market approval The Hatch Waxman Act is based on a U S federal law and therefore only relevant to U S patents
There is a risk that our patents will be invalidated and that our pending patent applications will not result in issued patents We also cannot be certain that we will not infringe on any patents that may be issued to others See Risk Factors The patent approval process is complex and we cannot be sure that our pending patent applications or future patent applications will be approved
In April 2020 we and our subsidiaries Pluri Biotech and Pluristem GmbH executed a finance agreement with EIB the EIB Finance Agreement for non dilutive funding of up to 50 million in the aggregate payable in three tranches the EIB Loan The proceeds from the EIB Finance Agreement were intended to support our R D in the European Union to further advance our regenerative cell therapy platform and to bring the products in our pipeline to market The initial funding period under the agreement was three years commencing on January 1 2020
During June 2021 we received the first tranche in the amount of 20 million pursuant to the EIB Finance Agreement The amount received is due to be repaid on June 1 2026 and bears annual interest of 4 to be paid together with the principal of the loan We are currently in advanced discussions with the EIB regarding a potential restructuring of the terms of the EIB Loan which are currently focused on the new terms of the EIB Loan including an extension of the current maturity date of the EIB Loan However there is no certainty as to the outcome of these discussions As of June 30 2025 the interest accrued was in the amount of approximately 3 27 million In addition to the interest payable the EIB is also entitled to royalty payments pro rated to the amount disbursed from the EIB Loan on our consolidated revenues beginning in the fiscal year 2024 up to and including its fiscal year 2030 in an amount equal to up to 2 3 of our consolidated revenues below 350 million 1 2 of our consolidated revenues between 350 million and 500 million and 0 2 of our consolidated revenues exceeding 500 million As of June 30 2025 we had an accrued royalty in the amount of 12 thousand Since the initial funding period under the EIB Finance Agreement ended on December 31 2022 we do not expect to receive additional funds pursuant to the EIB Finance Agreement
In July 2007 we entered into a five year collaborative research agreement with the Charité which was extended from time to time through June 2027 We and Charité are collaborating on a variety of indications utilizing PLX cells According to the agreement we will be the exclusive owner of the technology and any products produced as a result of the collaboration Charité will receive between 1 to 2 royalties from net sales of new developments that have been achieved during the joint development
In August 2017 we announced that a pilot study of our PLX R18 cell therapy was initiated by the DoD The study examined the effectiveness of PLX R18 as a treatment for ARS prior to and within the first 24 hours of exposure to radiation In July 2019 we presented positive results from a series of studies of our PLX R18 cell therapy product conducted by the DoD
On July 11 2023 we signed a three year 4 2 million contract with the NIAID which is part of the NIH We agreed to collaborate with the U S DoD s AFRRI and USUHS to further advance the development of its 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 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 Annual Report we received a total of 2 3 million in funding under the contract
On September 6 2022 we announced that a 7 5 million non dilutive grant from the European Union or EU s Horizon program has been awarded to PROTO an international collaboration led by Charité The goal of the PROTO project is to utilize our PLX PAD cells for the treatment of mild to moderate knee osteoarthritis
In June 2025 the clinical study was approved by the PEI The study is being 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
In October 2023 we signed a POC collaboration with ICL through its Open Innovation program to pioneer advanced bioactive carriers and bio stimulants This partnership aims to leverage natural delivery mechanisms within plants boosting crop yields and fostering sustainability in agriculture In December 2024 we signed an agreement to extend this collaboration reflecting continued mutual interest in further developing and validating the underlying technology for agricultural applications
In July 2024 we announced the signing of a 1 million POC agreement with a leading international agriculture corporation the POC Party to enhance the global sustainable vegetable supply This strategic POC agreement is intended to boost the global vegetable product supply streamline supply chains and combat global climate change while ensuring a natural and more sustainable future for agriculture The result of the planned collaboration has the potential to minimize environmental impact and foster greater food security as well as to build a better agronomic and environmentally friendly infrastructure bringing sustainable high quality solutions to the market Pursuant to this POC agreement the POC Party will provide its know how and other IP rights related to vegetable products while the Company will provide its know how and other IP rights related to its proprietary 3D cell expansion technology to develop a solution aimed at increasing the global vegetable products supply
The POC Party is paying us in three installments the first installment was made upon the effective date of the POC agreement the second installment was paid following completion of Phase I of the POC and the POC Party s written decision to proceed to the next phase and the final installment will be payable upon completion of Phase II The POC Party may terminate the agreement with 14 days prior written notice following the conclusion of either Phase I or Phase II
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 Artificial Intelligence AI based on end to end genome editing solutions These next generation multi species genome editing products for human plant and animal DNA have applications in the pharma agriculture and aquaculture industries CRISPR IL was funded by the IIA with a total budget of approximately 10 000 000 of which an amount of approximately 480 000 was a direct grant allocated to us for an initial period of 18 months with a potential for extension of an additional 18 months with additional budget from the IIA
We maintain an in house capability for clinical cell manufacturing at our GMP grade facility in Haifa Israel operational since February 2013 and previously approved for the production of PLX PAD and PLX R18 for clinical use by multiple regulatory authorities including the FDA EMA MFDS PMDA and the MOH The facility was approved by the MOH for a Phase III PLX PAD trial and received GMP certification and manufacturer importer authorization which remained valid through March 2023 In addition the facility was inspected by a European Union Qualified Person in December 2024 confirming compliance with current GMP requirements for the purposes of the PROTO clinical trial
Since 2024 our CDMO has been working with pharmaceutical and biotech companies to offer manufacturing development and other services Based on over 15 years of experience in GMP manufacturing our highly skilled team and utilizing our proprietary technologies and flexible 4400 square meter purpose built facilities PluriCDMO can offer comprehensive manufacturing support from preclinical development through clinical trials to commercial supply
In the United States and the European Union the FDA and the EMA respectively must approve products prior to marketing Furthermore various governmental statutes and regulations also govern or influence testing manufacturing safety labeling storage and record keeping related to such products and their marketing Governments in other countries may have similar requirements for testing and marketing
The process of obtaining these approvals and the subsequent compliance with appropriate statutes and regulations require the expenditure of substantial time resources and money There can be no assurance that our product candidates will ultimately receive marketing approval or if approved will be reimbursed by public and private health insurance
In the United States our product candidates are subject to regulation as a biological product under the Public Health Service Act and the Federal Food Drug and Cosmetic Act The FDA regulating the approval of clinical studies and marketing applications in the United States generally requires the following steps prior to approving a new biological product for use either for clinical studies or for commercial sale
In the European Union our investigational cellular products are regulated under the Advanced Therapy Medicinal Products regulation a regulation specific to cell and tissue products Additionally as of January 31 2022 the Clinical Trials Regulation harmonizes the submission assessment and supervision processes of clinical trials in the European Union This European Union regulation requires
Typically in the United States as well as in the European Union clinical development involves a series of clinical studies from early small scale Phase I studies to late stage large Phase III studies although the phases may overlap Phase I clinical studies are conducted in a small number of healthy volunteers or patients with the disease or condition These studies are designed to provide information about product safety and dosage by gathering information on the interaction of the drug with the human body its side effects as well as early preliminary information on effectiveness
Phase II clinical studies are conducted in a homogenous group of patients afflicted with the specific target disease to explore preliminary efficacy optimal dosages and confirm the safety profile In some cases an initial study is conducted in patients to assess both preliminary efficacy and preliminary safety and patterns of drug metabolism and distribution in which case it is referred to as a Phase I II study Phase III clinical studies sometimes known as pivotal studies are generally large scale multi center controlled studies conducted with a heterogeneous group of patients afflicted with the target disease aiming to provide statistically significant support for efficacy as well as safety and potency The Phase III studies are considered confirmatory for establishing the efficacy and safety of the drug and are critical for approval In some circumstances a regulatory agency may require Phase IV or post marketing studies in case additional information needs to be collected after the drug is on the market
During all phases of clinical development regulatory agencies require extensive monitoring and auditing of all clinical activities clinical data and clinical study sites investigators to minimize risks and ensure high quality and integrity of the collected data The sponsor of a clinical study is required to submit an annual safety report to the relevant regulatory agencies in which serious adverse events are reported and to submit in an expedited manner any individual serious adverse events that are suspected of being related to the tested drug and are unexpected with its use An agency may at its discretion re evaluate alter suspend or terminate the clinical study based upon the data that have been accumulated to that point and its assessment of the risk benefit ratio to the patient
Regulators around the world are in the process of developing or implementing a regulatory approval process for cultivated meat Although some companies have recently received regulatory approval for their cultivated meat products in the United States Israel and Singapore cultivated meat is not yet generally commercially available However technologies like the one being developed by Ever After Foods are anticipated to facilitate the scaling up of cultivated meat production In general cultivated meat production is subject to extensive regulatory laws and regulations In the United States the FDA and the U S Department of Agriculture or USDA are in the process of developing guidance and regulations applicable to cultivated meat
In the cultivated plant based initiatives e g coffee cacao we are working with an external regulatory consultant to evaluate the technical and scientific requirements for determining whether our cultured coffee product is Generally Recognized as Safe or GRAS under section 201 s of the Federal Food Drug and Cosmetic Act or FDCA and FDA s implementing regulations 21 C F R 170 30 If the plant based cultivated products including all components are determined to be GRAS in accordance with U S FDA requirements it will be exempt from the definition of food additive in section 201 s of the FDCA and can therefore be lawfully marketed as a food in the United States without the need to obtain a premarket authorization from the FDA
The regenerative medicine field is characterized by intense competition as global and local pharma players are becoming more engaged in the cell therapy field based on the advancements made in clinical studies and due to the favorable regenerative medicine legislation in certain regions We face competition from both allogeneic and autologous cell therapy companies academic commercial and research institutions pharmaceutical companies biopharmaceutical companies and governmental agencies Some of the clinical indications we currently have under development are also being investigated in preclinical and clinical programs by others
According to the Alliance for Regenerative Medicine s July 2025 Report there were a total of 2 096 cell based therapies in development including 820 gene modified and cellular immunotherapies with 1 483 ongoing clinical trials registered globally of which 403 trials were in solid tumors Source ARM Report H1 2025
In the global market excluding China while most allogeneic cell therapies remain in the preclinical stage approximately 20 allogeneic Chimeric Antigen Receptor CAR T therapy products being studied for solid tumors have advanced into clinical stages Notable examples include Adicet Bio s allogeneic CD70 CAR gamma delta T cells Poseida s Allogenic MUC1 CAR Tscm cells Fate s allogeneic MICA B CAR T cells and MD Anderson s TROP2 CAR NK cells Source GlobalData Clinicaltrial gov
While there are hundreds of companies in the regenerative medicine space globally there are multiple participants in the cell therapy field based in the United States Europe Japan Korea and Australia Among other things we expect to compete based upon our IP portfolio our in house manufacturing efficiencies and capabilities and the potential efficacy of our products Our ability to compete successfully will depend on our continued ability to attract and retain experienced and skilled executives scientific and clinical development personnel to identify and develop viable cellular therapeutic candidates and exploit these products commercially and keep expanding and improving our unique technological capabilities
Ever After Foods operates in a competitive landscape that includes both consumer facing companies like Upside Foods Believer Meats and GOOD Meat as well as B2B players like Gelatex Esco Aster Ark Biotech GEA and more Unlike traditional technological production approaches that rely on adapting cells to grow in stirred tank bioreactors Ever After Foods has a unique proprietary technology that is optimized for natural cell growth This allows Ever After Foods to produce cultivated meat at a significantly lower cost and on a larger scale Ever After Foods unique technology combined with an experienced team and strategic partnerships with industry leaders provides us with a strong competitive advantage in the cultivated food market
The AgTech industry continues to evolve driven by advancements in biotechnology sustainability initiatives and the transformation of traditional farming practices into more efficient and environmentally responsible approaches Competitors in this domain include companies focused on plant cell culture for specialty ingredients such as California Cultured Inc and Ayana Bio LLC as well as established producers of plant derived compounds and flavors including DSM Firmenich AG and Givaudan International SA We believe that our competitive positioning is derived from our technology platform capabilities and our innovative developments We also believe that our ability to compete successfully will depend on our continued innovation the scalability of our production systems and the consistent improvement of our unique technological capabilities
As part of our AgTech operations we are currently advancing two principle product streams which are also referred herein collectively as our plant based vertical cell cultured coffee through Coffeesai and cell cultured cacao via Kokomodo both leveraging our shared technological foundation and competing in distinct markets with different dynamics Our proprietary 3D cell expansion platform originally developed by our biotechnology subsidiary Pluri Biotech enables efficient high volume and consistent cultivation of plant cells in controlled environments We believe that this platform provides meaningful advantages in scalability cost efficiency and product quality positioning us to address critical challenges in cellular agriculture that competitors often face in achieving industrial scale production
Coffeesai operates in the emerging field of cell cultured coffee which currently includes a limited number of participants such as California Cultured Inc Food Brewer AG Another Food Pte Ltd and Atomo Foods Inc each pursuing innovative approaches to sustainable coffee production Within this early stage competitive landscape we believe that Coffeesai differentiates itself through its integration of advanced scale up technology proprietary bioprocessing expertise and deep scientific know how all of which contribute to an efficient cost effective and sustainable production model These capabilities combined with potential partnerships across the coffee value chain may offer Coffeesai a strategic advantage in shaping the future of sustainable coffee
Our cacao business Kokomodo operates in a similarly dynamic and environment focused on cellular agriculture for cacao and cocoa derived ingredients Current participants in this space include Celleste Bio Ltd California Cultured Inc and Food Brewer AG all of which aim to develop alternatives to conventional cacao cultivation in response to growing concerns about climate impact supply volatility and ethical sourcing Kokomodo seeks to differentiate itself by leveraging the same advanced 3D cell expansion platform and bioprocess optimization strategies that underpin Coffeesai enabling the potential for consistent large scale production of high quality cacao ingredients We believe that this combination of technological innovation process efficiency and industrial scalability positions Kokomodo to play a significant role in the development of sustainable solutions for the global chocolate industry
We compete in the cell therapy CDMO services with several companies like Lonza Group AG AGC Biologics A S and Charles River Laboratories International Inc for outsourced services from development to manufacturing in biotechnology and pharmaceutical cell based products The majority of our competitors are large service providers with multiple offerings for different technologies range of dosage form capabilities and medicine products
Additional information about us is available on our website at www pluri biotech com Information contained on or accessible through our website is not incorporated by reference into and should not be considered part of this Annual Report Under the Financial Reports and SEC Filings subsections of the Investors section on our website our Annual Reports on Form 10 K Quarterly Reports on Form 10 Q Current Reports on Form 8 K and amendments to those reports filed or furnished pursuant to Section 13 a of the Securities Exchange Act of 1934 as amended or the Exchange Act are available as soon as reasonably practicable after we electronically file such material with or furnish it to the SEC Our reports filed with the SEC are also made available on the SEC s website at www sec gov The following Corporate Governance documents are also posted on our website under the Governance subsection of the Investors section Trading Policy Code of Business Conduct and Ethics Anti Bribery and Corruption and Anti Money Laundering and Terrorist Financing Compliance Policy Clawback Policy and the Charters for each of the Committees of our Board of Directors the Board
An investment in our securities involves a high degree of risk You should consider carefully the following information about these risks together with the other information contained in this Annual Report before making an investment decision Our business prospects financial condition and results of operations may be materially and adversely affected as a result of any of the following risks The value of our securities could decline as a result of any of these risks You could lose all or part of your investment in our securities Some of the statements in Item 1A Risk Factors are forward looking statements The following risk factors are not the only risk factors facing our Company Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business prospects financial condition and results of operations
Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements included in this Annual Report The financial statements have been prepared under the assumption that we will continue as a going concern and do not include any adjustments that might result if we are unable to continue as a going concern
As indicated in the independent auditor s report for the fiscal year ended June 30 2025 the accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern Our recurring operating losses and negative cash flow raise substantial doubt about our ability to continue as a going concern The financial statements do not include any adjustments that might result from the outcome of this uncertainty
As of June 30 2025 our cash balances cash and cash equivalents short term bank deposits restricted cash and restricted bank deposits totaled to 21 914 000 According to management estimates we do not have sufficient resources to meet our operating obligations for at least twelve months from the issuance date of the consolidated financial statements To sustain operations beyond this period we will require additional capital to sustain operations There can be no assurance that such financing will be available on favorable terms or at all
We may need to raise additional financing to support the research development and manufacturing of our cell based products in the future but we cannot be sure we will be able to obtain additional financing on terms favorable to us when needed If we are unable to obtain additional financing to meet our needs our operations may be adversely affected or terminated
It is likely that we will need to raise additional funds in the future in order to satisfy our working capital and capital expenditure requirements Therefore we are dependent on our ability to sell our common shares for funds receive grants enter into collaborations and licensing deals or to otherwise raise capital Any sale of our common shares in the future could result in dilution to existing shareholders and could adversely affect the market price of our common shares
Our likelihood of profitability depends on our ability to license and or develop and commercialize our products based on our technology which is currently in the development stage If we are unable to complete the development and commercialization of our cell based products successfully or are unable to obtain the necessary regulatory approvals our likelihood of profitability will be limited severely
We are engaged in the business of developing cell based products We have not realized a profit from our operations to date and there is little likelihood that we will realize any profits in the short or medium term Any profitability in the future from our business will be dependent upon successful commercialization of our cell based products and or licensing of our products which will require additional research and development
Even after granting regulatory approval the FDA the EMA and regulatory agencies in other countries continue to regulate marketed products manufacturers and manufacturing facilities which may create additional regulatory barriers and burdens Later discovery of previously unknown problems with a product manufacturer or facility may result in restrictions on the product or manufacturer including a withdrawal of the product from the market
We have a limited operating history in our business of commercializing cell based products and cell technology and we have not generated material revenues to date It is not clear whether we will generate material revenues or whether we will generate material revenues in the future We cannot give assurances that we will be able to generate any significant revenues or income in the future There is no assurance that we will ever be profitable
On April 30 2020 we and our subsidiaries Pluri Biotech Ltd and Pluristem GmbH entered into the EIB Finance Agreement for a loan in the amount of up to 50 million in the aggregate subject to certain milestones being reached receivable in three tranches During June 2021 we received the first tranche in the amount of 20 million The amount received is due to be repaid on June 1 2026 and bears annual interest of 4 to be paid together with the principal amount of the loan As of June 30 2025 the interest accrued was in the amount of approximately 3 27 million In addition to the interest payable the EIB is also entitled to royalty payments pro rated to the amount disbursed from the EIB Loan on our consolidated revenues beginning in the fiscal year 2024 up to and including its fiscal year 2030 in an amount equal to up to 2 3 of our consolidated revenues below 350 million 1 2 of our consolidated revenues between 350 million and 500 million and 0 2 of our consolidated revenues exceeding 500 million As of June 30 2025 we had an accrued royalty in the amount of 12 thousand
We are currently in advanced discussions with the EIB regarding a potential restructuring of the terms of the EIB Loan which are currently focused on the new terms of the EIB Loan including an extension of the current maturity date of the EIB Loan However there is no certainty as to the outcome of these discussions
To date we have focused our efforts primarily in the regenerative medicine field in the food tech field in the CDMO field and in the agriculture field but we may seek partners for licensing deals joint ventures partnerships and direct sale of our products or use of our technology in various industries Licensing deals joint ventures and partnerships in new fields involve numerous risks including the potential integration of our technology and products in various new ways which may or may not be successful Such projects may require significant funds time and attention from management and other key personnel In addition as we do not have experience in areas outside of the regenerative medicine field and limited experience in the food tech CDMO and agriculture fields we may lack the personnel to properly lead such initiatives There can be no assurance that we will be successful in finding the relevant partners to fund and market our cell based products
Our business involves the importation of certain raw materials components and finished goods essential for our cell expansion platform and related applications Changes in U S trade policy including the imposition of new tariffs or modifications to existing trade agreements could affect our supply chain increase costs and impact our financial performance For the year ended June 30 2025 we estimate that the impact of tariffs currently imposed on our imports was not material However we are unable to estimate the impacts of any future tariffs that may be enacted While we actively monitor trade developments and assess potential impacts the evolving nature of trade policies makes it challenging to predict the full extent of these effects We may not be able to mitigate all adverse consequences which could include increased production costs delays in product development or reduced margins
Even if any clinical trial that we need to undertake is completed as planned or if interim results from existing clinical trials are released we cannot be certain that such results will support our product candidates claims or any new indications that we may seek for our products or that the FDA or foreign authorities will agree with our conclusions regarding the results of those trials The clinical trial process may fail to demonstrate that our products or a product candidate is safe and effective for the proposed indicated use which could cause us to stop seeking additional clearances or approvals for our product candidates Any delay or termination of our clinical trials will delay the filing of our regulatory submissions and ultimately our ability to commercialize a product candidate It is also possible that patients enrolled in clinical trials will experience adverse side effects that are not currently part of the product candidate s profile
PLX cells have been administered as part of compassionate use treatments which permit the administration of the PLX cells outside of clinical trials No assurance can be given that any positive results are attributable to the PLX cells or that administration of PLX cells to other patients will have positive results Compassionate use is a term that is used to refer to the use of an investigational drug outside of a clinical trial to treat a patient with a serious or immediately life threatening disease or condition who has no comparable or satisfactory alternative treatment options Regulators often allow compassionate use on a case by case basis for an individual patient or for defined groups of patients with similar treatment needs
Success in early clinical trials does not ensure that later clinical trials will be successful and initial results from a clinical trial do not necessarily predict final results While results from treating patients through compassionate use have in certain cases been successful we cannot be assured that further trials will ultimately be successful Results of further clinical trials may be disappointing
Even if early stage clinical trials are successful we may need to conduct additional clinical trials for product candidates with patients receiving the drug for longer periods before we are able to seek approvals to market and sell these product candidates from the FDA and regulatory authorities outside the United States Even if we are able to obtain approval for our product candidates through an accelerated approval review program we may still be required to conduct clinical trials after such an approval If we are not successful in commercializing any of our lead product candidates or are significantly delayed in doing so our business will be materially harmed
We are subject to the risks of failure inherent in the development of products based on new technologies The novel nature of our therapeutics creates significant challenges in regard to product development and optimization manufacturing government regulation third party reimbursement and market acceptance For example the FDA the EMA and other countries regulatory authorities have relatively limited experience with cell therapies Very few cell therapy products have been approved by regulatory authorities to date for commercial sale and the pathway to regulatory approval for our cell therapy product candidates may accordingly be more complex and lengthier As a result the development and commercialization pathway for our therapies may be subject to increased uncertainty as compared to the pathway for new conventional drugs
Even if we successfully develop and obtain regulatory approval for our cell therapy candidates the market may not understand or accept them We are developing cell therapy product candidates that represent novel treatments and will compete with a number of more conventional products and therapies manufactured and marketed by others including major pharmaceutical companies The degree of market acceptance of any of our developed and potential products will depend on a number of factors including
Interim top line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available or as additional analyses are conducted and as the data are subject to audit and verification procedures which could result in material changes in the final data
From time to time we may publish interim top line or preliminary data from our clinical studies Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available Preliminary or top line data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published As a result interim and preliminary data should be viewed with caution until the final data are available Material adverse changes between preliminary top line or interim data and final data could significantly harm our business prospects
Ever After Foods business prospects are difficult to predict due to its lack of operational history in the new and emerging food tech field and its success will be dependent on its ability to meet a number of challenges Because it has a limited operating history in the field of cultivated meat and it is in the early stages of development Ever After Foods may not be able to evaluate its future prospects accurately Ever After Foods prospects will be primarily dependent on its ability to successfully develop industrial scale cultivated meat technologies and processes and market these to its potential customers If Ever After Foods is not able to successfully meet these challenges its prospects business financial condition and results of operations could be adversely impacted
In addition Ever After Foods will be subject to changing laws rules and regulations in the United States Israeli Asia Pacific the European Union and other jurisdictions relating to the food tech industry Such laws and regulations may negatively impact its ability to expand its business and pursue business opportunities Ever After Foods may also incur significant expenses to comply with the laws regulations and other obligations that will apply to it
Ever After Foods does not currently have any products or technologies approved for sale and it is still in the early stages of development To date Ever After Foods has limited data on the ability of our and its technologies to successfully manufacture cultivated meat towards which they have devoted substantial resources to date Ever After Foods current technologies are in large part based on our technologies and IP It may not be successful in developing its technologies in a manner sufficient to support its expected scale ups and future growth or at all Ever After Foods expects that a substantial portion of its efforts and expenditures over the next few years will be devoted to the development of technologies designed to enable Ever After Foods to market industrial scale cultivated meat manufacturing processes Ever After Foods cannot guarantee that it will be successful in developing these technologies based on its current roadmap or at all If Ever After Foods is able to successfully develop its cultivated meat technologies it cannot ensure that it will obtain regulatory approval or that following approval upon commercialization its technologies will achieve market acceptance Any such delay or failure could materially and adversely affect Ever After Foods financial condition results of operations and prospects
Ever After Foods business is focused on the development of cultivated meat manufacturing technologies Consumer demand for the cultivated meats manufactured using these technologies could change based on a number of possible factors including dietary habits and nutritional values concerns regarding the health effects of ingredients and shifts in preference for various product attributes If consumer demand for such products decreases Ever After Foods business and financial condition would suffer Consumer trends that we believe favor sales of products manufactured using our licensed technologies could change based on a number of possible factors including a shift in preference from animal based protein products economic factors and social trends A significant shift in consumer demand away from products manufactured using our technologies could reduce our sales or our market share and the prestige of our brand which would harm our business and financial condition
The manufacture distribution and marketing of food products is highly regulated Ever After Foods and its suppliers and licensees may be subject to a variety of laws and regulations These laws and regulations apply to many aspects of Ever After Foods business including the manufacture composition and ingredients packaging labeling distribution advertising sale quality and safety of food products and food contact substances including some manufacturing equipment as well as the health and safety of our employees and the protection of the environment
As applicable the manufacturing equipment that will be manufactured by Ever After Foods will comply with the FDA s regulatory requirements for food contact substances and analogous foreign regulations Ever After Foods will also ensure that the edible scaffolds and any other production materials it sells to its customers comply with applicable FDA standards From a regulatory perspective in the United States we expect companies manufacturing finished cultivated meat products i e the companies that will license Ever After Foods manufacturing technologies to be subject to regulation by various government agencies including the FDA the USDA the FTC the Occupational Safety and Health Administration and the Environmental Protection Agency as well as the requirements of various state and local agencies and laws such as the California Safe Drinking Water and Toxic Enforcement Act of 1986 We likewise expect these products to be regulated by equivalent agencies outside the United States by various international regulatory bodies
While as noted above Ever After Foods will ensure that the products it sells to its customers including manufacturing equipment and scaffolds comply with applicable FDA and USDA standards we believe that our customers as entities engaged in the manufacture distribution and sale of cultivated meat products will bear primary legal responsibility for ensuring that all finished foods produced using our technology is wholesome and not adulterated and otherwise in compliance with applicable laws and regulations Consistent with food industry norms we expect that our customers will therefore request assurances from us that our products are suitable for their intended use under applicable U S legal requirements
The manufacturing of cultivated meat is expected to be subject to extensive regulations internationally with products subject to numerous food safety and other laws and regulations relating to the sourcing manufacturing composition and ingredients storing labeling marketing advertising and distribution of these products In addition enforcement of existing laws and regulations changes in legal requirements and or evolving interpretations of existing regulatory requirements may result in increased compliance costs and create other obligations financial or otherwise that could adversely affect our business financial condition or operating results In addition we could be adversely affected by violations of the U S Foreign Corrupt Practices Act FCPA and similar worldwide anti bribery laws which generally prohibit companies and their intermediaries from making payments to foreign government officials for the purpose of obtaining or retaining business and require companies both to keep accurate books and records and to devise and maintain an adequate system of internal accounting controls While our policies mandate compliance with anti bribery laws including the FCPA our internal control policies and procedures may not protect us from reckless or criminal acts committed by our employees contractors or agents Violations of these laws or allegations of such violations could result in government investigations the assessment of fines and penalties reputational damage disruption to our business and adverse impacts on our results of operations cash flows and financial condition
Any changes in or changes in the interpretation of applicable laws regulations or policies of the USDA state regulators or similar foreign regulatory authorities that relate to the use of the terms meat or poultry or other similar terms in connection with cultivated meat products could adversely affect our business prospects results of operations or financial condition
The USDA state regulators or similar foreign regulatory authorities such as Health Canada or the Canadian Food Inspection Agency CFIA or authorities of the EU or the EU member states e g European Food Safety Authority or EFSA could take action that impacts our customers ability to use the term meat or poultry or similar words such as beef or chicken to describe their finished products In addition a food may be deemed misbranded if its labeling is false or misleading in any particular way and the USDA CFIA EFSA or other regulators could interpret the use of the terms meat or poultry or any similar phrase s to describe our customers cultivated meat products as false or misleading or likely to create an erroneous impression regarding their composition In the U S the USDA intends to issue new labeling requirements for foods under its jurisdiction produced through cell culture technology as noted in an ANPR published in September 2021
The success of our various new lines of business is difficult to predict due to our lack of operational history in these industries and we will be dependent on our ability to meet a number of challenges Since our new lines of business have a limited operating history these lines of business may not be able to deliver a successful high quality product at the scale of production they aim to deliver The success of these lines of business will be primarily but not only dependent on their ability to develop manufacturing solutions and leveraging Pluri s 3D cell expansion technology to create compelling products If our businesses will not be able to successfully meet these challenges and our prospects business financial condition and results of operations could be adversely impacted
In addition certain of our lines of business such as our Agtech and FoodTech lines which include Coffeesai Kokomodo and Ever After Foods will be subject to changing laws rules and regulations in the United States Israel Asia Pacific the European Union and other jurisdictions Such laws and regulations may negatively impact their ability to expand their businesses and pursue business opportunities Our subsidiaries may also incur significant expenses to comply with the laws regulations and other obligations that will apply to them
Additionally Kokomodo faces several key risks in connection with the development and potential commercialization of its cell based cacao products First the regulatory landscape for cell based cacao remains uncertain as no regulatory agency has approved such products for commercial sale to date Any delay or failure to obtain the necessary regulatory approvals could materially impact on the timing and feasibility of market entry Second the bioprocessing technology underlying Kokomodo s platform is subject to significant technical challenges including the need to optimize culture media composition fermentation conditions and quality control systems to ensure consistency and scalability Finally Kokomodo must successfully scale its technology beyond the POC stage to reach industrial scale production The transition from laboratory to commercial manufacturing involves substantial operational financial and technical risks and any failure to do so may adversely affect our ability to achieve our commercial objectives
It is highly likely that we will need to raise significant additional capital from investors in the future to finance our plant based business vertical operations Our current capital may not be sufficient to finance our AgTech lines of business and the plant based operations until we are able to complete the development of a high quality coffee and cacao If we are not able to attract investors and obtain additional financing PluriAgTech s and the plant based operations may be adversely affected or terminated
In connection with our cultivated plant based initiative we are working with external regulatory consultants to assess the technical and scientific requirements for determining whether the plant based cultivated coffee products including all components may be considered Generally Recognized as Safe GRAS under Section 201 s of the Federal Food Drug and Cosmetic Act FDCA and FDA s implementing regulations 21 C F R 170 30 If determined to be GRAS in accordance with FDA requirements the products would be excluded from the definition of a food additive under the FDCA and may be lawfully marketed in the United States without prior FDA authorization
If the products or any of their components are not determined to be GRAS they would be classified as food additives under Section 201 s of the FDCA In that case the products or ingredients could only be marketed in the U S if authorized for its intended use under an applicable food additive regulation and in compliance with all other relevant FDA requirements If no such regulation exists the respective plant based initiative may need to submit a food additive petition to request that FDA issue a new regulation authorizing the product s intended use
Additionally before marketing the plant based products in the United States the respective plant based initiative must also ensure compliance with applicable FDA food labeling requirements under section 403 of the FDCA and FDA s implementing regulations 21 C F R Part 101 manufactured at an FDA registered food facility pursuant to section 415 of the FDCA and FDA s implementing regulations 21 C F R Part 1 Subpart H and manufactured in accordance with all applicable FDA food safety requirements including but not limited to FDA s Hazard Analysis and Preventive Controls and Current Good Manufacturing Practice requirements 21 C F R Part 117 If the cultivated plant products are imported into the United States additional regulatory requirements may apply including submission of prior notice to FDA 21 C F R Part 1 Subpart I and compliance with Foreign Supplier Verification Program requirements 21 C F R Part 1 Subpart L as applicable
One of the elements of our business strategy is to collaborate with partners and to license our technology to other companies Our business strategy includes development and in house manufacturing of innovative new cell based products and solutions powered by our 3D cell expansion technology platforms and establishing joint ventures and partnerships that leverage our cell expansion technology and cell based product portfolio to expand product pipelines and meet cell based manufacturing needs for a variety of industries To date we have established Ever After Foods a strategic partnership with Tnuva with ICL Group through its Open Innovation program for advanced bioactive carriers and bio stimulants and with an undisclosed leading international agriculture corporation to enhance the global sustainable vegetable supply
Even if we are able to maintain or establish licensing or collaboration arrangements these arrangements may not be on favorable terms and may contain provisions that will restrict our ability to develop test and market our product candidates Any failure to maintain or establish licensing or collaboration arrangements on favorable terms could adversely affect our business prospects financial condition or ability to develop and commercialize our product candidates
Our agreements with our collaborators and licensees may have provisions that give rise to disputes regarding the rights and obligations of the parties These and other possible disagreements could lead to termination of the agreement or delays in collaborative research development supply or commercialization of certain product candidates or could require or result in litigation or arbitration Moreover disagreements could arise with our collaborators over rights to IP or our rights to share in any of the future revenues of products developed by our collaborators These kinds of disagreements could result in costly and time consuming litigation Any such conflicts with our collaborators could reduce our ability to obtain future collaboration agreements and could have a negative impact on our relationship with existing collaborators
Reimbursement by third party payers depends on a number of factors including the payer s determination that use of the product is safe and effective not experimental or investigational medically necessary appropriate for the specific patient and cost effective Reimbursement in the United States or foreign countries may not be available or maintained for any of our product candidates If we do not obtain approvals for adequate third party reimbursements we may not be able to establish or maintain price levels sufficient to realize an appropriate return on our investment in product development Any limits on reimbursement from third party payers may reduce the demand for or negatively affect the price of our products The lack of reimbursement for these procedures by insurance payers has negatively affected the market for our products in this indication in the past
Managing and reducing health care costs has been a general concern of federal and state governments in the United States and of foreign governments In addition third party payers are increasingly challenging the price and cost effectiveness of medical products and services and many limit reimbursement for newly approved health care products In particular third party payers may limit the indications for which they will reimburse patients who use any products that we may develop Cost control initiatives could decrease the price for products that we may develop which would result in lower product revenues for us
Our success depends in large part on our ability to develop and protect our technology and our cell therapy products If our patents and proprietary rights agreements do not provide sufficient protection for our technology and our cell therapy products our business and competitive position will suffer
Our success will also depend in part on our ability to develop our technology and commercialize our products without infringing the proprietary rights of others We have not conducted full freedom of use patent searches and no assurance can be given that patents do not exist or could not be filed which would have an adverse effect on our ability to develop our technology or maintain our competitive position with respect to our potential cell therapy products If our technology components devices designs products processes or other subject matter are claimed under other existing United States or foreign patents or are otherwise protected by third party proprietary rights we may be subject to infringement actions In such event we may challenge the validity of such patents or other proprietary rights or we may be required to obtain licenses from such companies in order to develop manufacture or market our technology or products There can be no assurances that we would be able to obtain such licenses or that such licenses if available could be obtained on commercially reasonable terms Furthermore the failure to either develop a commercially viable alternative or obtain such licenses could result in delays in marketing our proposed products or the inability to proceed with the development manufacture or sale of products requiring such licenses which could have a material adverse effect on our business financial condition and results of operations If we are required to defend ourselves against charges of patent infringement or to protect our proprietary rights against third parties substantial costs will be incurred regardless of whether we are successful Such proceedings are typically protracted with no certainty of success An adverse outcome could subject us to significant liabilities to third parties and force us to curtail or cease our development of our technology and the commercialization of our potential cell therapy products
We have built the ability to manufacture clinical grade adherent stromal cells in house Through our experience with adherent stromal cell based product development we have developed expertise and know how in this field We also have built the ability to grow on a large scale various immune cells including engineered placental MAIT cells for use in cell therapy Additionally we have built the ability to grow on a large scale plant cells for various AgTech uses To protect this expertise and know how our policies require confidentiality agreements with our employees consultants contractors manufacturers and advisors These agreements generally provide for protection of confidential information restrictions on the use of materials and assignment of inventions conceived during the course of performance for us These agreements might not effectively prevent disclosure of our confidential information
Our commercial success depends upon our ability and the ability of our collaborators to develop manufacture market and sell our product candidates and use our proprietary technologies without infringing the proprietary rights of third parties We have yet to conduct comprehensive freedom to operate searches to determine whether our proposed business activities or use of certain of the patent rights owned by us would infringe patents issued to third parties We may become party to or threatened with future adversarial proceedings or litigation regarding IP rights with respect to our products and technology including interference proceedings before the U S Patent and Trademark Office Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future If we are found to infringe a third party s IP rights we could be required to obtain a license from such third party to continue developing and marketing our products and technology However we may not be able to obtain any required license on commercially reasonable terms or at all
Even if we were able to obtain a license it could be non exclusive thereby giving our competitors access to the same technologies licensed to us We could be forced including by court order to cease commercializing the infringing technology or product In addition we could be found liable for monetary damages A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations which could materially harm our business For example we are aware of issued third party patents directed to placental stem cells and their use for therapy and in treating various diseases We may need to seek a license for one or more of these patents No assurances can be given that such a license will be available on commercially reasonable terms if at all Claims that we have misappropriated confidential information or trade secrets of third parties could have a similar negative impact on our business
Even if resolved in our favor litigation or other legal proceedings relating to IP claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities In addition there could be public announcements about the results of hearings motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative it could have a substantial adverse effect on the price of our common shares Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales marketing or distribution activities We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings Some of our competitors are able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace
The patent position of biotechnology and pharmaceutical companies generally is highly uncertain involves complex legal and factual questions and has in recent years been the subject of much litigation As a result the issuance scope validity enforceability and commercial value of our and any future licensors patent rights are highly uncertain Our pending and future patent applications may not result in patents being issued which protect our technology or products or which effectively prevent others from commercializing competitive technologies and products Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection The laws of foreign countries may not protect our rights to the same extent as the laws of the United States and we may not be able to obtain meaningful patent protection for any of our commercial products either in or outside the United States
No assurance can be given that the scope of any patent protection granted will exclude competitors or provide us with competitive advantages that any of the patents that have been or may be issued to us will be held valid if subsequently challenged or that other parties will not claim rights to or ownership of our patents or other proprietary rights that we hold Furthermore there can be no assurance that others have not developed or will not develop similar products duplicate any of our technology or products or design around any patents that have been or may be issued to us or any future licensors Since patent applications in the United States and in Europe are not publicly disclosed until patents are issued there can be no assurance that others did not first file applications for products covered by our pending patent applications nor can we be certain that we will not infringe any patents that may be issued to others
On November 25 2024 we received a deficiency letter the Nasdaq Letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC the Nasdaq notifying us that we are not in compliance with the Stockholders Equity Requirement which requires us to maintain a minimum of 2 5 million in stockholders equity nor were in compliance with either of the alternative listing standards market value of listed securities of at least 35 million or net income of 500 000 from continuing operations in the most recently completed fiscal year or in two of the three most recently completed fiscal years
On January 6 2025 we submitted a plan to regain compliance the Compliance Plan Based on the Compliance Plan Nasdaq determined to grant us an extension of time to regain compliance with the Stockholders Equity Requirement until May 24 2025 On May 7 2025 we received a letter from Nasdaq determining that the Company had regained compliance with Listing Rule 5550 b 2 due to the fact that for the 10 consecutive business days from April 22 2025 through May 6 2025 the market value of the Company s listed securities was 35 million or greater satisfying the requirement under Rule 5550 b 2 Accordingly the Company has regained compliance with the Shareholders Equity Requirement and remains in good standing on The Nasdaq Capital Market
We cannot guarantee that we will continue to comply with the Nasdaq Stockholders Equity Requirement If we fail to comply with the Nasdaq Stockholders Equity Requirement Nasdaq could delist our common shares from trading on its exchange and if we are unable to obtain listing on another national securities exchange or take action to restore our compliance with the Nasdaq continued listing requirements we and our shareholders could incur material adverse consequences including a negative impact on our liquidity our shareholders ability to sell shares and our ability to raise capital
As a result of the voting outcome at our 2025 annual meeting of shareholders the 2025 Annual Meeting one of our then current directors who was classified as an independent director and acted as chairman of the Audit Committee and the sole member of the Investment Committee was not re elected to our Board and therefore ceased to serve as a director and as a member of the respective committees on which he serves effective June 30 2025 On June 30 2025 we notified Nasdaq that due to the departure of the director we are no longer in compliance with Nasdaq Listing Rule 5605 c 2 A the Audit Committee Requirements which requires the audit committee to be comprised of at least three independent directors On July 2 2025 we received a letter from the Listing Qualifications Department of Nasdaq notifying us that consistent with Listing Rule 5605 c 4 Nasdaq will provide us a cure period to regain compliance with Nasdaq Listing Rule 5605 c 2 A which will expire on the earlier of i our next annual meeting of shareholders or June 30 2026 or ii if our next annual meeting of shareholders is held before December 29 2025 then we must evidence compliance no later than June 30 2026 On September 10 2025 we appointed a new independent director to our Board who also joined our Audit Committee Subsequently on September 11 2025 we received a letter from Nasdaq confirming that the Company had regained compliance with the Audit Committee Requirement and that the matter is closed
Future sales of our common shares or the perception that such sales may occur could cause immediate dilution and adversely affect the market price of our common shares If we raise additional capital by issuing equity securities the percentage ownership of our existing shareholders may be reduced and accordingly these shareholders may experience substantial dilution We may also issue equity securities that provide for rights preferences and privileges senior to those of our common shares Given our need for cash and that equity raising is the most common type of fundraising for companies like ours the risk of dilution is particularly significant for shareholders of our company
A significant portion of our business is conducted outside the United States Therefore we are exposed to currency exchange fluctuations in other currencies such as the NIS and Euro A significant portion of our expenses in Israel are paid in NIS and we have also received 20 million pursuant to the EIB Finance Agreement that bears 4 annual interest All of these factors subject us to the risks of foreign currency fluctuations Our primary expenses paid in NIS are employee salaries and lease payments on our facilities From time to time we may apply a hedging strategy by using options and forward contracts to protect ourselves against some of the risks of currency exchange fluctuations and we are actively monitoring the exchange rate differences of the NIS Euro and U S Dollar however we are still exposed to potential losses from currency exchange fluctuation
Our assets include a significant component of cash and cash equivalents and bank deposits We adhere to an investment policy set by our investment committee which aims to preserve our financial assets maintain adequate liquidity and maximize returns We believe that our cash is held in institutions whose credit risk is minimal and that the value and liquidity of our deposits are accurately reflected in our consolidated financial statements as of June 30 2025 Currently we hold most of our cash assets in bank deposits in Israel However nearly all of our cash and bank deposits are not insured by the Federal Deposit Insurance Corporation or the FDIC or similar governmental deposit insurance outside the United States Therefore our cash and any bank deposits that we now hold or may acquire in the future may be subject to risks including the risk of loss or of reduced value or liquidity particularly in light of the increased volatility and worldwide pressures in the financial and banking sectors
There is a trend towards consolidation in the pharmaceutical and biotechnology industries This consolidation trend may result in the remaining companies having greater financial resources and technical discovery capabilities thus intensifying competition in these industries This trend may also result in fewer potential collaborators or licensees for our therapeutic product candidates Also if a consolidating company is already doing business with our competitors we may lose existing licensees or collaborators as a result of such consolidation This trend may adversely affect our ability to enter into license agreements or agreements for the development and commercialization of our product candidates and as a result may materially harm our business
The cellular therapeutics industry of which we are a part is very competitive and is subject to technological changes that can be rapid and intense We have faced and will continue to face intense competition from biotechnology pharmaceutical and biopharmaceutical companies academic and research institutions and governmental agencies engaged in cellular therapeutic and drug discovery activities or funding both in the United States and internationally Some of these competitors are pursuing the development of cellular therapeutics drugs and other therapies that target the same diseases and conditions that we target in our clinical and pre clinical programs
Some of our competitors have greater resources more product candidates and have developed product candidates and processes that directly compete with our products Our competitors may have developed or could develop in the future new products that compete with our products or even render our products obsolete
Moreover the alternative protein market is highly competitive with numerous brands vying for limited space in retail foodservice and consumer preference To succeed Ever After Foods cultured meat products must excel in costs taste ingredients marketing and branding Generally the food industry is dominated by multinational corporations with substantially greater resources and operations than Ever After Foods We cannot be certain that Ever After Foods will successfully compete with larger competitors that have greater financial marketing sales manufacturing distributing and technical resources Conventional food companies may acquire Ever After Foods competitors or launch their own competing products and they may be able to use their resources and scale to respond to competitive pressures and changes in consumer preferences by introducing new products reducing prices or increasing promotional activities among other things Competitive pressures or other factors could prevent Ever After Foods from acquiring market share or cause us to lose market share which may require Ever After Foods to lower prices or increase marketing and advertising expenditures either of which would adversely affect its margins and could result in a decrease in its operating results and profitability We cannot assure that we will be able to maintain a competitive position or compete successfully against such sources of competition
We face an inherent business risk of exposure to product liability and CDMO service claims in the event that the use of our products or CDMO services results in adverse effects We may not be able to maintain adequate levels of insurance for these liabilities at reasonable cost and or reasonable terms Excessive insurance costs or uninsured claims would add to our future operating expenses and adversely affect our financial condition
In addition to the placenta used in the clinical manufacturing process of PLX we require certain raw materials These items must be manufactured and supplied to us in sufficient quantities and in compliance with current GMP To meet these requirements we have entered into supply agreements with firms that manufacture these raw materials to current GMP standards Our requirements for these items are expected to increase if and when we transition to the manufacture of commercial quantities of our cell based drug candidates
In addition as we proceed with our trial efforts we must be able to continuously demonstrate to the FDA EMA and other regulatory authorities that we can manufacture our cell therapy product candidates with consistent characteristics Accordingly we are materially dependent on these suppliers for supply of current GMP grade materials of consistent quality Our ability to complete ongoing clinical trials may be negatively affected in the event that we are forced to seek and validate a replacement source for any of these critical materials
We intend to decrease our dependency on third party suppliers for raw materials To that effect we have developed a serum free formulation which is expected to support the manufacturing of cell therapy products This serum free formulation was developed using our deep understanding in cell therapy industrial scale production standards and the quality methods designed to support implementation in Phase III development and marketing Achieving this significant technological challenge is expected to provide us with large scale highly consistent production with operational independence from third party suppliers for standard serum an expensive and quantity limited product There can be no guarantee that we will successfully implement the use of our serum free formulation to support the manufacturing of cell therapy products or any other future product candidates if any that we seek to produce using such formulation or that such implementation of the serum free formulation will decrease our dependency on third party suppliers for raw materials
With respect to CAR TCR MAIT products for immune oncology we are dependent upon third party suppliers for the construct of CAR or TCR needed to manufacture the final product if these third parties fail or are unable to perform in a timely manner our ability to manufacture and deliver the final product will be compromised
In addition to the placenta used in the manufacturing process of extracting MAIT cells the construct of CAR or TCR is needed for the manufacturing of the final product The final product would be allogeneic placental derived MAIT cells transduced with CAR or TCR construct The construct must be manufactured and supplied to us in sufficient quantities and in compliance with current GMP by a third party To meet these requirements we have started discussions with potential partners and manufacturers that obtain IP rights for these constructs engaging in feasibility tests to ensure compliance with our MAIT cells and requirements
In addition to ensuring a proper partner or supplier to manufacture the construct we must succeed in incorporating the construct into the MAIT cells to create a sufficient number of final products i e CAR or TCR MAIT products As a first POC the final product will be tested for efficacy and safety in pre clinical setting and the process development will be finalized to allow pre IND readiness and proceed to clinical development
We have relied on and utilized services provided by third parties in connection with our clinical trials which services involve the collection use storage and analysis of personal health information While we receive assurances from these vendors that their services are compliant with the Health Insurance Portability and Accountability Act and other applicable privacy laws there can be no assurance that such third parties will comply with applicable laws or regulations Non compliance by such vendors may result in liability for us which would have a material adverse effect on our business financial conditions and results of operations
Future security breaches or any material system failure events could result in a material disruption of our development programs and our business operations For example the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications or inappropriate disclosure of confidential or proprietary information we could incur liability and the further development and commercialization of our product candidates could be delayed We are constantly exploring new and advanced security protection measures to prevent future cybersecurity incidents See Item 1C Cybersecurity for additional information
We use AI tools in certain administrative functions and are evaluating suitability of these technologies for broader administrative and data processing applications These technologies are not embedded in our core operations or product development systems Potential risks include inaccuracies or biases in AI generated analyses compliance challenges with emerging AI regulations and cybersecurity vulnerabilities We continue to monitor and assess AI technologies to mitigate potential impacts on our business
In addition we are subject to laws rules and regulations in the Israeli United States the EU and other jurisdictions relating to the collection use and security of personal information and data Such data privacy laws regulations and other obligations may require us to change our business practices and may negatively impact our ability to expand our business and pursue business opportunities We may incur significant expenses to comply with the laws regulations and other obligations that apply to us Additionally the privacy and data protection related laws rules and regulations applicable to us are subject to significant change Several jurisdictions have passed new laws and regulations in this area and other jurisdictions are considering imposing additional restrictions Privacy and data protection related laws and regulations also may be interpreted and enforced inconsistently over time and from jurisdiction to jurisdiction Any actual or perceived inability to comply with applicable privacy or data protection laws regulations or other obligations could result in significant cost and liability litigation or governmental investigations damage our reputation and adversely affect our business
The collection and use of personal health data in the EU is governed by the provisions of the General Data Protection Regulation GDPR This directive imposes several requirements relating to the consent of the individuals to whom the personal data relates the information provided to the individuals notification of data processing obligations to the competent national data protection authorities and the security and confidentiality of the personal data The GPDR also extends the geographical scope of EU data protection law to non EU entities under certain conditions tightens existing EU data protection principles and creates new obligations for companies and new rights for individuals Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU member States may result in fines and other administrative penalties There may be circumstances under which a failure to comply with GDPR or the exercise of individual rights under the GDPR would limit our ability to utilize clinical trial data collected on certain subjects The GDPR regulations impose additional responsibility and liability in relation to personal data that we process and we intend to put in place additional mechanisms ensuring compliance with these and or new data protection rules
We are subject to the Foreign Corrupt Practice Act FCPA and other laws that prohibit U S companies or their agents and employees from providing anything of value to a foreign official or political party for the purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business direct business to any person or corporate entity or obtain any unfair advantage We have operations and agreements with third parties Our international activities create the risk of unauthorized and illegal payments or offers of payments by our employees or consultants even though they may not always be subject to our control We discourage these practices by our employees and consultants However our existing safeguards and any future improvements may prove to be less than effective and our employees or consultants may engage in conduct for which we might be held responsible for Any failure by us to adopt appropriate compliance procedures and ensure that our employees and consultants comply with the FCPA and applicable laws and regulations in foreign jurisdictions could result in substantial penalties or restrictions on our ability to conduct business in certain foreign jurisdictions
Violations of the FCPA may result in severe criminal or civil sanctions and we may be subject to other liabilities which could negatively affect our business operating results and financial condition In addition the U S government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire
We have received royalty bearing grants from the IIA for research and development programs that meet specified criteria The terms of the IIA s grants limit our ability to transfer know how developed under an approved research and development program by way of sale and or granting a license to use the IP and or the manufacturing of products developed under an approved research and development program outside of Israel regardless of whether the royalties are fully paid Any non Israeli citizen resident or entity that among other things becomes a holder of 5 or more of our share capital or voting rights is entitled to appoint one or more of our directors or our Chief Executive Officer CEO serves as a director of our Company or as our CEO is generally required to notify the same to the IIA and to undertake to observe the law governing the grant programs of the IIA the principal restrictions of which are the transferability limits described above To the extent a company wishes to transfer its IIA supported know how outside of Israel by way of sale and or granting a license to use the IP the IIA acts under the Law for the Encouragement of research Development and Technological Innovation in the Industry 1984 and the related IIA rules and regulations it must be preapproved by the IIA and the company may be required to pay an additional payment to the IIA The minimum amount of the payment is the total sum of grants received plus interest and the maximum amount shall be no higher than six times the total sum of grants received plus interest In the case that the IIA supported company sells the IP but retains its research and development center in Israel for at least three consecutive years following the year of transferring the IIA supported know how outside of Israel while maintaining at least 75 of its research and development employees in Israel the payment will be limited to three times the total sum of grants received plus interest For more information see Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources
Inflation could affect our ability to purchase materials needed to support our research development and operational activities which in turn could result in higher burn rate and a higher end price of our future products As a result we may not be able to effectively develop our cell based product candidates or cultivated meat products If we are not able to successfully manage inflation our prospects business financial condition and results of operations could be adversely impacted
Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG and sustainability practices Certain market participants including institutional investors and capital providers are increasingly placing importance on the impact of their investments and are thus focusing on corporate ESG practices including the use of third party benchmarks and scores to assess companies ESG profiles in making investment or voting decisions and engaging with companies to encourage changes to their practices Unfavorable ESG ratings could lead to increased negative investor sentiment towards us or our industry If we do not comply with investor or stockholder expectations and standards in connection with our ESG initiatives or are perceived to have not addressed ESG issues within our company our business and reputation could be negatively impacted and our share price could be materially and adversely affected as well as our access to and cost of capital
In addition we may commit to certain initiatives or goals but not ultimately achieve such commitments or goals due to factors that are both within or outside of our control Moreover actions or statements that we may take based on expectations assumptions or third party information that we currently believe to be reasonable may subsequently be determined to be erroneous or be subject to misinterpretation Even if this is not the case our current actions may subsequently be determined to be insufficient by various stakeholders and we may be subject to investor or regulator engagement on our ESG initiatives and disclosures even if such initiatives are currently voluntary In addition increasing ESG related regulations may also result in increased compliance costs or scrutiny
Expectations around a company s management of ESG matters continue to evolve rapidly in many instances due to factors that are out of our control To the extent ESG matters negatively impact our reputation it may also impede our ability to compete as effectively to attract and retain employees or customers which may adversely impact our operations
Since we have signed the EIB Finance Agreement we agreed to guaranty the loan as well as agreed to limitations that require us to notify the EIB and in some cases obtain their approval before we engage with other banks for additional sources of funding or with potential partners for certain strategic activities
The EIB Finance Agreement contains certain limitations that we must adhere to such as the use of proceeds received from the EIB the disposal of assets substantive changes in the nature of our business our potential execution of mergers and acquisitions changes in our holding structure distributions of future potential dividends and our engaging with other banks and financing entities for other loans
Our principal research and development and manufacturing facilities are located in Haifa Israel and military conditions in Israel including the armed conflict between Israel and terrorist organizations from the Gaza Strip Lebanon and Yemen tensions with regional countries hostile to Israel such as Iran may cause interruption or suspension of our business operations without warning
Our principal R D and manufacturing facilities are located in Haifa Israel thus political economic and military conditions in Israel and in particular conflicts involving Israel and terrorist organizations such as Hamas in the Gaza Strip Hezbollah in Lebanon and Ansar Allah Houthis in Yemen the conflict with Iran as well as tensions with regional countries hostile to Israel may directly affect our business
As of the date of this Annual Report there has been no material impact on our operations According to the recent guidelines of the Israeli government the Company s offices in Haifa are open and functioning however if a war will escalate or expand with one or more of the countries or organizations in conflict with Israel this situation may change and the Israeli government may impose certain restrictions on movement and travel which will affect our management and employees ability to effectively perform their daily tasks and may result in disruptions and delays in some of our projects
Any hostilities involving Israel terrorist activities political instability or violence in the region or the interruption or curtailment of trade or transport between Israel and its trading partners could make it more difficult for us to raise capital if needed in the future and adversely affect our operations and results of operations and the market price of our common shares In addition to the extent the IIA no longer makes grants similar to those we have received in the past it could adversely affect our financial results
Furthermore certain of our employees may be obligated to perform annual reserve duty in the Israel Defense Forces and are subject to being called up for active military duty at any time Many Israeli citizens who have served in the army are required to perform reserve duty until they reach the age of 40 or older depending upon the nature of their military service Currently two of our employees neither of which is an executive officer have been called for active military reserve duty
The war s implications including but not only the war s economic implications on the Company s business and operations and on Israel s economy in general are difficult to predict Such events may be intertwined with wider macroeconomic indications of a deterioration of Israel s economic standing for instance a downgrade in Israel s credit rating by rating agencies which may have a material adverse effect on the Company and its ability to effectively conduct its operations
In addition Israeli based companies and companies doing business with Israel have been the subject of an economic boycott by members of the Arab League and certain other predominantly Muslim countries since Israel s establishment Although Israel has entered into various agreements with certain Arab countries and the Palestinian Authority and various declarations have been signed in connection with efforts to resolve some of the economic and political problems in the Middle East we cannot predict whether or in what manner these problems will be resolved Wars and acts of terrorism have resulted in significant damage to the Israeli economy including reducing the level of foreign and local investment
We operate in the biotechnology industry where the protection of sensitive information and the continuity of our operations are critical We are subject to cybersecurity risks which could adversely affect our business financial condition or results of operations We maintain a risk based cybersecurity program designed to identify assess and mitigate cybersecurity threats Our program incorporates applicable industry standards and is managed through a cross functional approach involving our Information Technology legal compliance and other relevant teams It is overseen by our Chief Information Officer CIO who is responsible for the day to day management of cybersecurity risks and the implementation of our information security program and incident response plans
Our risk management activities include periodic assessments vulnerability testing and tabletop exercises as well as regular engagement with third party experts to perform independent security assessments We have expanded employee training and phishing simulations and we conduct ongoing monitoring of access to our systems including oversight of third party vendors and service providers The results of assessments and reviews are reported to senior management and the Audit Committee and our policies and controls are updated as necessary
While we have experienced a cybersecurity incident in the past and encounter cybersecurity threats from time to time in the ordinary course of business none to date have had a material adverse effect on our business financial condition results of operations or cash flows Despite our proactive measures including expanded employee training and enhanced vendor oversight cybersecurity threats continue to evolve and no system can be entirely secure A future cybersecurity incident could materially impact our operations financial results or reputation
As part of our overall risk management framework our cybersecurity program takes a comprehensive layered approach to identifying preventing and mitigating cybersecurity threats and incidents This includes implementing controls and escalation procedures to ensure that significant incidents are promptly communicated to management for timely decision making regarding public disclosure and regulatory reporting
We deploy multiple technical safeguards designed to protect our information systems including firewalls intrusion prevention and detection systems anti malware tools access controls and continuous monitoring These safeguards are evaluated and enhanced through regular vulnerability assessments penetration testing and ongoing cybersecurity threat intelligence
We apply a risk based approach to managing cybersecurity risks posed by third parties including vendors contract research organizations service providers and other external users of the our systems This also includes assessing and overseeing risks related to third party systems that if compromised could negatively impact our business operations
The Audit Committee of our Board oversees our risk management process including the management of risks from cybersecurity threats Our CIO Mr Oren Kochavi is an accomplished executive with 14 years of experience leading information technology enterprise systems information security and related technology functions Mr Kochavi holds an MBA in Business Administration and multiple professional certifications and is responsible for the day to day administration of our cybersecurity program and reports to the Audit Committee on cybersecurity matters The Audit Committee receives periodic reports and presentations addressing cybersecurity risks recent developments evolving standards results of vulnerability assessments findings from third party and independent reviews current threat intelligence technological trends and relevant developments regarding security considerations arising with respect to our peers and third parties According to our procedures the Audit Committee is promptly informed of any cybersecurity incident that meets established reporting thresholds and receives ongoing updates until the matter is fully resolved
Our principal executive manufacturing and research and development offices are located at MATAM Advanced Technology Park Building No 5 Haifa Israel where we occupy approximately 4 389 square meters This space facilitates operations for Pluri Pluri Biotech Coffeesai and Kokomodo In addition Ever After Foods a majority held subsidiary of Pluri Biotech occupies a separate office space located at 1 Netiv HaOr street Haifa Israel comprising approximately 655 square meters Our gross monthly rent payment for these leased facilities as of June 30 2025 was 347 000 NIS approximately 95 000 For fiscal year 2025 we recognized expense in the amount of 1 093 000 according to the implementation of Accounting Standards Update No 2016 02 Leases
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the notes thereto contained elsewhere in this Annual Report Certain information contained in the discussion and analysis set forth below includes forward looking statements that involve risks and uncertainties Our actual results may differ materially from those discussed in any forward looking statement because of various factors including those described in the sections titled Cautionary Note Regarding Forward Looking Statements and Risk Factors in this Annual Report
We are a biotechnology company leveraging our proprietary cell expansion platform to develop scalable cell based solutions across the healthcare food and agriculture sectors Through a collaborative network of ventures the Company is advancing a diverse pipeline of products and services including cultivated food regenerative medicine and cell based ingredients We have developed a unique 3D technology platform for cell expansion with an industrial scale cell manufacturing facility operated in accordance with GMP standards currently on a self declared basis We are utilizing our technology across the field of regenerative medicine immunotherapy food tech CDMO and AgTech and plan to utilize it in industries and verticals that have a need for our mass scale and cost effective cell expansion platform via partnerships joint ventures licensing agreements and other types of collaborations
Our operations are dedicated to the research development and manufacturing of cell based products as well as the commercialization of cell therapeutics and related technologies aimed at delivering innovative solutions across a range of industries as described in detail under Item 1 Business and as set forth below
In July 2023 we announced that we signed a three year 4 2 million contract with the NIAID under which we were to collaborate with the AFRRI and the USUHS in Maryland U S A to further advance the development of our PLX R18 cell therapy as a potential novel treatment for H ARS a deadly disease that can result from nuclear disasters and radiation exposure On April 15 2025 we received formal notice from NIAID that the contract was being terminated for the Government s convenience effective immediately The termination was not related to any performance issues on our part and we received funding for activities conducted up to the effective date As of the date of this Annual Report we received a total of 2 3 million under the contract
In March 2025 we announced that we entered into an exclusive collaboration agreement with Hemafund aiming to establish a strategic initiative for stockpiling local distribution and potential clinical advancement of our PLX R18 cell therapy as a countermeasure for H ARS in Ukraine The collaboration aims to build capacity for up to 12 000 doses of PLX R18 which will be stored and managed by Hemafund to ensure rapid deployment in the event of a radiation related emergency The parties also intend to pursue external funding to support manufacturing stockpiling and potential clinical trials of PLX R18 for regulatory registration in Ukraine If successful the collaboration could potentially generate over 100 million in value for the parties based on projected demand and dose estimates
In October 2024 we announced that the IIA approved funding for our collaboration with BIRAD the commercial arm of Bar Ilan University to support the continued development of placental derived MAIT cells for the treatment of solid tumors As part of this collaboration novel Siglec based Chimeric Switch Receptors CCR developed by Professor Cyrille Cohen Head of the laboratory of tumor immunology and immunotherapy at Bar Ilan University will be integrated into our CAR MAIT cell therapy platform to enhance tumor specificity and therapeutic efficacy The collaboration leverages our proprietary MAIT cell technology alongside BIRAD s expertise in engineering clinically optimized T cell modification vectors The IIA has committed to fund the collaboration for an initial term of one year with an option to extend for an additional year subject to IIA approval The total approved budget for the first year is NIS 549 067 approximately 163 000 As of the date of this Annual Report we have received approximately 29 000 from the IIA for this project
In April 2025 we announced that the USPTO has issued a patent covering our immune cell expansion technologies Additionally we announced that we were issued a patent in Israel which mirrors a previously granted U S patent Following these recent patent grants our intellectual property estate includes over 250 patents pending allowed and granted
Coffeesai has successfully demonstrated a proof of concept coffee beverage validating the potential of its technology Ongoing efforts are focused on enhancing flavor and aroma profiles through bioprocess optimization and downstream refinement In parallel Coffeesai is exploring research and development collaborations aimed at accelerating development and commercialization with leading global coffee suppliers A third party techno economic assessment has confirmed the cost competitiveness of the platform at scale supporting its commercial viability
On January 23 2025 the Company entered into a binding term sheet Term Sheet for the purchase of certain shares representing approximately 79 of the equity of Kokomodo for an aggregate purchase price of 4 5 million payable in common shares of the Company Following the execution of the Term Sheet on March 13 2025 the Company and our wholly owned subsidiary Pluri Biotech collectively the Purchaser entered into a Share Purchase Agreement the Share Purchase Agreement effective as of March 12 2025 with Chutzpah Holdings Limited Chutzpah a company wholly owned by Mr Alejandro Weinstein and Plantae Bioscience Ltd Plantae a corporation controlled by Mr Weinstein collectively the Seller pursuant to which on April 28 2025 the Seller sold to the Purchaser 400 000 ordinary shares and 175 000 preferred seed 1 shares the Purchased Shares representing approximately 79 of the equity of Kokomodo for an aggregate purchase price of 4 5 million payable in 976 139 of our common shares the Consideration Shares Pursuant to the Share Purchase Agreement the Seller also transferred assigned and conveyed in favor of the Purchaser a convertible loan pursuant to an assignment and assumption agreement the Assignment Agreement reflecting a principal aggregate amount of 0 5 million together with the Purchased Shares the Purchased Interests and such transactions are referred to as the Kokomodo Transaction
Kokomodo is an innovative startup pioneering the sustainable production of cacao using cellular agriculture technology Instead of relying on traditional tropical farming Kokomodo cultivates real cacao directly from plant cells in controlled environments such as bioreactors making climate resilient cacao accessible year round on a global scale Founded in 2024 Kokomodo aims to transform the cacao industry reducing environmental impact while ensuring a steady high quality supply for chocolate and related products
In March 2024 we announced an important expansion to our IP portfolio with a new patent approval from the IPO that is designed to reshape the agricultural technology landscape and represents a major breakthrough in our proprietary 3D bioreactor technology enabling efficient cultivation of plant cells across various applications from sustainable agriculture to critical healthcare solutions
In June 2024 we entered into the Agreement by and among Ever After Foods Tnuva and certain other international investors pursuant to which Ever After Foods issued and sold ordinary shares in a private placement offering or the Offering for aggregate gross proceeds of 10 million As part of the Offering we invested 1 25 million In addition our wholly owned subsidiary Pluri Biotech and Ever After Foods executed the Amended and Restated Technology License Agreement expanding the scope of the license to include fish and seafood
In February 2025 Ever After Foods announced a strategic collaboration with Bühler to jointly advance scalable cultivated meat production systems specifically designed for the food industry The parties intend to develop and deploy manufacturing equipment that enables food producers to efficiently produce cultivated meat at significantly reduced costs and at volumes suitable for market entry
Revenues for the year ended June 30 2025 were 1 336 000 compared to 326 000 for the year ended June 30 2024 The revenues for the years ended June 30 2025 and 2024 were primarily generated from services provided to CDMO clients for process and product development as well as income from fees in the AgTech sector The increase in revenues is mainly attributed to higher services provided to CDMO clients and additional revenues from POC collaboration in the AgTech field
Cost of revenues for the year ended June 30 2025 were 682 000 compared to 4 000 for the year ended June 30 2024 Cost of revenues for the year ended June 30 2025 includes manufacturing costs related to our CDMO and AgTech fields which primary consist of materials personnel related and overhead costs Cost of revenues for the year ended June 30 2024 includes royalties which we are obligated to pay to the IIA
Research and development net costs less participation by the IIA Horizon Europe and the NIAID increased by 3 from 12 446 000 for the year ended June 30 2024 to 12 851 000 for the year ended June 30 2025 The increase is mainly attributed to 1 an increase related to subcontractors in immunotherapy and AgTech projects and an increase due to write off provisions in clinical studies following its completion partially offset by 2 a decrease in materials costs related to a supplier credit and a decrease due to material purchases in line with our manufacturing needs and plans 3 a decrease in participation by NIAID and 4 a decrease in R D expenses due to classification of expenses into cost of revenues
General and administrative expenses decreased by 0 5 from 10 034 000 for the year ended June 30 2024 to 9 979 000 for the year ended June 30 2025 This decrease was primarily driven by a reduction in share based compensation expenses mainly attributed to employee terminations and amortization of restricted stock units RSUs expenses over time This reduction was partially offset by 1 an increase in salaries and related expenses due to the reinstatement of the salary of Mr Yaky Yanay our CEO following his salary reduction from January 2023 through December 2023 whereby he waived 75 of his salary and converted it to RSUs and options 2 an increase in salaries and related expenses due to reinstatement of temporary reduction in employees regular working hours for a limited period in December 2023 3 an increase in bonus expenses for certain employees including our CEO and Mrs Chen Franco Yehuda our former Chief Financial Officer CFO related to performance based bonuses pursuant to their respective employment agreements and 4 increased share based compensation expenses related to RSUs and options granted during the prior year to employees officers directors and consultants
Financial income expenses net decreased from 1 680 000 in financial income for the year ended 2024 to 206 000 in financial expenses for the year ended June 30 2025 This decrease is mainly attributed to 1 exchange rate differences expenses related to the EIB Loan pursuant to the EIB Finance Agreement following fluctuation between the U S dollar against the Euro 2 a decrease in interest income from deposits resulting from lower interest rates and reduced deposit levels due to withdrawals and 3 a decrease due to exchange rate expenses on a lease liability due to the strength of the NIS against the U S Dollar partially offset by 4 an increase in income from hedging transactions and 5 an increase in income from change in fair value of warrant and pre funded warrant liabilities Our primary expenses paid in NIS are employee salaries and lease payments on our facilities From time to time we may apply a hedging strategy by using options and forward contracts to protect ourselves against some of the risks of currency exchange fluctuations and we are actively monitoring the exchange rate differences of the NIS Euro and U S Dollar
Net loss increased from 21 344 000 for the year ended June 30 2024 to 23 250 000 for the year ended June 30 2025 The increase in net loss was mainly due to exchange rate differences expenses as mentioned above We had a net loss attributed to our non controlling interest in Ever After Foods for the year ended June 30 2024 of 456 000 and 667 000 for the year ended June 30 2025 with respect to Ever After Foods and Kokomodo
Loss per share for the year ended June 30 2025 was 3 56 compared to 3 99 loss per share for the year ended June 30 2024 The change in the loss per share was primarily due to an increase in the loss for the year as well as an increase in our weighted average number of shares outstanding resulting from the issuance of additional shares due to the Offering as defined below the Second Offering as defined below and the investment in Kokomodo during fiscal year 2025
Our cash cash equivalents and restricted cash as of June 30 2025 amounted to 6 317 000 which reflects a decrease of 720 000 from the 7 037 000 reported as of June 30 2024 Our cash equivalents and restricted cash decreased in the year ended June 30 2025 Our bank deposits and restricted bank deposits as of June 30 2025 amounted to 15 597 000 compared to 23 836 000 as of June 30 2024 Our bank deposits and restricted bank deposits as of June 30 2025 decreased for the year ended June 30 2025 The cash cash equivalents restricted cash bank deposits and restricted bank deposits decreased for the reasons presented below
Cash used in operating activities increased to 18 211 000 for the year ended June 30 2025 from 18 021 000 in the prior year primarily due to a reduction in grants received from the IIA Horizon Europe and NIAID contract funding effect of exchange rate continued payments to suppliers subcontractors professional service providers and employees partially offset by an increase in customer receivable and in income from hedging transactions
Cash provided by investing activities was 8 026 000 during the year ended June 30 2025 and cash provided by investing activities during the year ended June 30 2024 was 10 584 000 Cash provided by investing activities in the year ended June 30 2025 consisted primarily of the withdrawal of 9 271 000 of short term deposits net and cash related to the Kokomodo Transaction of 373 partially offset by payments of 1 618 000 related to investments in property and equipment Cash provided by investing activities in the year ended June 30 2024 consisted primarily of the withdrawal of 10 907 000 of short term deposits partially offset by payments of 323 000 related to investments in property and equipment
Financing activities provided cash in the amount of 9 533 000 during the year ended June 30 2025 and 8 841 000 during the year ended June 30 2024 The financing activities during the year ended June 30 2025 related primarily to net proceeds received from the Offering as defined below and the Second Offering as defined below The financing activities during the year ended June 30 2024 related primarily to the investment in Ever After Foods by external investors
On December 14 2022 Mr Yanay our CEO agreed to forgo starting January 1 2023 375 000 of his annual cash salary for the next twelve months in return for equity grants issuable under our existing equity compensation plans 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 at an exercise price of 8 96 per share In addition the Board agreed to grant Mr Yanay options to purchase 187 500 common shares with a term of 3 years with the following terms i options to purchase 62 500 common shares at an exercise price of 12 48 per share 50 vested on June 30 2023 and 50 vested on December 31 2023 ii options to purchase 62 500 common shares at an exercise price of 16 64 per share 50 vested on June 30 2023 and 50 vested on December 31 2023 and iii options to purchase 62 500 common shares at an exercise price of 20 8 per share 50 vested on June 30 2023 and 50 vested on December 31 2023 All options that were granted in January 2023 will expire on April 27 2026
On February 13 2024 we entered into a sales agreement the Sales Agreement with A G P Alliance Global Partners A G P as agent pursuant to which we may issue and sell our common shares having an aggregate offering price of up to 10 million from time to time through A G P As of September 17 2025 we have sold an aggregate of 42 729 common shares pursuant to the Sales Agreement at an average price of 5 93 per share
We have an effective Form S 3 registration statement File No 333 273347 filed under the Securities Act of 1933 as amended with the SEC using a shelf registration process Under this shelf registration process we may from time to time sell our common shares preferred stock and warrants to purchase common shares and of two or more of such securities in one or more offerings for an aggregate initial offering price of 200 million including amounts sold under the Sales Agreement
In April 2020 we and our subsidiaries Pluri Biotech and Pluristem GmbH executed the EIB Finance Agreement for non dilutive funding of up to 50 million in the aggregate payable in three tranches The proceeds from the EIB Finance Agreement were intended to support our R D in the European Union to further advance our regenerative cell therapy platform and to bring the products in our pipeline to market 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 We are currently in advanced discussions with the EIB regarding a potential restructuring of the EIB Loan terms which are currently focused on the new terms of the EIB Loan including an extension of the current maturity date of the EIB Loan However there is no certainty as to the outcome of these discussions As of June 30 2025 the interest accrued was in the amount of approximately 3 27 million In addition to the interest payable the EIB is also entitled to royalty payments pro rated to the amount disbursed from the EIB Loan on our consolidated revenues beginning in the fiscal year 2024 up to and including its fiscal year 2030 in an amount equal to up to 2 3 of our consolidated revenues below 350 million 1 2 of our consolidated revenues between 350 million and 500 million and 0 2 of our consolidated revenues exceeding 500 million As of June 30 2025 we had an accrued royalty in the amount of 12 thousand Since the initial funding period under the EIB Finance Agreement ended on December 31 2022 we do not expect to receive additional funds pursuant to the EIB Finance Agreement
On January 23 2025 we entered into the Securities Purchase Agreement with a company wholly owned by Mr Alexandre Weinstein the Investor relating to a private placement offering the Offering of i 1 383 948 of our common shares par value 0 00001 per share ii pre funded warrants the Pre Funded Warrants to purchase up to 26 030 common shares and iii warrants the Common Warrants to purchase up to 84 599 common shares On April 25 2025 we entered into an amendment to the Securities Purchase Agreement pursuant to which we and the Investor agreed to exchange 976 139 of the common shares for additional Pre Funded Warrants to purchase up to 976 139 common shares The Offering price per share and accompanying warrant was 4 61 The Pre Funded Warrants have an exercise price of 0 0001 per share are exercisable at any time following the receipt of certain approvals from our shareholders which is required by the applicable rules of the Nasdaq Capital Market and until exercised in full The Common Warrants have an exercise price of 5 568 per share are exercisable following the receipt of approval from our shareholders and will be exercisable for three years following the date of receipt of such approval Such approval for the exercise of Pre Funded Warrants and Common Warrants was sought and obtained at our 2025 Annual Meeting on June 30 2025 The Pre Funded Warrants and Common Warrants contain customary anti dilution provisions and were subject to a 19 99 beneficial ownership limitation until the approval from our shareholders was obtained The Securities Purchase Agreement contains customary representations and warranties and agreements of the Company and the Investor and customary indemnification rights and obligations of the parties
On March 13 2025 we entered into a Share Purchase Agreement effective as of March 12 2025 the Share Purchase Agreement with Chutzpah a company wholly owned by Mr Alexandre Weinstein and Plantae a corporation controlled by Mr Weinstein collectively the Seller pursuant to the terms of a term sheet entered into on January 23 2025 Pursuant to the Share Purchase Agreement on April 28 2025 the Seller i sold to us 400 000 ordinary shares and 175 000 preferred seed 1 shares representing approximately 79 of the equity of Kokomodo the Purchased Interest and ii transferred assigned and conveyed in favor of the Purchaser a convertible loan pursuant to the Assignment Agreement reflecting a principal aggregate amount of 0 5 million
On February 3 2025 we entered into an additional Securities Purchase Agreement with Merchant Adventure Fund L P an existing investor of the Company relating to a private placement offering the Second Offering of i 759 219 of our common shares par value 0 00001 per share and ii warrants to purchase up to 45 553 common shares The Second Offering price per share and accompanying warrant is 4 61 The Second Offering warrants have an exercise price of 5 568 per share and a term of three years commencing on the date of issuance On March 19 2025 the Second Offering closed and the Company received gross proceeds in the amount of 3 5 million which it intends to use for working capital and general corporate purposes
According to the IIA grant terms we are required to pay royalties at a rate of 3 on sales of products and services derived from technology developed using this and other IIA grants until 100 of the dollar linked grants amount plus interest are repaid In the absence of such sales no payment is required Through June 30 2025 total grants obtained from the IIA aggregated to approximately 28 2 million and total royalties paid and accrued amounted to 179 thousand
The IIA may impose certain conditions on any arrangement under which the IIA permits the Company to transfer technology or development out of Israel or outsource manufacturing out 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
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 These next generation multi species genome editing products for human plant and animal DNA have applications in the pharmaceutical agriculture and aquaculture industries CRISPR IL is funded by the IIA with a total budget of approximately 10 million of which an amount of approximately 480 thousand was a direct grant allocated to us for the initial period of 18 months During October 2021 we received approval for an additional grant of approximately 583 thousand from the IIA pursuant to the CRISPR IL consortium program for an additional period of eighteen months During January 2023 we received approval for an extension of an additional 2 months to finish the program until June 30 2023 The CRISPR IL consortium program does not include any obligation to pay royalties
On October 28 2024 we announced that the IIA will fund our collaboration with the BIRAD to support the continued development of MAIT cells for the treatment of solid tumors As part of this collaboration novel CCR developed by Prof Cohen will be integrated into our CAR MAIT cell therapy platform to enhance tumor specificity and therapeutic efficacy The collaboration leverages our proprietary MAIT cell technology alongside BIRAD s expertise in engineering clinically optimized T cell modification vectors The IIA has committed to fund the collaboration for an initial term of one year with an option to extend for an additional year subject to IIA approval The total approved budget for the first year is NIS 549 067 approximately 163 000
On September 6 2022 we announced that a 7 5 million non dilutive grant from the European Union s Horizon program was awarded to the PROTO an international collaboration led by Charité The goal of the PROTO project is to utilize our PLX PAD cells in a Phase I II study for the treatment of mild to moderate knee osteoarthritis
In June 2025 the clinical study was approved by the PEI The study is conducted at Charité together with an international consortium and under the leadership of Professor Tobias Winkler Principal Investigator at the Berlin Institute of Health Center of Regenerative Therapies Julius Wolff Institute and Center for Musculoskeletal Surgery
We have accumulated a deficit of 443 055 000 since our inception in May 2001 We do not anticipate generating 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
As of June 30 2025 our cash balances cash and cash equivalents short term bank deposits restricted cash and restricted bank deposits totaled to 21 914 000 We are addressing our liquidity issues by implementing initiatives to allow the continuation of our activities Our current operating plan includes various assumptions concerning the level and timing of cash outflows for operating activities and capital expenditures which includes a cost reduction plan should it be unable to raise sufficient additional capital
Our ability to successfully carry out our business plan is primarily dependent upon our ability to 1 obtain sufficient additional capital 2 enter licensing or other commercial partnerships and collaboration agreements 3 provide CDMO services to clients 4 finalize discussions with the EIB regarding loan restructuring and 5 receive other sources of funding including non diluting sources such as grants There 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 unable to obtain the required level of financing our operations may need to be scaled down or discontinued
According to management estimates we do not have sufficient resources to meet our operating obligations for at least twelve months from the issuance date of our consolidated financial statements which was September 17 2025 These conditions raise substantial doubt about our ability to continue as a going concern
The discussion and analysis of our financial condition and results of operations is based on our financial statements which we prepared in accordance with U S GAAP The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as the reported revenues and expenses during the reporting periods We evaluate such estimates and judgments on an ongoing basis including those described in greater detail below We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances Actual results may differ from these estimates under different assumptions or conditions
Share based compensation is considered a critical accounting policy because of the significant expenses of RSUs which were granted to our employees directors and consultants In fiscal year 2025 we recorded share based compensation expenses related to options restricted shares RS and RSUs in the amount of 2 143 000
In accordance with ASC 718 RSUs granted to employees and directors are measured at their fair value on the grant date All RSUs granted in fiscal years 2025 and 2024 were granted for no consideration Therefore their fair value was equal to the share price at the date of grant The RSUs and RS granted in fiscal year 2025 to non employee consultants were measured at their fair value on the grant date in accordance with ASU No 2018 07 Compensation Share Compensation
The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in our consolidated statements of operations We have graded vesting based on the accelerated method over the requisite service period of each of the awards The expected pre vesting forfeiture rate affects the number of the shares Based on our historical experience the pre vesting forfeiture rate per grant is 16 for the shares granted to employees and 0 for the shares granted to our directors and officers and non employee consultants
We allocate the fair value of purchase consideration to the tangible assets acquired liabilities assumed and intangible assets acquired based on their estimated fair value The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill Such valuations require our management to make significant estimates and assumptions especially with respect to intangible assets Significant estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired technology and other intangible assets their useful lives and discount rates Our management s estimates of fair value are based upon assumptions believed to be reasonable but which are inherently uncertain and unpredictable and as a result actual results may differ from estimates During the measurement period which should not exceed one year from the acquisition date we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill Upon the conclusion of the measurement period any subsequent adjustments are recorded to earnings
We have audited the accompanying consolidated balance sheets of Pluri Inc and its subsidiaries the Company as of June 30 2025 and 2024 and the related consolidated statements of operations of changes in shareholders equity and of cash flows for the years then ended including the related notes collectively referred to as the consolidated financial statements In our opinion the consolidated financial statements 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 each of the years then ended in conformity with accounting principles generally accepted in the United States of America
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 in Note 1c The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty
These consolidated financial statements are the responsibility of the Company s management Our responsibility is to express an opinion on the Company s consolidated financial statements based on our audits We are a public accounting firm registered with the Public Company Accounting Oversight Board United States PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement whether due to error or fraud
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements whether due to error or fraud and performing procedures that respond to those risks Such procedures included examining on a test basis evidence regarding the amounts and disclosures in the consolidated financial statements Our audits also included evaluating the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the consolidated financial statements We believe that our audits provide a reasonable basis for our opinion
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 The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements taken as a whole and we are not by communicating the critical audit matters below providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate
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 The 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 that performing procedures related to liquidity and capital resources is a critical audit matter are the estimation and execution uncertainty regarding the Company s future cash flows and management s judgments and assumptions in estimating these cash flows to conclude the Company would not have sufficient liquidity to fund its operations for at least twelve months This in turn led to a high degree of auditor subjectivity and judgment to evaluate the audit evidence supporting the liquidity conclusions
Addressing the matter involved performing procedures and evaluating audit evidence in connection with our overall opinion on the consolidated financial statements Our audit procedures included 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 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
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 ii a high 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
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 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 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
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
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 Weinstein
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 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 preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates judgments and assumptions that are reasonable based upon information available at the time they are made 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
The U S dollar is the primary currency of the economic environment in which the Company and the Subsidiaries operate Thus the U S dollar is the Company s functional and reporting currency Accordingly non dollar denominated transactions and balances have been re measured into the functional currency 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
The consolidated financial statements include the accounts of the Company and its Subsidiaries 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 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
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
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 i training 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
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
The Company records advances from customers when cash payments from customers are received in advance of the Company s performance obligations to provide services As 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
The Company s long lived assets 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 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
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
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 The Company 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 fair value of service based share 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 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 All costs associated with research and development are expensed as incurred
Grants received from the Israel Innovation Authority or the IIA are recognized when the grant becomes receivable provided there was reasonable assurance that the Company will comply with the conditions attached to the grant and there was reasonable assurance the grant will be received The grant is deducted from the research and development expenses as the applicable costs are incurred see also note 10b
During fiscal years 2025 and 2024 the Company also received in cash non royalty bearing grants from the European Union research and development consortiums under Horizon 2020 Horizon Europe U S National Institute of Allergy and Infectious Diseases or the NIAID and from the IIA under the CRISPR IL 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 expenses
Basic and diluted loss per share is 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
Income taxes are computed using the asset and liability method 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
The Company accounts for uncertain 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
The majority of the Company s 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
The majority of the Company s agreements with employees in Israel are subject to Section 14 of the Israeli Severance Pay Law 1963 or the Severance Pay Law The Company s 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 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 been paid
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 date
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 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 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 The 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
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 twelve months are not recorded on the balance sheets
The carrying amounts of the Company s financial instruments including cash and cash equivalents restricted cash short term bank deposits and restricted bank deposits and other current assets trade payable and other accounts payable and accrued expenses approximate fair value because of their generally short term maturities
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 As 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
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
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
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 is effective for fiscal years beginning after December 15 2024 and allows adoption on a prospective basis with a retrospective option The Company is in the process of assessing the impacts and method of its adoption The Company is currently evaluating the effect that ASU 2023 09 will have on its consolidated financial statements and related disclosures
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
In July 2025 the FASB issued ASU 2025 05 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
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
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 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
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 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
On April 30 2020 the German Subsidiary 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 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 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 certain limitations such as the use of proceeds received from the EIB limitations related to disposal of assets substantive changes in the nature of the Company s business changes in holding structure distributions of future potential dividends and engaging 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
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
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
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
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
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 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 80 per share 50 vesting on June 30 2023 and 50 vesting on December 31 2023 All options were granted in January 2023 and will expire three years after the last vesting date
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 years
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
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
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
The Tax Act provided for a one time transition tax on certain foreign earnings for the tax year 2017 and taxation of Global Intangible Low Taxed Income or GILTI earned by foreign subsidiaries beginning after December 31 2017 The GILTI tax imposes a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations The Tax Act also made certain changes to the depreciation rules and implemented new limits on the deductibility of certain executive compensation paid by Pluri All losses generated after December 31 2017 can only be used to offset 80 of net income in the year they will be utilized
In January 2018 Pluri Inc registered as an Israeli resident with the Israel Tax Authority or the ITA and the Israeli Value Added Tax Authorities the VAT registration agreed to be canceled by the VAT authorities As a result as of such date Pluri Inc is classified as a dual tax resident for tax purposes both in Israel and the United States
The consolidated tax unit is filing 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 or Dollar Regulations Under the Dollar Regulations the tax liability is calculated in U S dollars according to certain orders The tax liability as calculated in dollars is translated into NIS according to the exchange rate as of June 30 of each year the fiscal tax year end of the Subsidiary
In December 2016 the Knesset Israeli Parliament issued the Law for Changing National Priorities Legislative Amendments for Achieving Budget Targets for 2017 and 2018 2017 which consists of amendment No 73 to the Law or Amendment No 73 According to Amendment No 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
The corporate tax rate applicable to the German Subsidiary is 15 which is derived from the German Corporation Tax Act and Solidarity surcharge of 5 5 from the 15 corporate tax rate 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 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
As of June 30 2025 Pluri had a U S federal net operating loss carryforward for income tax purposes in the amount of 29 798 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 2037 Net operating losses generated in tax years 2002 until 2005 expired and were reduced from the total net operating loss carryforward available
Utilization of U S net operating losses may be subject to substantial annual limitations due to the change in ownership provisions of Section 382 of the U S Internal Revenue Code of 1986 and similar state provisions The annual limitation may result in the expiration of net operating losses before utilization
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 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
The Company accounts for its income tax uncertainties in accordance with ASC 740 which clarifies the accounting for uncertainties in income taxes recognized in a Company s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return
We conducted an evaluation under the supervision of our CEO and CFO our principal executive officer and principal financial officer respectively regarding the effectiveness of our disclosure controls and procedures as defined in Rules 13a 15 e and 15d 15 e under the Exchange Act as of June 30 2025 Based on the aforementioned evaluation management has concluded that our disclosure controls and procedures were effective as of June 30 2025
Our management is responsible for establishing and maintaining adequate internal control over financial reporting Our internal control over financial reporting has been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U S GAAP
Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect transactions and dispositions of our assets provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U S GAAP and that receipts and expenditures are being made only in accordance with authorization of our management and directors and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of our assets that could have a material effect on our financial statements
Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Therefore even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
Management assessed the effectiveness of our internal control over financial reporting on June 30 2025 In making this assessment management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework in Internal Control Integrated Framework Based on that assessment under those criteria management has determined that as of June 30 2025 our internal control over financial reporting was effective
There have been no changes in our internal control over financial reporting as such term is defined in Rules 13a 15 f and 15d 15 f under the Exchange Act during the fourth quarter of fiscal year 2025 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting
Mr Aberman joined the Company in September 2005 and has served as our Chairman since January 2022 as Executive Chairman from June 2019 until December 2021 as our Co CEO from March 2017 until June 2019 as our CEO from November 2005 until March 2017 and as President of the Company from September 2005 until February 2014 When he joined the Company he changed the Company s strategy towards cellular therapeutics Mr Aberman s vision to use the maternal section of the placenta Decidua as a source for cell therapy combined with the company s 3D culturing technology led to the development of our products Since November 2005 Mr Aberman has served as a director of the Company and since April 2006 as Chairman of the Board He has 40 years of experience in marketing and management in the high technology industry Mr Aberman has held the CEO and Chairman positions of various companies located in Israel the United States Europe Japan and Korea Mr Aberman also serves as a director of our subsidiaries Pluri Biotech and Pluristem GmbH
Mr Aberman has operated within high tech global companies in the fields of automatic optical inspection network security video over IP software chip design and robotics He serves as the chairman of Rose Hitech Ltd a private investment company He previously served as the chairman of VLScom Ltd a private company specializing in video compression for HDTV and video over IP and as a director of Ori Software Ltd a company involved in data management Prior to holding those positions Mr Aberman served as the President and CEO of Elbit Vision System Ltd EVSNF OB now part of the USTER Group a company engaged in automatic optical inspection Before joining the Company Mr Aberman served as President and CEO of Netect Ltd a company specializing in the field of internet security software and was the co founder President and CEO of Associative Computing Ltd which developed an associative parallel processor for real time video processing He also served as Chairman of Display Inspection Systems Inc specializing in laser based inspection machines and as President and CEO of Robomatix Technologies Ltd
Mr Yanay became a director of the Company in February 2015 He has served as our President from February 2014 and as our CEO from June 2019 previously serving as Co CEO from March 2017 In addition Mr Yanay serves as a director of our subsidiaries namely Pluri Biotech and Pluristem GmbH and as both Chairman and director of Ever After Foods Coffeesai and Kokomodo Mr Yanay has served in various executive positions in Pluri since 2006 including as our CFO from November 2006 until February 2014 and from February 2015 until March 2017 He also served as our Chief Operating Officer from February 2014 until March 2017 From November 2006 to February 2014 he served as our Secretary and served as our Executive Vice President from March 2013 until February 2014 From 2015 to 2018 Mr Yanay served as the Co Chairman of Israel Advanced Technology Industries IATI the largest umbrella organization representing Israel s high tech and life science industries and since August 2012 has continually served as a Director of IATI representing Israel s life sciences industry Prior to joining the Company Mr Yanay founded the Israeli Life Science Forum and also served as the CFO of Elbit Vision Systems Ltd a public company In addition from July 2010 to April 2018 he served on the board of directors of Elbit Vision Systems Ltd Prior to these positions Mr Yanay served as manager of audit groups of the technology sector at Ernst Young Israel
Ms Zalts joined the Company in December 2022 and served as director of finance until September 2024 Effective as of October 2024 Ms Zalts serves as the Company s CFO and Treasurer Ms Zalts currently serves as a director of our subsidiaries Ever After Foods Pluristem GmbH and Kokomodo and a director of Haifa International Stadium Co Ltd from June 2020 From March 2018 to November 2022 Ms Zalts served as a CFO of Matics Manufacturing Analytics Ltd a SaaS high tech company based in Israel From October 2008 to February 2018 Ms Zalts worked at Ernst Young Israel and between 2014 and 2018 served as a manager of audit groups relating to public and private companies in the high tech department Ms Zalts holds a bachelor s degree in economics and business management from Haifa University a degree in accounting from Bar Ilan University and is a certified public accountant in Israel
Mr Levi became a director of the Company in June 2021 Mr Levi is the Founder and President of Catalyst Group International LLC where since 2009 he has provided consulting services relating to strategic planning to notable clients in the private and public sectors From 2004 to 2006 he served as Senior Deputy General and Head of Marketing Administration at Israel s Ministry of Tourism He holds an MA with Honors in Political Science from The Hebrew University of Jerusalem Mr Levi also serves as a director of our subsidiary Pluri Biotech
Ms Shemesh Rasmussen became a director of the Company in January 2021 From 2021 to 2024 Ms Shemesh Rasmussen served as the Chief Commercial Officer of Octave Bioscience Inc Prior to that Ms Shemesh Rasmussen served as the Global Head of Marketing at Roche Diagnostics Information Solutions between 2018 and 2020 leading global marketing efforts for Roche s Precision Medicine and digital health solutions Between 2016 and 2018 Ms Shemesh Rasmussen worked as a consultant to several health tech companies From 2013 to 2016 she held leading roles at Oracle Health Sciences overseeing product marketing in its Global Business as well as in the Oracle Digital Health Innovation Unit Earlier in her career Ms Shemesh Rasmussen founded and served as president of Rasmussen Communication Inc She also spent five years at JPMorgan Chase Bank 2002 2007 as Vice President Ms Shemesh Rasmussen holds a BA in Behavioral Sciences from Ben Gurion University Ms Shemesh Rasmussen also serves as a director of our subsidiary Pluri Biotech
Mr Alexandre Weinstein became a director of the Company in February 2025 Mr Weinstein is a global investor and entrepreneur with a career spanning over two decades in the pharmaceutical biotechnology and high technology sectors Mr Weinstein is the co founder of WM Partners and has been a General Partner of WM Partners since 2016 co founder and a General Partner of Olive Tree Ventures since 2018 and a General Partner of Venterra Capital since 2018 From 1990 to 2014 Mr Weinstein was the CEO of CFR Pharmaceuticals S A Mr Weinstein is also serving as a member of the board of directors of Worthy Inc and Procaps Group S A Nasdaq PROC since 2024 and several other privately held tech companies Mr Weinstein holds a Business and Accounting degree from Pontificia Universidad Católica de Chile where he is also a certified public auditor and accountant Mr Weinstein participated in post graduate Owner President Management Program at Harvard Business School
We believe that Mr Weinstein s qualifications to sit on our Board include his years of experience in leading high growth organizations his vast skill and expertise in strategic investments and business development as well as his knowledge and familiarity with the pharmaceutical biotechnology and sustainable technology sectors
Mr Ajchenbaum became a director of the Company in September 2025 Mr Ajchenbaum is a Certified Public Accountant Israel with over 30 years of senior executive and board experience in both public and private companies Since June 2025 Mr Ajchenbaum has served as Chief Financial Officer and Deputy Chief Executive Officer of WeSure Global Tech Ltd WESR TA a public holding company traded on the Tel Aviv Stock Exchange focusing on the financial and insurance arenas From 2011 until April 2024 Mr Ajchenbaum served as Chief Financial Officer and Treasurer of Berkshire Hathaway Guard and since 2007 as a board member in most of the Guard group of companies an insurance group where he previously held the role of Chief Risk Officer and was responsible for finance accounting corporate legal investments internal audit risk management and more Earlier in his career Mr Ajchenbaum held senior finance positions including as Chief Financial Officer of Bezeq International Ltd BZQIY TA Executive Vice President of Direct Insurance Ltd DRIN TA and Finance and Organization Manager at Analyst Investment Company Ltd ANLT TA Mr Ajchenbaum also began his career as an auditor at Kesselman Kesselman currently PwC Israel Mr Ajchenbaum holds a B A in Accounting and Economics from Tel Aviv University
We believe that Mr Ajchenbaum s qualifications to sit on our Board include his extensive experience as a senior financial executive of both U S and international companies his expertise in financial reporting under U S GAAP and IFRS and his background in risk management internal controls and corporate governance His prior service as Chief Financial Officer and Treasurer of Berkshire Hathaway Guard together with his leadership roles at other publicly traded companies provide him with the financial expertise and board oversight skills necessary to contribute meaningfully to our Board and to serve as Chairman of the Audit Committee
The Board determined that the directors Zami Aberman Rami Levi Maital Shemesh Rasmussen Alexandre Weinstein and Eitan Ajchenbaum are independent as defined by the rules of the SEC and Nasdaq rules and regulations None of the independent directors has any relationship with us besides serving on our Board
Until June 30 2025 the members of our Audit Committee were Mr Birger Mr Levi and Ms Shemesh Rasmussen Mr Birger who served as the Chairman of the Audit Committee was not re elected as a director for the 2025 Annual Meeting held on June 30 2025 and his membership on the Board and Audit Committee terminated on June 30 2025 Between June 30 2025 and September 10 2025 following Mr Birger s departure our Audit Committee consisted of two independent directors and did not comply with the Audit Committee Requirements pursuant to Nasdaq Listing Rule 5605 c 2 A which requires at least three independent directors On July 2 2025 we received notice from Nasdaq granting a cure period to regain compliance by the earlier of our next annual meeting of shareholders or June 30 2026 On September 10 2025 Mr Eitan Ajchenbaum was appointed to serve as an independent director on the Board as Chairman of the Audit Committee Subsequently on September 11 2025 we received a letter from Nasdaq confirming that the Company had regained compliance with the Audit Committee Requirements
Prior to Mr Birger s departure the Board had determined that all Audit Committee members were independent as defined under SEC and Nasdaq rules and that Mr Birger qualified as an audit committee financial expert In connection with his appointment the Board determined that Mr Ajchenbaum is independent under SEC and Nasdaq rules and qualifies as an Audit Committee financial expert
The members of our Compensation Committee are Mr Levi and Mrs Shemesh Rasmussen Ms Shemesh Rasmussen is the Chairperson of the Compensation Committee The Board has determined that all of the members of the Compensation Committee are independent as defined by the rules of the SEC and Nasdaq rules and regulations The Compensation Committee operates under a written charter that is posted on our website at www pluri biotech com The primary responsibilities of our Compensation Committee include
The members of our Nominating Committee are Rami Levi and Maital Shemesh Rasmussen Mr Levi is the Chairman of the Nominating Committee The Board has determined that all of the members of the Nominating Committee are independent as defined by the rules of the SEC and Nasdaq rules and regulations The Nominating Committee operates under a written charter that is posted on our website www pluri biotech com The primary responsibilities of our Nominating Committee include
Until June 30 2025 Mr Doron Birger served as the Chairman and sole member of the Investment Committee Since Mr Birger was not re elected as a director for the 2025 Annual Meeting held on June 30 2025 his membership on the Board and Investment Committee terminated on June 30 2025 Prior to Mr Birger s departure the Board had determined that Mr Birger is an independent director under SEC and Nasdaq rules and regulations On July 2 2025 the Board approved the appointment of Maital Shemesh Rasmussen an independent director as the new member of the Investment Committee The Board further resolved that Rami Levi an independent director will be invited to attend each meeting of the Investment Committee On September 10 2025 the Board approved the appointment of Mr Ajchenbaum an independent director as the new and sole member of the Investment Committee
The Nominating Committee is responsible for developing and approving criteria with Board approval for candidates for Board membership The Nominating Committee is responsible for overseeing the composition and size of the Board developing qualification criteria for Board members and actively seeking interviewing and screening individuals qualified to become Board members for recommendation to the Board and for recommending the composition of the Board for each of the Company s annual meetings The Board as a whole is responsible for nominating individuals for election to the Board by the shareholders and for filling vacancies on the Board that may occur between annual meetings of the shareholders
Nominees for director will be selected on the basis of their integrity business acumen knowledge of our business and industry age experience diligence conflicts of interest and the ability to act in the interests of all shareholders No particular criteria will be a prerequisite or will be assigned a specific weight nor does the Company have a diversity policy The Company believes that the backgrounds and qualifications of its directors considered as a group should provide a composite mix of experience knowledge and abilities that will allow the Board to fulfill its responsibilities
We have never received communications from shareholders recommending individuals to any of our independent directors Therefore we do not yet have a policy regarding the consideration of any director candidates recommended by shareholders In fiscal year 2025 we did not pay a fee to any third party to identify or evaluate or assist in identifying or evaluating potential nominees for our Board We have not received any recommendations from shareholders for Board nominees All of the nominees for election at the 2025 meeting of shareholders were current members of our Board at that time
Our Code of Business Conduct and Ethics is posted on our Internet website at www pluri biotech com The information on our website is not incorporated by reference in this Annual Report We intend to satisfy the disclosure requirement under Item 5 05 of Form 8 K regarding amendment to or waiver from a provision of our Code of Conduct by posting such information on the website address specified above
We have adopted an insider trading policy governing the purchase sale and other transactions in our securities that applies to our directors officers employees consultants contractors and other related persons of the Company and its Subsidiaries including family members members of their household as well as the Company itself
The insider trading policy prohibits the unauthorized disclosure of any nonpublic information acquired in the workplace and the misuse of material nonpublic information in securities trading Specifically the insider trading policy prohibits i engagement in any transaction involving the purchase or sale of the Company s securities during certain periods while holding material nonpublic information and ii tipping of any material nonpublic information where such information may be used for profit by trading in the Company s securities Pursuant to the insider trading policy nonpublic information relating to the Company is the property of the Company and the unauthorized disclosure of such information is forbidden
We have reviewed all forms provided to us or filed with the SEC and based on that review we believe that all Section 16 a filings during the past fiscal year were filed on a timely basis and that all directors executive officers and 10 beneficial owners have fully complied with such requirements during the past fiscal year other than a Form 3 filed by Alexandre Weinstein on February 18 2025 and a Form 4 filed by Alexandre Weinstein and Chutzpah as a joint filer on July 1 2025
We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment as a result of resignation retirement change in control or a change of responsibilities following a change in control except for the following i in the event of termination of Mr Yanay employment he is entitled to a severance payment under Israeli law that equals a month s compensation for each twelve month period of employment or otherwise providing services to the Company and an additional adjustment fee that equals the monthly base salary multiplied by six plus the number of years the employment agreement is in force from September 12 2018 but in any event no more than nine months in the aggregate and ii in the event of termination of Ms Zalts employment she is entitled to a severance payment under Section 14 of the Israeli Severance Pay Law 1963 or the Severance Pay Law
In addition Mr Yanay and Ms Zalts are entitled to acceleration of the vesting of their options and RSUs in the following circumstances 1 if we terminate their employment for a reason other than cause as may be defined in each respective agreement they will be entitled to acceleration of 100 of any unvested awards and 2 if they resign they will be entitled to acceleration of 50 of any unvested award subject to the approval of the Board In addition Mr Yanay and Ms Zalts are also entitled to acceleration of 100 of any unvested award in case of our change in control as defined in their respective employment agreements
We have no arrangements or plans except for those we are obligated to maintain pursuant to the Israeli law under which we provide pension retirement or similar benefits for directors or executive officers Our directors and executive officers may receive share options RSUs or RS at the discretion of our Board in the future
For all directors the vesting of directors share options RSUs and RS accelerate in the following circumstances 1 if the director is not re nominated to serve on the Board or the director is not re elected by stockholders at a special or annual meeting this will result in the acceleration of 100 of any unvested award and 2 the voluntary resignation of a director will result in the acceleration of up to 50 of any unvested award subject to Board approval In addition a change in control will result in the acceleration of 100 of any unvested award of our directors
Mr Aberman serves as our Chairman of the Board and on January 1 2023 we entered into a new consulting agreement or the New Agreement with Mr Aberman pursuant to which Mr Aberman currently receives a yearly gross amount of 116 000 plus VAT as applicable in Israel payment is made on a monthly basis Mr Aberman is also entitled Subject to Board s discretion a special bonus payment of up to 75 000 for extraordinary performance or special efforts devoted on behalf of the Company In addition the Board or the Board s Compensation Committee may decide to grant Mr Aberman with other bonuses at the Board discretion Mr Aberman is also entitled to a monthly car expenses reimbursement of NIS 4 000
Other than as described above we have no present formal plan for compensating our directors for their service in their capacity as directors Directors are entitled to reimbursement for reasonable travel and other out of pocket expenses incurred in connection with attendance at meetings of our Board as per policy approved by our Compensation Committee The Board may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director
The following table sets forth certain information to the best knowledge and belief of the Company as of September 16 2025 unless provided herein otherwise with respect to holdings of our common shares by 1 each person known by us to be the beneficial owner of more than 5 of the total number of our common shares outstanding as of such date 2 each of our directors 3 each of our named executive officers and 4 all of our directors and our executive officers as a group
Shares subject to options warrants or right to purchase or through the conversion of a security currently exercisable or convertible or exercisable or convertible within 60 days are reflected in the table above and are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants but are not deemed outstanding for purposes of computing the percentage ownership of any other person
At our annual meeting of our shareholders held on May 31 2016 our shareholders approved the 2016 Plan On March 12 2025 and on March 13 2025 the Compensation Committee of the Board and the Board respectively adopted the Amended and Restated 2016 Equity Compensation Plan or the 2016 Plan which was thereafter approved by our shareholders at the 2025 Annual Meeting Under the 2016 Plan Awards as defined therein may be granted to our officers directors employees and consultants or the officers directors employees and consultants of our direct and indirect subsidiaries The 2016 Plan permits the issuance of a share options RS and RSUs that qualify under Section 102 of the Israeli Tax Ordinance New Version 1961 the ITO b share options that do not qualify under section 422 of the Internal Revenue Code of 1986 as amended c RS and RSUs and d share options RS and RSUs that qualify under Section 3 i of the ITO Under the 2016 Plan the plan administrator is authorized to grant awards to acquire common shares RS and RSUs in each calendar year in a number not exceeding 2 75 of the number of our common shares issued and outstanding on a fully diluted basis on the immediately preceding December 31
In addition at our annual meeting of our shareholders held on June 13 2019 our shareholders approved the 2019 Plan Under the 2019 Plan options RS and RSUs may be granted to our officers directors employees and consultants or the officers directors employees and consultants of our direct and indirect subsidiaries Under the 2019 Plan the plan administrator is authorized to grant options to acquire common shares RS and RSUs in a number not exceeding 16 of the number common shares issued and outstanding immediately prior to the grant of such awards on a fully diluted basis
On March 13 2025 we and Pluri Biotech entered into the Share Purchase Agreement effective as of March 12 2025 with Chutzpah a company wholly owned by Mr Weinstein a director of the Company and Plantae a corporation controlled by Mr Weinstein pursuant to which on April 28 2025 the Seller sold to the Purchaser the Purchased Shares representing approximately 79 of the equity of Kokomodo for an aggregate purchase price of 4 5 million payable in the Consideration Shares
Except for the Kokomodo Transaction and the arrangements described in Item 11 during fiscal years 2025 and 2024 we did not participate in any transaction and we are not currently participating in any proposed transaction or series of transactions in which the amount involved exceeded the lesser of 120 000 or one percent of the average of our total assets at year end for the last two completed fiscal years and in which to our knowledge any of our directors officers five percent beneficial security holders or any member of the immediate family of the foregoing persons had or will have a direct or indirect material interest
Audit Fees These fees were comprised of i professional services rendered in connection with the audit of our consolidated financial statements for our Annual Report on Form 10 K ii the review of our quarterly consolidated financial statements for our quarterly reports on Form 10 Q and iii audit services provided in connection with other regulatory or statutory filings
Audit Related Fees During the year ended June 30 2025 these fees were comprised of fees related to due diligence services related to the Kokomodo Transaction During the year ended June 30 2024 these fees were comprised of fees related to the consents related to our Form S 3 filings consents related to our Form S 8 filings and fees related to the annual comfort letter relating to an At The Market agreement we entered into in July 2020 with Jeffries LLC which was terminated in September 2023

Company Name	Pluri Inc. Vist SEC web-site
Category	BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES)
Trading Symbol	PLUR