Annual Report for Fiscal Year Ending December 31, 2024 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information necessary to understand our audited consolidated financial statements for the years ended December 31, 2024 and December 31, 2023 and highlight certain other information which, in the opinion of management, will enhance a reader's understanding of our financial condition, changes in financial condition and results of operations. In particular, the discussion is intended to provide an analysis of significant trends and material changes in our financial position and the operating results of our business during the year ended December 31, 2024, as compared to the year ended December 31, 2023.

This discussion should be read in conjunction with our consolidated financial statements for the years ended December 31, 2024 and December 31, 2023 and related notes included elsewhere in this Annual Report on Form 10-K. These historical financial statements may not be indicative of our future performance. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains numerous forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described throughout this filing, particularly in "Item 1A. Risk Factors."

All monetary amounts are expressed in thousands of US dollars (unless stated otherwise), except for share and loss per share amounts. On September 20, 2024, we implemented a 1-for-10 reverse stock split (the "Reverse Split") of its authorized and outstanding shares of Common Stock. All share and per share amounts in these financial statements have been retroactively adjusted to reflect the Reverse Split as if it had been effected prior to the earliest financial statement period included herein.

Corporate Overview

We are a global biotech company working to unlock the promise of cell and gene therapies ("CGTs") in an affordable and accessible offering. CGTs can use the patient's own cells (autologous) or use donor cells (allogenic), and, for regulatory purposes, are classified as Advanced Therapy Medicinal Products ("ATMPs"). We are primarily focused on pioneering a paradigm-shifting decentralized approach to CGT therapies utilizing an automated and/or closed approach validated for compliant production at or near the patient care site ("Decentralized Cell Processing or DCP Platform"). This approach has the potential to overcome the limitations of traditional centralized processing methods due to their complex logistics and inefficient unscalable processing methods leading to cost prohibitive products that currently limit the number of patients that can have access to these therapies.

CGTs are costly and complex to produce. We also refer to CGTs as "living drugs" since they are based on maintaining the cell's vitality. Therefore, there is no possibility to sterilize the products, since such a process involves killing any living organism. Many of these therapies require sourcing of the patient's cells, engineering them in a sterile environment and then transplanting them back to the patient (so-called "autologous" CGT). This presents multiple logistic challenges as each patient requires their own production batch, and the current processes involve complex laboratory-based types of manipulations requiring highly trained lab technicians.

To overcome these challenges, we have designed and implemented our DCP Platform - a scalable hub and spoke infrastructure of analytical centers overseeing standardized production platforms, technology and services governed by a central quality system, focusing on replicability and standardization of infrastructure and equipment with centralized monitoring and data management.

Features of the DCP Platform include a locally implemented quality system, Standard Operating Procedures (SOPs), Good Manufacturing Practices ("GMP"), training procedures, quality-control testing and hub oversight of the actual production. We are leveraging our unique approach to therapy production using our DCP Platform and various manufacturing platforms to address some of the quality, supply chain, scale-up and production challenges, adapting these therapies to validated manufacturing platforms that are adapted to standardized production units that can be placed quickly and a low cost throughout our DCP network.

Our activity is based on partnerships with hospital, research centers and leading centers of excellence for the supply of products. Partnerships include both developing or adapting potential cell and gene therapies to the platform and providing our own standardized production platforms on a commercial basis.

Over the past year, we have focused on validating advanced production platforms for various cell types. These platforms are designed to deliver high-quality, regulatory-compliant cell and gene therapies through a decentralized, automated, and scalable approach, significantly reducing costs and time-to-market. With integrated quality control and regulatory compliance features, they ensure the highest standards of safety and efficacy, enabling faster and more efficient delivery of CGT treatments to patients. We are working to commercialize these platforms by targeting healthcare institutions and industry partners. Our business strategy includes out-licensing, related services and shared revenue opportunities.

Furthermore, we are expanding our pipeline of innovative therapies specifically designed to optimize and align with our production platforms. We believe that DCP platform addresses many of the challenges facing the supply of CGT, such as production capacity, logistics and efficient availability. The platforms target significantly lower production costs and potentially allow us to make progress toward our vision of improved access and outcomes in healthcare.

While the biotech industry struggles to determine the best way to lower costs of goods and enable CGTs to scale, the scientific community continues to advance and push the development of such therapies to new heights. Clinicians and researchers are excited by all the new tools such as new generations of industrial viruses, big data analysis for genetic and molecular data and technologies including CRISPR, mRNA, etc. available, often at a low cost, to perform advanced research in small labs. Most new therapies arise from academic institutes or small spinouts from such institutes. Though such research efforts may manage to progress into a clinical stage, utilizing lab based or hospital-based production solutions, they lack the resources to continue the development of such drugs to market approval. Historically, drug/therapeutic development has required investments of hundreds of millions of dollars to be successful. One significant cause for the high cost is that each therapy often requires unique production facilities and technologies that must be subcontracted or designed and built based on expensive subcontracting services. Further, the cost of production during the clinical stage is extremely expensive. Given these financial restraints, researchers and institutes hope to out- license their therapeutic products to large biotech companies or spin-out new companies which is usually an option at a de-risked stage

In addition, we are developing our pipeline of advanced therapies with the goal of entering into out-licensing agreements for these therapies.

Our platform may also be utilized by other parties, such as biotech companies and hospitals for the supply of their products.

The ability to produce these products at low cost allows for an expedited development process, and the partnership with hospitals around the globe enables joint grants and lower cost of clinical development. We also review many therapies available for out licensing and select the ones which we believe have the highest market potential, can benefit the most from a point of care approach and have the highest chance of clinical success. We assess such issues by utilizing its global POCare Network and our internal knowhow accumulated over a decade of involvement in the field.

To summarize: We in-license to quickly adapt therapies to a point-of-care approach through regional partnerships, and we out-license our therapies for market approval in preferred geographical regions. This approach lowers overall development cost, through minimizing pre-clinical development costs incurred by us, and through receiving of the additional funding from grants and/or payments by regional partners.

Orgenesis subsidiaries

The following is a description of our subsidiaries, all of which are wholly owned, and their area of expertise:

	●	Koligo Therapeutics, Inc., a Kentucky corporation, which is a regenerative medicine company, specializing in developing personalized cell therapies. It is currently focused on commercializing its metabolic pipeline via the POCare Network throughout the United States and in international markets.
	●	Orgenesis CA, Inc. a Delaware corporation, which is currently focused on development of our technologies and therapies in California.
	●	Orgenesis Switzerland Sarl, which is currently focused on providing group management services.
	●	MIDA Biotech BV, which is currently focused on research and development activities, was granted a 4 million Euro grant under the European Innovation Council Pathfinder Challenge Program which supports cutting-edge science and technology. The grant is for technologies enabling the production of autologous induced pluripotent stem cells (iPSCs) using microfluidic technologies and artificial intelligence (AI).
	●	Orgenesis Italy SRL which is currently focused on R&D activities.

	●	Orgenesis Ltd., an Israeli subsidiary which is focused on R&D and a provider of R&D management services for out licenced products. (Declared bankrupt by Israeli district court in August 2025.
	●	Orgenesis Austria GmbH, which is currently focused on the development of the Company's technologies and therapies.
	●	Octomera LLC, a Delaware corporation, which specializes in providing processing services within the Orgenesis group and to third party customers. Octomera's current operating subsidiaries, all of which are wholly owned, are:
	●	Orgenesis Maryland LLC, which is the center of POCare Services activity in North America and is currently focused on setting up and providing POCare Services and cell-processing services to the POCare Network.
	●	Tissue Genesis International LLC, a Texas limited liability company currently focused on development of our technologies and therapies.
	●	Orgenesis Germany GmbH, a German entity.
	●	Theracell Laboratories IKE ("Theracell Labs"), a Greek company currently focused on expanding our POCare Network.
	●	ORGS POC CA Inc, which is currently focussed on expanding our POCare Network in California.
	●	Octo Services LLC, a Delaware entity.

Services provided by Octomera include:

	●	Process development of therapies, process adaptation, and optimization inside the DPU & O";
	●	Adaptation of automation and closed systems to serviced therapies;
	●	Incorporation of the serviced therapies compliant with GMP in the DPU & O s;
	●	Tech transfers and training of local teams for the serviced therapies at the POCare Centers;
	●	Processing and supply of the therapies and required supplies under GMP conditions within our POCare Network, including required quality control testing; and
	●	Contract Research Organization services for clinical trials.

The POCare Services are performed in decentralized hubs that provide harmonized and standardized services to customers, or POCare Centers. We are working to expand the number and scope of our POCare Centers with the intention of providing an efficient and scalable pathway for CGT therapies to reach patients rapidly at lowered costs. Our POCare Services are designed to allow rapid capacity expansion while integrating new technologies to bring together patients, doctors and industry partners with a goal of achieving standardized, regulated clinical development and production of therapies.

During 2024, liquidation activities at the following subsidiaries commenced (See note 20):

	●	Orgenesis Korea Co. Ltd
	●	Orgenesis Biotech Israel Ltd
	●	Orgenesis Australia PTY LTD
	●	Orgenesis Belgium SRL
	●	Orgenesis Services SRL

Significant Developments During Fiscal 2024

On January 29, 2024, ("date of reconsolidation"), we and an affiliate of Metalmark Capital Partners ("Metalmark" or "MM") entered into a Unit Purchase Agreement (the "UPA"), pursuant to which we acquired all the preferred units of Octomera owned by MM (the "Acquisition"). As a result of the acquisition, we therefore now own 100% of the equity interests of Octomera. We had previously deconsolidated Octomera from our consolidated financial statements. Pursuant to the acquisition, MM and us further agreed to the following:

1.

Consideration:

	●	Royalty Payments: If Octomera and its subsidiaries generate Net Revenue during the three-year period 2025-2027, then we will pay 5% of Net Revenues to MM pursuant to the MM UPA.
	●	Milestone Payments: If we sell Octomera within ten years from the date of the Closing at a price that is more than $40 million excluding consideration for certain Excluded Assets as per the UPA, we shall pay MM 5% of the net proceeds.

2.

MM's designated members of the Board of Managers of Octomera resigned and the we amended the Second Amended and Restated Limited Liability Company Agreement of Octomera (the "Octomera LLC Agreement") to be a single member agreement reflecting the transactions consummated under the UPA, such that MM no longer (i) is a member of Octomera or a party to the Octomera LLC Agreement, or (ii) has a right to appoint members of the board of managers of Octomera.

Additionally, pursuant to an extension agreement signed between us and MM on January 28, 2024, the maturity date of certain loans that MM had lent to us in the amount of $2,600 was extended to January 28, 2034.

On February 14, 2024, following a claim for payment by employees of OBI (a fully owned subsidiary of Octomera) of past salaries due, the district court in Haifa, Israel appointed a trustee to run the affairs of OBI. As a result of this appointment, effective February 14, 2024, we no longer controlled OBI and ceased to consolidate the results of OBI into our consolidated results. We recognized a loss as a result of the deconsolidation of $66. We did not believe that rehabilitation of OBI was possible, and we purchased certain of OBI's equipment.

On March 3, 2024, we entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which we agreed to issue and sell, in a private placement, 227,272 shares of our Common Stock at a purchase price of $10.3 per share, Warrants to purchase up to 227,272 shares of Common Stock at an exercise price of $15.0 per share, and Warrants to purchase up to 227,272 shares of Common Stock at an exercise price of $20.0 per share, all such Warrants exercisable immediately and expiring five years from the date of their issuance. We received gross proceeds of approximately $2,300 before deducting related offering expenses. The Offering closed on March 5, 2024.

On April 5, 2024, we entered into an Asset Purchase and Strategic Collaboration Agreement (the "Purchase Agreement") with Griffin Fund 3 BIDCO, Inc. ("Germfree"), for the sale by us of five OMPULs to Germfree, which were to be incorporated into Germfree's lease fleet and leased back to us or to third-party lessees designated by us. Pursuant to the Purchase Agreement, and subject to the terms and conditions set forth therein, in consideration for the purchase of the OMPULs, the Orgenesis Quality Management Systems Framework ("OQMSF") and related intellectual property rights, Germfree agreed to pay us an aggregate purchase price of $8,340 subject to adjustment through a verification mechanism set forth in the Purchase Agreement. Pursuant to the Purchase Agreement, Germfree has paid us $6,720 as of December 31, 2024.

Pursuant to the Purchase Agreement, Germfree agreed to exclusively manufacture and distribute OMPULs and supply us with OMPULs for use worldwide for ten years (the "Term"), under a license to all OMPUL-related intellectual property owned by us.

On November 5, 2024, Germfree notified us of its intention not to lease any OMPULS back to us. Germfree confirmed that it had satisfied its obligations to us under the Purchase Agreement, and we therefore do not expect to receive any further payments thereunder. [COMPANY TO DESCRIBE LAWSUIT AND SETTLEMENT]

On May 10, 2024, we entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which we agreed to issue and sell, in a private placement, 15,000 shares of our Common Stock at a purchase price of $10.3 per share, Warrants to purchase up to 15,000 shares of Common Stock at an exercise price of $15.0 per share, and further Warrants to purchase up to 15,000 shares of Common Stock at an exercise price of $20.0 per share, all such Warrants exercisable immediately and expiring five years from their date of issuance. We received gross proceeds of approximately $154 before deducting related offering expenses. The Offering closed on May 10, 2024.

On May 21, 2024 we entered into debt exchange agreements with three convertible debt holders pursuant to which a total of $16,007 of outstanding principal and accrued interest was exchanged for the right to receive an aggregate of 1,577,695 shares of common stock, par value $0.0001 per share, of our Common Stock, of which $14,860 was exchanged for shares at an exchange price of $10.3 per share of Common Stock and $1,147 was exchanged for shares at an exchange price of $8.5 per share of Common Stock.

On July 10, 2024, we entered into an Asset Purchase Agreement (the "Purchase Agreement") with Broaden Bioscience and Technology Corp. ("Broaden") for the purchase by the Company of the following assets (the "Assets"): The process and algorithms developed by Broaden for processing CAR-T, RACE CAR-T and all oncology products that will enable us to develop and sell treatments to third parties, which include Broaden's rights, title and interests in and to all intellectual property, including, but not limited to, patents, patent applications, know-how, materials, licenses, permits and approvals related thereto. Pursuant to the Purchase Agreement, in consideration for the purchase of the Assets, we will pay Broaden an amount equal to the value of the Assets established by a third party valuation firm not to exceed $11,000 (the "Consideration"), less a debt adjustment relating to $10,767 owed to us by Broaden for work performed and invoiced between August 2022 and May 2023 (the "Debt"), as detailed in the Purchase Agreement. The Consideration that exceeds the Debt will be payable at our election in shares of our common stock at a price of $30.0 per share or 10% above the market price at such time it is paid, whichever is higher, or a note with amortization in 24 months from the date of the Purchase Agreement, including prepayment provisions.

On July 12, 2024, we entered into an Asset Purchase Agreement (the "Purchase Agreement") with Theracell Advanced Biotechnology S.A, Theracell Advanced Biotechnology LTD and IDNA Genomics Public Limited (collectively, "Theracell") for the purchase by us of the following assets (the "Assets") owned by Theracell:

	●	50% of the outstanding ownership rights and equity interests in Theracell Laboratories IKE ("Theracell IKE") not currently owned by us so that we shall own 100% of the outstanding equity interests of Theracell IKE; and
	●	Certain products (the "Products"), which include: (i) the manufacturing processes, algorithms, work instructions, test methods, standard operating procedures and specifications for producing Tumor Infiltrating Lymphocytes ("TILs") that meet current Good Manufacturing Practice (cGMP) requirements that will enable the Company to potentially use this product as a platform for treating a wide variety of solid tumors; (ii) a 3rd generation GMP lentivirus production process, which is part of a therapy manufacturing process that will enable the Company to potentially treat Beta Thalassemia therapies; (iii) an oncolytic virus cell carrier platform which will enable the Company to potentially develop treatments for an array of cancers; (iv) a process for the potential treatment of mesenchymal stem cells for kidney disorders; (v) a process for controlled isolation of regenerative EVs derived from mesenchymal stem cells for the potential treatment of kidney disorders; and (vi) bioxome encapsulated APIs for improved transdermal delivery and bioavailability for the potential treatment of atopic dermatitis/wound healing; including Theracell's rights, title and interests in and to all intellectual property, including, but not limited to, patents, patent applications, know-how, materials, licenses, permits and approvals relating to Products as further described in the Purchase Agreement.

Pursuant to the Purchase Agreement, in consideration for the purchase of the Assets, we agreed to pay Theracell an aggregate purchase price of $13,000 (the "Consideration"), which is equal to the value of the Assets established by a third-party valuation firm, less a debt adjustment in the amount of $10,324 which was owed by Theracell to us (the "Debt"). The aggregate Consideration will be paid by us as follows: (i) $400 will be paid to Theracell within 60 days after signing of the Purchase Agreement, (ii) $250 will be paid to Theracell within one year after signing of the Purchase Agreement, and (iii) the remaining amount (less any Debt) will be paid to Theracell in four equal annual payments beginning on December 30, 2025 and ending on December 30, 2028. As of the date of this annual report on Form 10-K, we had paid Theracell $243.

On September 20, 2024, we implemented a 1-for-10 reverse stock split (the "Reverse Split") of our authorized and outstanding shares of Common Stock. All share and per share amounts in these financial statements have been retroactively adjusted to reflect the reverse split as if it had been effected prior to the earliest financial statement period included herein. Following the Reverse Split, the number of authorized shares of common stock that we are authorized to issue from time to time is 14,583,333 shares.

On December 20, 2024, the Liège Business Court in Belgium appointed provisional liquidators for Orgenesis Belgium SRL and Orgenesis Services SRL ("the Belgian subsidiaries"). The Belgian subsidiaries had, on November 8, 2024, petitioned the Liège Business Court to allow a judicial reorganization pursuant to Article XX.41 of the Belgian Code of Economic Law. The petition followed the inability of the Belgian subsidiaries to pay employee payroll expenses and accounts payable.

Results of Operations

Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023.

Our financial results for the year ended December 31, 2024 are summarized as follows in comparison to the year ended December 31, 2023:

		Years Ended December 31,
		2024				2023
		(in thousands)
Revenues		$	1,035			$	530
Cost of sales			1,928				6,255
Gross profit		$	(893	)		$	(5,725	)
Cost of development services and research and development expenses			9,622				10,623
Amortization of intangible assets			728				721
Change in Contingent consideration			(4,643	)			-
Selling, general and administrative expenses included credit losses of $24,367 for the year ended December 31, 2023			14,822				35,134
Share in loss of associated company			8				734
Impairment of investment			-				699
Impairment expenses			18,338				-
Operating loss		$	39,768			$	53,636
Loss from deconsolidation of subsidiaries (see note 3 and note 20)			(4,480	)			5,343
Other income			(606	)			(4	)
Loss from extinguishment in connection with loans (see note 10 a of Item 8)			5,422				283
Credit loss on convertible loan receivable			-				2,688
Financial expense, net			4,508				2,499
Convertible loans induced conversion expenses			4,304				-
Loss before income taxes		$	48,916			$	64,445
Tax expense			97				473
Net loss		$	49,013			$	64,918

Revenues

The following table shows our revenues by major revenue streams:

		Years Ended December 31,
		2024				2023
		(in thousands)
Revenue stream:
Cell process development services and hospital services		$	1,020			$	515
License fees			15				15
Total		$	1,035			$	530

Our revenues for the year ended December 31, 2024 were $1,035, as compared to $530 for the year ended December 31, 2023, representing an increase of 95%. The increase was as a result of work completed and payments received on cell processing development and hospital services. A breakdown of the revenues per customer that constituted at least 10% of revenues is as follows:

		Years Ended December 31,
		2024				2023
		(in thousands)
Revenue earned:
Customer A (United States)		$	492			$	-
Customer B (United States)			300				280
Customer C (United States)			-				90
Customer D (United States)			150				130

Expenses

Cost of Revenues

		Year Ended
		December 31, 2024				December 31, 2023
Salaries and related expenses		$	636			$	2,387
Stock-based compensation			5				4
Professional fees and consulting services			126				1,917
Raw materials			131				731
Depreciation expenses, net			654				481
Other expenses			376				735
Total		$	1,928			$	6,255

Cost of revenues for the year ended December 31, 2024 were $1,928, as compared to $6,255 for the year ended December 31, 2023, representing a decrease of 69%. The decrease was mainly attributable to reduced Octomera segment cost of revenues, particularly as a result of the deconsolidation of OBI and reduced activities at the Korean subsidiary.

Cost of development services and research and development expenses

		Year Ended
		December 31, 2024				December 31, 2023
Salaries and related expenses		$	6,300			$	4,800
Stock-based compensation			158				210
Subcontracting, professional and consulting services			745				3,662
Lab expenses			113				377
Depreciation expenses, net			620				312
Other research and development expenses			2,043				1,542
Less - grant			(357	)			(280	)
Total		$	9,622			$	10,623

Cost of development services and research and development for the year ended December 31, 2024 were $9,622, as compared to $10,623 for the year ended December 31, 2023, representing a decrease of 9%. The increase in salaries and related expenses is mainly attributable to our accounting for Octomera segment cost of development services and research and development expenses from the reconsolidation date compared to accounting for such expenses in 2023 until the deconsolidation of Octomera. Subcontracting, professional fees and consulting services declined as a result of cost savings. Other research and development expenses increased mainly as a result of the Asset Purchase Agreements referred to in Note 18.

Selling, General and Administrative Expenses

		Years Ended December 31,
		2024				2023
		(in thousands)
Salaries and related expenses		$	3,228			$	2,825
Stock-based compensation			191				249
Accounting and legal fees			2,732				3,355
Professional fees			(29	)			1,891
Rent and related expenses			2,239				161
Business development			1,801				464
Depreciation expenses, net			84				46
			3,893				1,776
Other general and administrative expenses			683				24,367
Total		$	14,822			$	35,134

Selling, general and administrative expenses for the year ended December 31, 2024 were $14,822, as compared to $35,134 for the year ended December 31, 2023, representing a decrease of 58%.

The decrease was mainly as a result of a decrease of $20,642 in credit losses incurred in the twelve months ended December 31, 2024 which were $2,725 compared to credit losses incurred of $23,367 in the twelve months ended December 31, 2023, mainly in the Octomera segment. The decrease was offset by an increase in business development expenses as a result of warrants granted to advisers.

Share in Net Loss of Associated Company

		Years Ended December 31,
		2024				2023
		(in thousands)
Share of Net Loss of Associated Company		$	8			$	734
Total		$	8			$	734

Share in net loss of associated company for the year ended December 31, 2024 was $ 8 , as compared to $734 for the year ended December 31, 2023, representing a decrease of 99%. The decrease in Share in net loss of associated company in the year ended December 31, 2024 compared to the year ended December 31, 2023 is primarily because Octomera was treated as an associated Company in 2023 from the deconsolidation date, and in 2024 it was accounted for as a controlled subsidiary from the reconsolidation date.

Loss (Profit) from deconsolidation of subsidiaries

		Years Ended December 31,
		2024				2023
		(in thousands)
Loss (Profit) from deconsolidation of subsidiaries		$	(4,480	)		$	5,343

The profit from deconsolidation of subsidiaries in the twelve months ended December 31, 2024 was as a result of the deconsolidation of OBI, Orgenesis Korea, Orgenesis Belgium and Orgenesis Services. See note 20. The loss from deconsolidation of subsidiaries in the twelve months ended December 31, 2023 was as a result of the deconsolidation of Octomera. See note 3.

Other income

		Years Ended December 31,
		2024				2023
		(in thousands)
Other income		$	(606	)		$	(4	)

The other income earned in the twelve months ended December 31, 2024 was as a result of OMPULS sold to Germfree. See note 13f.

		Years Ended December 31,
		2024				2023
		(in thousands)
Loss from extinguishment		$	5,422			$	283

The Loss from extinguishment incurred in the twelve months ended December 31, 2024 was mainly as a result of a loss from extinguishment in connection with loans (see note 10 a of Item 8)

Credit Loss on Convertible loan receivable

		Years Ended December 31
		2024				2023
		(in thousands)
Credit loss on convertible loan receivable		$	-			$	2,688

The credit loss for the year ended December 31, 2024 was $0 compared to $2,688 for the year ended December 31, 2023. This was attributable to a provision created for a credit loss on a loan created in the twelve months ended December 31, 2023.

Financial Expenses, net

		Years Ended December 31,
		2024				2023
			(in thousands)
Interest expense on convertible loans and loans			3,737				2,167
Foreign exchange loss, net			782				325
Other (income) loss			(11	)			7
Total		$	4,508			$	2,499

Financial expenses, net for the year ended December 31, 2024 were $4,508, as compared to $2,499 for the year ended December 31, 2023, representing an increase of 80%. The increase was mainly due to interest on new loan agreements entered into and finance expenses incurred on warrants issued to loan holders.

Convertible loans induced conversion expenses

		Years Ended December 31
		2024				2023
		(in thousands)
Convertible loans induced conversion expenses		$	4,304			$	-

The convertible loans induced conversion expense for the year ended December 31, 2024 was $ 4,304 compared to $0 for the year ended December 31, 2023. This was attributable to a charge generated as part of a Debt equity conversion in 2024. See note 10.

Impairment expenses

		Years Ended December 31
		2024				2023
		(in thousands)
Impairment expenses		$	18,338			$	699

Impairment expenses for the year ended December 31, 2024 were $ 18,338 compared to $0 for the year ended December 31, 2023. This was attributable to an impairment of goodwill of $1,211, property, plant and equipment of $8,752, and intangible assets of $8,375 (total impairment of approximately $18,338 million) in the twelve months ended December 31, 2024.

Tax expense

		Years Ended December 31,
		2024				2023
		(in thousands)
Tax expense		$	97			$	473
Total		$	97			$	473

Tax expense, net for the year ended December 31, 2024 were $97, as compared to $473 for the year ended December 31, 2023, representing a decrease of 79%. The increase is mainly attributable to increased tax liabilities in the U.S. Effective for years beginning after December 31, 2021, Internal Revenue Code Section 174 changed the tax treatment of research and experimentation (R&E) expenditures. While companies have historically deducted such costs for federal income tax purposes, these new rules require capitalization and prescribe cost recovery over a period of five years for research and development paid or incurred in the United States and 15 years for R&E paid or incurred outside of the United States.

Working Capital

		December 31,
		2024				2023
		(in thousands)
Current assets		$	761			$	4,076
Current liabilities		$	26,920			$	16,407
Working capital		$	(26,159	)		$	(12,331	)

Current assets decreased by $3,315 between December 31, 2023 and December 31, 2024. The decrease was mainly attributable to a decline in cash and cash equivalents, prepaid expenses, and receivables from related parties.

Current liabilities increased by $10,513 between December 31, 2023 and December 31, 2024. The increase was mainly attributable to:

	●	the reconsolidation of Octomera which included an increase in accounts payable, accrued expenses and other payables, and employees and related payables;
	●	the deconsolidation of subsidiaries where we recorded an increase in accounts payable to related parties;
	●	Additional non-convertible short term loan agreements entered into.

The above increases were offset by a decline in current maturities of convertible loans, converted to equity.

Liquidity and Capital Resources

		Years Ended December 31,
		2024				2023
		(in thousands)
Net loss		$	(49,013	)		$	(64,918	)
Net cash used in operating activities			(17,076	)			(14,837	)
Net cash used in investing activities			365				(3,707	)
Net cash provided by financing activities			15,959				13,618
Net change in cash and cash equivalents and restricted cash		$	(752	)		$	(4,926	)

During year ended December 31, 2024, we funded our operations from operations as well as from proceeds raised from equity and debt offerings.

Net cash used in operating activities for the year ended December 31, 2024 was approximately $17,076, as compared to net cash used in operating activities of approximately $14,837 for the year ended December 31, 2023. The decline was mainly as a result of a loss of $32,984 for the year ended December 31, 2024 compared to a loss of $64,918 for the year ended December 31, 2023, which is mainly related a decline in activity in the Octomera segment.

Net cash provided by investing activities for the year ended December 31, 2024 was approximately $365, as compared to net cash used in investing activities of approximately $3,707 for the year ended December 31, 2023. The change was mainly as a result of a decline in purchases of property and equipment and the cash impact from the deconsolidation of Octomera which incurred in the twelve months ended December 31, 2023 not incurred in the twelve months ended December 31, 2024.

Net cash provided by financing activities for the year ended December 31, 2024 was approximately $15,959, as compared to net cash provided by financing activities of approximately $13,618 for the year ended December 31, 2023. The change was mainly attributable to proceeds raised from equity investments and warrant exercises in the amount of $2,556 in the twelve months ended December 31, 2024 as compared to $5,283 in the twelve months ended December 31, 2023. In addition, in the twelve months ended December 31, 2024, we raised convertible loans in the amount of $75 compared to $5,735 in the twelve months ended December 31, 2023, These decreases were offset by the receipt of $6,720 from Germfree and non-convertible loans received in the amount of $6,060 in the twelve months ended December 31, 2024 compared to $635 received in the twelve months ended December 31, 2023.

Liquidity and Capital Resources Outlook

Funding Requirements and Going Concern

As of December 31, 2024, we had an accumulated deficit of $224,787 and for the year ended December 31, 2024 incurred negative operating cashflows of $17,076. As of December 31, 2024, we had cash and cash equivalents of approximately $0.1 million. We had approximately $$65.8 million in outstanding liabilities as of December 31, 2024. In September 2025, we repaid $6.3 million of this outstanding debt. Our activities have been funded by generating revenue, through offerings of our securities, and through proceeds from loans. There is no assurance that our business will generate sustainable positive cash flows to fund our business and satisfy our debt obligations.

If there are further reductions in revenues or increases in operating costs for facilities expansion, research and development, commercial and clinical activity or decreases in revenues from customers, we will need to use mitigating actions such as to seek additional financing or postpone expenses that are not based on firm commitments. In addition, in order to fund our operations until such time that we can generate sustainable positive cash flows, we will need to raise additional funds.

We expect our current and projected cash resources and commitments will not be sufficient to meet our obligations for the next 12 months, raising a substantial doubt about our ability to continue as a going concern. Our management's plans include raising additional capital to fund our operations and to repay our outstanding loans when they become due, as well as exploring additional avenues to increase revenue and reduce capital expenditures. Our ability to fund the completion of our ongoing and planned activities may be substantially dependent upon whether we can obtain sufficient funding at acceptable terms. If we are unable to raise sufficient additional capital or meet revenue targets, we may have to reduce or eliminate certain activities and reduce our headcount.

The estimation and execution uncertainty regarding the our future cash flows and our management's judgments and assumptions in estimating these cash flows is a significant estimate. Those assumptions include reasonableness of the forecasted revenue, operating expenses, and uses and sources of cash.

We intend to continue to seek delays on certain payments and explore other ways of potentially reducing expenses with the goal of preserving cash until additional financing is secured. These efforts may not be successful or sufficient in amount or on a timely basis to meet our ongoing capital requirements. We continue to actively seek additional financing. In the absence of additional sources of liquidity, we do not have sufficient existing cash resources to meet operating and liquidity needs. However, there is no assurance that we will be able to timely secure such additional liquidity or be successful in raising additional funds or that such required funds, if available, will be available on acceptable terms or that they will not have a significant dilutive effect on our existing stockholders. In addition, we are unable to determine at this time whether any of these potential sources of liquidity will be adequate to support our operations or provide sufficient cash flows to us to meet our obligations as they become due and continue as a going concern. In the event we determine that additional sources of liquidity will not be available to us or will not allow us to meet our obligations as they become due, we may need to file a voluntary petition for relief under the United States Bankruptcy Code in order to implement a restructuring plan or liquidation. In addition, substantial doubt about our ability to continue as a going concern may cause investors or other financing sources to be unwilling to provide funding to us on commercially reasonable terms, if at all. If sufficient funds are not available, we will have to delay, reduce the scope of, or eliminate some or all of our business activities, which would adversely affect our business prospects and our ability to continue our operations.

Sources of Liquidity

To date, we have funded our operations primarily with the net proceeds from the issuance of convertible loans, the issuance of convertible promissory notes, draws upon a credit facility, the issuance and sale of equity securities and revenues generated from our business. As of December 31, 2024, we have cash and cash equivalents of $78. In the future, we expect to finance our cash needs through a combination of equity and debt financing (including the credit facility described below), including with related parties.

Segregated Portfolio Convertible Loan

Pursuant to the Convertible Loan Agreement for an initial loan of $1,000,000 and credit facility of up to $10,000,000, dated as of September 10, 2025, by and among Theracell Laboratories IKE ("Theracell"), a subsidiary of Octomera LLC, which is a subsidiary of Orgenesis Inc., and Alpha Prosperity Fund SPC, acting on behalf of and for the account of Segregated Portfolio P (the "Lender"), the Lender has the option, at its sole discretion, to convert the outstanding amount of the loans (currently, $[7,083,857]) into equity of either us or Theracell, such that the Lender would hold up to 80% of the outstanding share capital of the applicable entity. The conversion of the loan into our shares is subject to shareholder approval of the issuance of the required shares. In addition, the Agreement provides that the Lender will be issued a warrant to purchase 15% of the fully diluted share capital of either us or Theracell, at the Lender's discretion, for an aggregate exercise price of $250,000 and exercisable for three years from issuance. The issuance of shares upon exercise of the warrant is likewise subject to shareholder approval of the issuance of such shares. Additional warrants would be issued in connection with each cumulative drawdown of an additional $1,000,000 under the credit facility. Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies and Estimates

Our significant accounting policies are more fully described in the notes to our financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2024. We believe that the accounting policies below are critical for one to fully understand and evaluate our financial condition and results of operations.

Income Taxes

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

In addition, our management performs an evaluation of all uncertain income tax positions taken or expected to be taken in the course of preparing our income tax returns to determine whether the income tax positions meet a "more likely than not" standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes.

Revenue from Contracts with Customers

Our agreements are primarily service contracts that range in duration. We recognize revenue when control of these services is transferred to the customer for an amount, referred to as the transaction price, which reflects the consideration to which we are expected to be entitled in exchange for those goods or services.

A contract with a customer exists only when:

●	the parties to the contract have approved it and are committed to perform their respective obligations;
●	we can identify each party's rights regarding the distinct goods or services to be transferred ("performance obligations");
●	we can determine the transaction price for the goods or services to be transferred; and
●	the contract has commercial substance, and it is probable that we will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

Nature of Revenue Streams

We have three main revenue streams, which are POCare development services, cell process development services, including hospital supplies, and POCare cell processing.

POCare Development Services

Revenue recognized under contracts for POCare development services may, in some contracts, represent multiple performance obligations (where promises to the customers are distinct) in circumstances in which the work packages are not interrelated or the customer is able to complete the services performed.

For arrangements that include multiple performance obligations, the transaction price is allocated to the identified performance obligations based on their relative standalone selling prices.

We recognize revenue when, or as, it satisfies a performance obligation. At contract inception, we determine whether the services are transferred over time or at a point in time. Performance obligations that have no alternative use and that we have the right to payment for performance completed to date, at all times during the contract term, are recognized over time. All other Performance obligations are recognized as revenues by us at point of time (upon completion).

Significant Judgement and Estimates

Significant judgment is required to identifying the distinct performance obligations and estimating the standalone selling price of each distinct performance obligation and identifying which performance obligations create assets with alternative use to us, which results in revenue recognized upon completion, and which performance obligations are transferred to the customer over time.

Cell Process Development Services

Revenue recognized under contracts for cell process development services may, in some contracts, represent multiple performance obligations (where promises to the customers are distinct) in circumstances in which the work packages and milestones are not interrelated or the customer is able to complete the services performed independently or by using our competitors. In other contracts when the above circumstances are not met, the promises are not considered distinct, and the contract represents one performance obligation. All performance obligations are satisfied over time, as there is no alternative use to the services it performs, since, in nature, those services are unique to the customer, which retain the ownership of the intellectual property created through the process.

For arrangements that include multiple performance obligations, the transaction price is allocated to the identified performance obligations based on their relative standalone selling prices. For these contracts, the standalone selling prices are based on our normal pricing practices when sold separately with consideration of market conditions and other factors, including customer demographics and geographic location.

We measure the revenue to be recognized over time on a contract-by-contract basis, determining the use of either a cost-based input method or output method, depending on whichever best depicts the transfer of control over the life of the performance obligation.

Included in Cell Process Development Services is hospital supplies revenue which is derived principally from the sale or lease of products and the performance of services to hospitals or other medical providers. Revenue is earned and recognized when product and services are received by the customer.

Revenue from POCare Cell processing

Revenues from POCare Cell processing represent performance obligations which are recognized either over, or at a point of time. The progress towards completion will continue to be measured on an output measure based on direct measurement of the value transferred to the customer (units produced).

Concentration of Credit Risk

Financial instruments that potentially subject us to concentration of credit risk consist of principally cash and cash equivalents, bank deposits and certain receivables. We held these instruments with highly rated financial institutions, and we have not experienced any significant credit losses in these accounts and does not believe that we are exposed to any significant credit risk on these instruments, except for accounts receivable. We perform ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for doubtful accounts.

Our accounts receivable accounting policy until December 31, 2022, prior to the adoption of the new Current Expected Credit Losses ("CECL") standard, created bad debts when objective evidence existed of inability to collect all sums owed it under the original terms of the debit balances. Material customer difficulties, the probability of their going bankrupt or undergoing economic reorganization and insolvency, material delays in payments and other objective considerations by management that indicate expected risk of payment were all considered indicative of reduced debtor balance value. Effective January 1, 2023, we adopted the new CECL standard.

We maintain the allowance for estimated losses resulting from the inability of our customers to make required payments. We consider historical collection experience for each of its customers and when revenue and accounts receivable are recorded. We also recognize estimated expected credit losses over the life of the accounts receivables. The estimate of expected credit losses considers not only historical information, but also current and future economic conditions and events.