[☒X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________________ to __________________________

(Address of ~~principal executive offices)~~Principal Executive Offices) (Zip Code)

Securities registered pursuant to ~~section~~Section 12(g) of the Act:
~~Common stock, par value $0.0001 per share~~None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ~~[ ]~~ ☐ No [X] ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ~~[ ]~~ ☐ No [X] ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] ☒ No ~~[ ]~~☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).
Yes [X] ☒ No ~~[ ]~~☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” ~~and~~ “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b -2 of this chapter). [ ]

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ~~[ ]~~☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes~~[ ]~~ ☐No [X]☒

~~The registrant had 10,273,644 shares of common stock outstanding as of February 28, 2018.~~

The aggregate market value of the common stock held by non-affiliates of the registrant as of ~~May 31, 2017~~the last business day of the registrant’s most recently completed second fiscal quarter (June 30, 2023) was ~~$41,903,396,~~$35,033,921, as computed by reference to the closing price of such common stock on ~~OTCQB~~The Nasdaq Capital Market on such date.

The registrant had 34,338,782 shares of common stock outstanding as of April 15, 2024.

~~CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995~~

The following discussion should be read in conjunction with the financial statements and related notes contained elsewhere in this Annual Report on Form 10-K. Certain statements made in this discussion are ~~"forward-looking statements"~~“forward-looking statements” within the meaning of ~~The Private~~27A of the Securities ~~Litigation Reform~~ Act of ~~1995.~~1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by the Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, ~~involve~~which are only predictions and speak only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties ~~which could cause~~materialize, or should the underlying assumptions prove incorrect, actual results tomay differ ~~materially~~significantly from those ~~contemplated~~anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these ~~forward-looking statements.~~ statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

Unless otherwise indicated or the context requires otherwise, the words “we,” “us,” “our,” the ~~“Company” or~~“Company,” “our Company” or “Orgenesis” refer to Orgenesis Inc., a Nevada corporation, and our ~~subsidiaries, MaSTherCell, S.A. (“MaSTherCell”),~~majority or wholly-owned subsidiaries: Orgenesis ~~SPRL~~Belgium SRL, a Belgian-based entity (the “Belgian ~~Subsidiary),~~Subsidiary”); Orgenesis Ltd., an Israeli corporation (the “Israeli Subsidiary”); Orgenesis Switzerland Sarl, (the “Swiss Subsidiary”); Koligo Therapeutics Inc., a Kentucky corporation (“Koligo”); Orgenesis CA, Inc. (the “California Subsidiary”); Mida Biotech BV (“Mida”); Orgenesis Italy SRL (the “Italian Subsidiary”), Orgenesis Austria GmbH, an Austrian corporation (“Orgenesis Austria”), Octomera LLC (formerly Morgenesis LLC, a Delaware entity which was renamed to Octomera LLC during 2023) (“Octomera”) and its wholly or majority owned subsidiaries, Orgenesis Korea Co. Ltd., a Korean based entity; Orgenesis Services SRL, a Belgian-based entity; Orgenesis Maryland ~~Inc.~~LLC a Maryland entity; Orgenesis Biotech Israel Ltd. (“OBI”), an Israeli entity; Tissue Genesis International LLC (“Tissue Genesis”) a Texas limited liability company; Orgenesis Germany GmbH, a German entity; Orgs POC CA Inc, a Californian entity; Orgenesis Australia PTY LTD an Australian entity, Theracell Laboratories IKE (“Theracell Laboratories”), a Greek company, and ~~Cell Therapy Holdings S.A.~~ OCTO Services LLC, a Delaware limited liability company.

Forward-looking statements made in ~~an annual report~~this Annual Report on Form 10-K include statements about:

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” set forth in this Annual Report on Form 10-K for the year ended ~~November 30, 2017,~~December 31, 2023, any of which may cause our ~~company’s~~Company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks may cause the Company’s or its industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these ~~forward looking~~forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The ~~company~~Company is under no duty to update any forward-looking statements after the date of this report to conform these statements to actual results.

(All monetary amounts are expressed in thousands of US dollars, unless stated otherwise)

We are a ~~service~~global biotech company working to unlock the potential of cell and gene therapies (“CGTs”) in an affordable and accessible format. CGTs can be centered on autologous (using the patient’s own cells) or allogenic (using master banked donor cells) and are part of a class of medicines referred to as advanced therapy medicinal products (“ATMPs”). We are mostly focused on autologous therapies that can be manufactured under processes and systems that are developed for each therapy using a closed and automated approach that is validated for compliant production near the patient for treatment of the patient at the point of care (“POCare”). This approach has the potential to overcome the limitations of traditional commercial manufacturing methods that do not translate well to commercial production of advanced therapies due to their cost prohibitive nature and complex logistics to deliver such treatments to patients (ultimately limiting the number of patients that can have access to, or can afford, these therapies).

ATMP means one of any of the following medicinal products that are developed and commercialized for human use:

It is important to note that, although STMPs and GTMPs currently dominate the market, in order to access the market potential and trends in the future, other cell products are likely to be essential in all of these categories. We believe that autologous therapies represent a substantial segment of the ATMP market. Autologous therapies are produced from a patient’s own cells versus allogeneic therapies that are mass-cultivated from donor cells via the construction of master and working cell banks and are then produced on a large scale. Developers and manufacturers of ATMPs (both autologous and allogeneic) currently rely heavily on production using traditional centralized supply chains and manufacturing sites.

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. We are leveraging a unique approach to therapy production using our POCare Platform to potentially overcome some of the development and supply chain challenges of affordably bringing CGT to patients.

To achieve these goals, we have developed a collaborative worldwide network of research institutes and hospitals who are engaged in the POCare model (“POCare Network”), and a pipeline of licensed POCare advanced therapies that can be processed and produced under such closed and automated processes and systems (“POCare Therapies”). We are developing our pipeline of advanced therapies and with the goal of entering into out-licensing agreements for these therapies.

We believe that, for this industry to prosper, it must be based on utilizing a standardized platform. Cellular therapies, though defined as drug products, conceptually differ from other drug modalities. The way these drug products are produced is inherently different from producing existing drugs. They are based on reprogramming of cells sourced from the patient or from a donor. They are not composed of purchased chemical components such as typical pharmaceuticals, nor are they harvested in large quantities from genetically engineered cell lines and then sterilized such as typical biotech products. These “living drug” products are, in most cases, produced per patient individually in a highly sterile and controlled environment, and their efficacy is optimized when administered a short time following production as fresh product.

To advance the execution of our goal of bringing such therapies to market, we have designed and built our POCare Platform - a scalable infrastructure of technology and services that ensures a central quality system, replicability and standardization of infrastructure and equipment, and centralized monitoring and data management. The platform is constructed on POCare Centers that serve as hubs that implement locally our POCare quality system, Good Manufacturing Practices (“GMP”), training procedures, quality control testing and incoming supply of materials and oversee the actual production in the Orgenesis Mobile Processing Units & Labs (“OMPULs”). The POCare Platform is operated by Octomera (see below). This platform is utilized by other parties, such as biotech companies and hospitals for the supply of their products. Octomera services include adapting the process to the platform and supplying the products (“POCare Services”). These are services for third party companies and for CGTs that are not necessarily based on our POCare Therapies.

We believe that decentralized cell processing offered through our POCare Platform could potentially democratize supply, increase production capacity, simplify logistics and shorten turnaround time. These benefits may significantly lower production costs and potentially allow us to make progress toward its vision of improved access and outcomes in healthcare.

The global CGT market is growing at a rapid pace, now with over 2,000 active clinical trials (Alliance for Regenerative Medicine (ARM) H1 2022 Report), including 200+ in Phase III and 254 new clinical trials in 2022 (ARM State of the Industry Briefing). Several biotech companies developing CGTs have been acquired by large pharma (Gilead Sciences acquired Kite Pharma, Roche acquired Spark Therapeutics, Bayer acquired AskBio) for several billion dollars before generating their first revenues. According to an article by McKinsey & Company from April 2020, CGT products account for 12 percent of the industry’s clinical and 16 percent of the preclinical pipeline.

This is a relatively new field, developing quickly in the last decade. The initial development of these therapies began at clinical research centers, based on attempts of researchers and clinicians to incorporate the scientific knowledge that accumulated from the biotechnology industry, including advancements in genetic engineering of cells, cell sourcing, tissue engineering and the medical advancements of immunology. In the early years of development, it was not even clear if such therapies would be considered a clinical treatment (such as a bone marrow transplant) or drug product such as a recombinant protean. In the last decade there has been much development in the regulatory framework required to bring such products to market, but still there is vagueness in some markets and unique regulatory pathways (such as the legal framework in the EU for hospital exemption allowing hospitals who wish to provide such therapies to their patients to take responsibility for treating patients). Though the biotech industry has embraced this new modality of drug development, they face many challenges. The pharma and biotech companies are used to centralized production and providing shelf products that can be stored and made available on demand. Their development and production teams are eager to fit these therapies into the existing well-known paradigms. This has proven to be extremely challenging, and the result has been approvals of products such as CAR-Ts for blood cancers and products for treatment of genetic diseases costing hundreds of thousands of dollars, or even over a million dollars per patient. The capacity to produce such products is limited and though they are considered a breakthrough in terms of clinical results, the high cost has been prohibitive of market acceptance.

While the biotech industry struggles to determine the best way to lower cost 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 (new generations of industrial viruses, big data analysis for genetic and molecular data) and technologies (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 built. Further the cost of production during the clinical stage is extremely expensive, and the cost of the clinical trial itself is very high. Given these financial restraints, researchers and institutes hope to out- license their therapeutic products to large biotech companies or spin-out new companies and raise large fundraising rounds. However, in many cases they lack the resources and the capability to de-risk their therapeutic candidates enough to be attractive for such fundings or partnership.

Our POCare Network is an alternative to the traditional pathway of drug development. Orgenesis works closely with many such institutes and is in close contact with researchers in the field. The partnerships with leading hospitals and research ~~company~~institutes gives us a deep insight as to the developments in the field, as well as the market potential, the regulatory landscape and optimal clinical pathway to potentially bring these products to market.

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. The POCare Therapies division reviews many therapies available for out licensing and select the ones which they believe have the highest market potential, can benefit the most from a point of care approach and have the highest chance of clinical success. It assesses such issues by utilizing its global POCare Network and its internal knowhow accumulated over a decade of involvement in the field.

The goal of this in-licensing is to quickly adapt such therapies to a point-of- care approach through regional partnerships, and to out-license the products 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.

Our cell and gene therapies pipeline includes investigational therapies and next-generation technologies that have the power to transform the way cancer and other unmet clinical needs are treated. Our pipeline is predominantly comprised of personalised autologous cell therapies, meaning that patients receive cells that originate from their own body, virtually eliminating the risk of an immune response and rejection.

Our promising pipeline focuses on Advanced Therapy Medicinal Products originating from proprietary internal, joint ventures and in-licensing agreements with both biotech companies and leading research institutions. Our main therapeutic fields encompass cell-based immuno-oncology, cell-based drug delivery platforms, regenerative medicine, ~~industry with a focus on~~anti-viral and autoimmune disease.

The following table summarizes our therapies in development, which are discussed in detail below:

Chimeric antigen receptor T cells (also known as CAR-T cells) are T cells that have been genetically engineered to produce an artificial T-cell receptor for use in immunotherapy. CAR-T cell therapy ~~development~~uses T cells engineered with CARs for cancer therapy. The premise of CAR-T immunotherapy is to modify T cells to recognize cancer cells in order to more effectively target and ~~manufacturing~~destroy them. Physicians harvest T cells from patients, genetically alter them, then infuse the resulting CAR-T cells into patients to attack their tumors. CAR-T cells can be either derived from T cells in a patient’s own blood (autologous) or derived from the T cells of another healthy donor (allogeneic). Once isolated from a person, these T cells are genetically engineered to express a specific CAR, which programs them to target an antigen that is present on the surface of tumors. After CAR-T cells are infused into a patient, they act as a “living drug” against cancer cells. When they come in contact with their targeted antigen on a cell, CAR-T cells bind to it and become activated, then proceed to proliferate and become cytotoxic.

We are developing a new and advanced anti-CD19 CAR-T therapy for ~~advanced medicinal products serving~~treating B-cell Acute lymphoblastic leukemia (ALL) and other B-cell lymphoma patients. This platform is utilizing a first-in-class processing technology that enables fast delivery of this product at low cost. This CAR-T platform technology can potentially be utilized for multi-indications beyond blood cancer including for autoimmune indications. Based on what management believes to be encouraging real world clinical data generated in an investigator initiated trial, we are prioritizing cGMP production of our proprietary viral vector in order to generate clinical data to support regulatory filings in Europe and the ~~regenerative medicine industry.~~US.

During 2023, the OMPUL production site in Israel was qualified to produce clinical batches for the CAR-T (CD 19). Agreement on conditions for initiation of clinical study, which would be under a US IND, was reached with the Israeli ministry of health. In addition, weOrgenesis engaged the Paul Ehrlich Institute (PEI), which has provided scientific advice needed for initiation of trials in Belgium and Greece for potential EU approval.

Following the success CAR-T therapy demonstrated in hematological malignancies, the therapeutic potential of CAR-T is employed for solid tumors as well.

We are ~~focused on~~ developing ~~novel and proprietary cell~~a CAR-T therapy ~~trans-differentiation technologies~~ for the treatment of ~~diabetes.~~solid tumors including pancreatic and colorectal cancers. The CAR is directed against two members of the carcinoembryonic antigen-related cell adhesion molecule (CEACAM) family. These adhesion proteins are involved in tumor growth, invasion, angiogenesis and immune evasion and their expression is correlated with poor prognosis. In pancreatic cancer, these adhesion molecules are overexpressed on tumor cells while expression on healthy tissues is limited making them a promising therapeutic target.

A large number of diseases continue without adequate conventional therapies. Cell therapy has a unique therapeutic effect as it is based on augmenting, repairing, replacing or regenerating organs and tissues - leveraging the human body's capacity to heal. It therefore holds the promise to be able to cure diseases that present both a major health care and economic burden, such as cancer, diabetes and cardiovascular diseases. But if the regenerative market is to realize its full potential, manufacturing and logistics need to be in place to ensure these products' safety, potency and consistency at economically sustainable costs. We have built up our long term strategy on this industry assessment.

Our vertically integrated manufacturing capabilities are being used to serve emerging technologies of cell therapy clients in such areas as cell-based cancer immunotherapies and neurodegenerative diseases and also to optimize our abilities to scale-up our licensed and proprietary technologies for clinical trials and eventual commercialization of our proposed diabetes treatment. Our hybrid business model of combining our own proprietary cell therapy trans-differentiation technologies for the treatment of diabetes and a revenue-generating contract development and manufacturing service business provides us with unique capabilities and supports our mission of accelerating the development and ultimate marketing of breakthrough life-improving medical treatments.

We seek to differentiate our company from other cell therapy companies by our Belgian-based CDMO subsidiary, MaSTherCell, and a world-wide network of Contract Development and Manufacturing Organizations (“CDMO”) joint venture partners who have built a unique and fundamental base platform of know-how and expertise for manufacturing in a multitude of cell types. The goal is to industrialize cell therapy for fast, safe and cost-effective production in order to provide rapid therapies for any market around the world. Our strategy is to have all of our services compliant with GMP requirements, ensuring identity, purity, stability, potency and robustness of cell therapy products for clinical phase I, II, III through commercialization.

MaSTherCell currently operates facilities qualified under cGMPs in Belgium. We acquired MaSTherCell in March 2015. Formed in 2011 as a spin-off from the Université Libre de Bruxelles (“ULB”) and starting operational activities in 2013, we believe that MaSTherCell has assembled a recognized team of experts and talents in the cell therapy industry and has attracted world-class customers. MaSTherCell is developing technologies for other cell therapy companies such as cell-based cancer immunotherapies and neurodegenerative diseases. Our vertical integration responds to the main challenges faced by most biotechnology companies such as cost of goods sold and logistics.

MaSTherCell has built its unique and disruptive value proposition by providing two types of services to its customers: (i) process and assay development and optimization services and (ii) current Good Manufacturing Practices (cGMP) contract manufacturing services as practiced in Europe. These services offer a double advantage to MaSTherCell’s customers. First, customers can continue allocating their financial and human resources on their therapy offerings, while relying on a trusted partner for their production process development. Second, it allows customers to leverage MaSTherCell’ s expertise in cell therapy manufacturing and all related aspects. As the industry continues to mature and a growing number of cell therapy companies approach commercialization, we believe that MaSTherCell is well positioned to serve as an external manufacturing source for cell therapy companies. Additionally, all of these capabilities offered to third-parties will be mobilized for our internal development projects, allowing us to be in a position to bring new products to the patients faster and in a cost-effective way.

~~Our trans-differentiation technologies for treating diabetes, which we will refer to as our cellular therapy (“CT”) business,~~CAR binding domain is based on a ~~technology licensed by~~humanized monoclonal antibody, that specifically binds specific CEACAM molecules. We have an exclusive license to use this proprietary antibody in CAR-T therapy. Using the humanized antibody binding domain, we have successfully completed the CAR construct optimization, engineered CAR-T cells using our platform process and demonstrated in vitro efficacy and specificity.

TIL therapy is a clinically validated personalized cancer treatment based on infusion of autologous TILs expanded ex vivo from tumors. Once expanded, the TILs are infused back into the patient where they attack the cancer cells with a high degree of specificity. We have developed a GMP-compliant, reproducible and efficient production approach that is performed in a fully closed system enabling the generation of functional TILs from various solid tumor biopsies. The expanded TILs lead to a more robust therapeutic response especially for solid tumors such as lung cancer.

During 2023, we have completed methods validation and qualification required for clinical batch production. Moreover, the OMPUL production site in Israel was qualified to produce clinical batches. Agreement on conditions for initiation of clinical study was reached with the Israeli ~~Subsidiary that demonstrates~~Ministry of Health.

Dual vaccine cell-based cancer immunotherapy (MDVAC) is composed of two pre-activated APCs (DCs and Macrophages) loaded with allogenic whole cancer cell lines, which maximize repertoire of cancer antigen presentation. MDVAC harnesses the ~~capacity~~immune system’s natural ability to ~~induce a shift~~recognize and react to cancer neo-antigens to boost cancer immunotherapy. Parallel cancer antigen presentation promotes improved immune education and tumor recognition in the ~~developmental fate of cells~~patient, leading to tumor growth arrest and metastasis decrease. This cell-based immunotherapy, licensed from ~~the liver and transdifferentiating them into “pancreatic beta cell-like” Autologous Insulin Producing (“AIP”) cells~~Columbia University, can be a developed for patients with Type 1 Diabetes. Moreover, those cells were found to be resistant to autoimmune attack and to produce insulin in a glucose-sensitive manner in relevant animal models which significantly broadens the potential of the technology for other therapeutics areas. Our trans-differentiation technology for diabetes is from the work of Prof. Sarah Ferber, our Chief Science Officer and a researcher at Tel Hashomer Medical Research Infrastructure and Services Ltd. (“THM”) in Israel. Our development plan calls for conducting additional preclinical safety and efficacy studies with respect to diabetes and other potential indications prior to initiating clinical trials. In parallel, we work on establishing the GMP manufacturing process which development is already accomplished.

~~We operate our CDMO and the CT businesses as two separate business segments.~~

Companies developing cell therapies need to make a decision early on in their approach to the transition from the lab to the clinic regarding the manufacturing and production of the cells necessary for their respective treatments. Of the companies active in this market, only a small number have established their own GMP manufacturing facilities due to the high costs and expertise required to develop and maintain such production centers. In addition to the limitations imposed by limited number of trained personnel and high infrastructure/operational costs, the industry faces a need for custom innovative process development and manufacturing solutions. Due to the complexity and diversity of the industry, such solutions are often customized to the particular needs of the company and, accordingly, a multidisciplinary team of engineers, cell therapy experts, cGMP and regulatory experts is required. Such a unique group of experts can exist only in an organization that specializes in developing solutions and manufacturing cell therapies.

Companies can establish their own process and GMP manufacturing facility or engage a contract manufacturing organization for each step. A contract manufacturing organization (CMO), sometimes called a contract development and manufacturing organization (CDMO), is an entity that serves other companies in the pharmaceutical industry on a contract basis to provide comprehensive services from cell therapy development through cell therapy manufacturing for and end-to-end solution. Due to the complexity, global outreach needs, redundancy and operational costs of manufacturing biologics and cell therapies, the CDMO business is expanding. With more than 854 companies in the field of the regenerative medicine worldwide (versus 580 in 2015) and 934 clinical trials underway by the end of the third quarter of 2017 (versus 486 in first quarter of 2015), we believe that the industry shows a rapid growth rate accompanied by a lack of sufficient GMP manufacturing capacities (Source:~~Informa~~, 2015 and 2018). Over recent years, advances in the field of regenerative medicine, including the growth of autologous CAR T-cell therapies, led to a significant increase in investment in the industry. As its name implies, the backbone of CAR T-cell therapy is T-cells, often called the workhorses of the immune system because of their critical role in orchestrating the immune response and killing cells infected by pathogens. The therapy requires drawing blood from patients and separating out the T-cells. Next, using a disarmed virus, the T-cells are genetically engineered to produce receptors on their surface called chimeric antigen receptors, or CARs. Treatments work by extracting a cancer patient’s T-cells, genetically modifying them outside the body to make them more effective at hunting down and killing tumors, and then re-injecting them into the patient.

Two landmark U.S. FDA approvals in CAR T-cell therapy significantly impacted the cell therapy industry. In August 2017, Novartis’s CAR T-cell therapy, Kymriah, was approved for relapsed/refractory acute lymphoblastic leukemia for pediatric and young adult patients, making it the first cell-base immunotherapy to move across the finish line in the United States. Furthermore, after Gilead's acquisition of Kite Pharma, Inc. for $12 billion in 2017, Kite Pharma’s CAR T-cell therapy, Yescarta, was approved for adult patients with relapsed/refractory large B cell lymphoma after two or more lines of systemic therapy (Source: Alliance for Regenerative Medicine). We believe that these are the most concrete step towards building confidence and support for the future potential approvals of many more cellular therapies that address a wide range of ~~diseases.~~solid tumors. The GMP production process was optimized, specificity and activity tests were successfully developed. We plan to initiate interaction with regulatory authorities towards finalization of our clinical strategy.

The ~~complexity~~patient’s own pancreatic islets, comprised of ~~manufacturing individual cell~~the cells that secrete insulin to regulate blood sugar, form KYSLECEL, a minimally manipulated autologous cell-based product produced according to current good tissue practices (cGTP). The therapy treatments poses a fundamental challenge for CAR T-cell therapy-based companies as they enter the field, potentially casting a spotlight on improved large-scale manufacturing processes such as MaSTherCell's. Manufacturing and delivery are more complex in CAR T than for a typical drug. Inhas been allowed by the U.S. Food and Drug Administration (“FDA”) and is available in the US. The target population of KYSLECEL, as an islet autologous transplant after total pancreatectomy (TP-IAT), ~~only a few dozen specialized hospitals~~is chronic or acute recurrent pancreatitis patients who are ~~currently qualified to provide CAR T treatments, which require retrieving, processing~~in need of insulin secretory capacity preservation.

KT-DM-103 and ~~then returning immune cells~~KT-CP-203 (3D-Printed Pancreatic Islets)

Through the acquisition of Koligo, we have exclusively licensed patents and technology from the University of Louisville Research Foundation, related to the ~~patient,~~revascularization and 3D printing of cells and tissues intended for transplantation (“3D-V” technology platform). Utilizing this technology, potential autologous and allogeneic pancreatic islet transplants may be implemented to treat type 1 diabetes (KT-DM-103), and chronic pancreatitis (KT-CP-203). In addition to pancreatic islet transplantation, the 3D-V technology platform may also support improved transplantation of other cell and tissue types.

We are developing a personalized cell-based therapy product for wound healing. The product is based on allogeneic Adipose-Derived Stem Cells (ADSCs). Following expansion, the ADSCs are used for the extraction of BioxomeTM. We have established a process for encapsulation of Topiramate, a well-known substrate used in other indications, during the Bioxome manufacture. The Bioxome-encapsulated Topiramate (Biox-Top) will be further formulated in commercially available hyaluronic acid (HA), a well-known dermal filler, for topical application. Pre-clinical development is ongoing following demonstration of anti-inflammatory efficacy in human skins explants.

Exosomes are small, membrane-enclosed extracellular vesicles involved in cell-to-cell interactions. They may serve as a valuable therapeutic modality given their ability to transfer a wide variety of therapeutic payloads to cells affecting the cells in multiple ways. The exosomes may be designed to reach specific cell types.

Bioxomes are liposomes that are biocompatible and serve as cGMP/GLP-compliant exosome-like membrane nanostructures that can be produced from various cell types. To this end, we have developed a proprietary large-scale cGMP-compatible manufacturing process for preparation of Bioxomes from the following: human adipose cells, fibroblasts, blood cells, and plant cells.

Additionally, preliminary biodistribution studies demonstrated specific organ tropism, as well as ~~monitoring side effects. These factors provide real incentives~~enhanced skin penetration, when applied topically. Further biodistribution and bioavailability studies with Bioxomes, encapsulated with selected therapeutic cargos are on-going to confirm efficacy and safety. Bioxomes may be utilized as the next generation biological delivery platform for ~~cell therapy companies~~Immuno-Oncology indications. Currently, the regulatory strategy is being finalized according to ~~seek third-party partners, or contract manufacturers, who possess technical, manufacturing,~~US FDA requirements.

We are developing a novel topical gel formulation of an active RNA-degrading enzyme, called ranpirnase. Ranpirnase combats viral infections by targeting double-stranded RNA including miRNA precursors, via RNA degradation catalysis. Topical ranpirnase demonstrated good tolerability and ~~regulatory expertise in cell therapy development and manufacturing such as cell therapy CDMOs like MaSTherCell.~~

Our vertical integration of development and manufacturing and logistics services through MaSTherCell provide the basis for generating a recurring revenue stream, as well as carefully managing our fixed cost structure to maximize optionality and drive down production cost. We believe that operating our own manufacturing facility provides us with enhanced control of material supply for bothpreliminary clinical ~~trials and the commercial market, will enable the more rapid implementation of process changes, and will allow for better long-term margins.~~

Our Belgian-based subsidiary, MaSTherCell, is a CDMO specialized in cell therapy development for advanced therapeutically products. In the last decade, cell therapy medicinal products have gained significant importance, particularlyefficacy in the ~~fields~~treatment of ~~ex-vivo gene therapy and immunotherapy. While academic and industrial research has led scientific~~HPV-associated external anogenital warts (EGW) in a Phase 2a clinical study conducted in Bolivia.

Following FDA positive pre-IND feedback, preclinical development program was initiated to support human clinical studies in the sector, industrialization and manufacturing expertise remains insufficient. MaSTherCell plans to fill this gap by providing two types of services to its customers: (i) process and assay development services and (ii) current Good Manufacturing Practices (cGMP) contract manufacturing services. These services offer a double advantage to MaSTherCell's customers. First, customers can continue allocating their financial and human resources on their product/therapy, while relying on a trusted partner for their process development/production. Second, it allows customers to benefit from MaSTherCell's expertiseUS. A dermal toxicology feasibility study was conducted, showing that RanTop was well-tolerated in ~~cell therapy manufacturing and all related aspects.~~

MaSTherCell continues to invest in its manufacturing capabilities to offer a “one-stop-shop” service to its customers from pre-clinical up to commercial. This stems from the finding that these companies' processes haverepeated daily topical administration. Systemic exposure following topical administration need to be ~~set up right~~assessed during preclinical and clinical studies. For this purpose, a sensitive ranpirnase blood concentration bioanalytical method was established.

In laboratory experiments, we have demonstrated the feasibility of ranpirnase encapsulation in Orgenesis Bioxome delivery platform. Bioxome encapsulation, enhanced ranpirnase anti-viral activity in an in vitro test.

Ranpirnase was originally isolated from ~~the start in order for them to obtain approved products~~frog oocytes. We have focused on developing of a recombinant renpirnase, aiming at avoiding use of animal and enabling a scalable cost-effective industrial process that have the simplest possible process and with the lowest possible cost of goods sold (COGS). Our target customers are primarily cell therapy companies that are in clinical trials with the aim of accompanying them as their manufacturing and logistic partner once their product candidates reach commercial stage.

We devote significant resources to process development and manufacturing in order to optimize the safety and efficacy of our future product candidates for our customers, as well as our cost of goods and time to market. This vertical integration of development, manufacturing and logistics services through MaSTherCell aims to provide the basis for generating a recurring revenue stream, as well as carefully managing our fixed cost structure, maximize optionality, and drive long-term cost of goods as low as possible. We believe that operating our own manufacturing facility provides us with enhanced control of material supply for both clinical trials and the commercial market, will enable the more rapid implementation of process changes, and will allow for better long-term margins.

MaSTherCell continues to invest resources to maintain best practices in quality service, quality control, quality assurance and permanent staff training to uphold the highest standards to serve its customers. MaSTherCell has built-up a team of more than 92 industry experts dedicated to support process development and manufacturing efforts in a fast, safe and cost-effective way. MaSTherCell's strategy is to build long term relationships with its customers in order to help them bring highly potent cell therapy products faster to the market and in cost-effective ways. To provide these services, MaSTherCell relies on a team of dedicated experts both from academic and industry backgrounds. It operates through state-of-the-art facilities located approximately 40 minutes from Brussels, which have received the final cGMP manufacturing authorization from the Belgian Drug Agency (AFMPS) in September 2013 and a renewal in October 2017 for cell-based therapies manufacturing that was extended to gene therapies.

On November 15, 2017, we, MaSTherCell and the Belgian Sovereign Funds Société Fédérale de Participations et d'Investissement (“SFPI”) entered into a Subscription and Shareholders Agreement (the “Agreement”) pursuant to which SFPI completed an equity investment in MaSTherCell in the aggregate amount of €5million (approximately $5.9 million), for approximately 16.7% of MaSTherCell. The equity investment included the conversion of the then outstanding loan of €1 million (approximately $1.1 million) plus accrued interest in the approximate amount of €70 thousand (approximately $77,000), previously made by SFPI to MaSTherCell (the “Loan Amount”).

Under the Agreement, an initial subscription amount of €2 million (approximately $2.3 million) has been paid and the outstanding Loan Amount was converted. The balance of approximately €2 million is payable as needed by MaSTherCell and called in by the board of directors of MaSTherCell. The proceeds of the investment will be used to expand MaSTherCell’s facilities in Belgium by the addition of five new cGMP manufacturing cleanrooms. MaSTherCell expects that this expansion will position it as the European hub for the Company’s continental activities and strengthen its leading position in cell and gene manufacturing. The state-of-the-art design enables MaSTherCell to offer full flexibility for production and process development.

Under the Agreement, SFPI will be represented by one board member of the five board members of MaSTherCell. In addition, SFPI is entitled to designate one independent board member to the MaSTherCell board who is acceptable to us. The Agreement provides that, under certain specified circumstances where MaSTherCell breaches the terms of the Agreement, SFPI is entitled to put its equity interest in MaSTherCell to us at a price equal to the subscription price paid by SFPI, plus a specified annual premium ranging from 10% to 25%, depending on the year following the subscription in which the put is exercised. If the Company elects to terminate the Agreement before its scheduled term of seven years (or to not renew the agreement upon its scheduled termination), SFPI is entitled to put its MaSTherCell equity interest to us at fair market value (as determined by SFPI and the Company). Additionally, at any time during the first three years following the investment, SFPI is entitled to exchange its equity interest in MaSTherCell into shares of common stock, at a rate equal to the subscription price paid by SFPI divided by $6.24 (subject to adjustment for certain capital events, such as stock splits).

Following the SFPI investment in MaSTherCell, in November 2017, MaSTherCell announced the expansion by 600m² of its facility in Belgium with a dedicated, late-stage clinical and commercial cGMP unit, anticipated to be operational by the fourth quarter of 2018. This new expansion will enable MaSTherCell to augment its commercial capabilities in Europe with five state-of-the-art advanced manufacturing units and extended GMP-accredited quality control (QC) laboratories.

In light of the globalization of the industry in general and the therapeutics industry in particular, adding to that the high cost of reaching market, developers of cell therapies see themselves as global organizations and build their models on global markets. As cell therapies are based on living cells, they are limited in their ability to be centrally manufactured. An additional challenge for globalization is the fact that themeets regulatory requirements for biological drugs. We have successfully demonstrated feasibility of producing active recombinant ranpirnase using genetically engineered bacterial fermentation. We plan to use the ~~therapies is not harmonized between jurisdictions, presenting additional operational challenges.~~recombinant ranpirnase in future development.

Orgenesis ~~is building up~~licensing partner, Okogen, Inc., has announced in October 2023 the initiation of a leading international CDMO focusing on cell manufacturing and a strong pipeline of regenerative medicine products. Capitalizing on MaSTherCell’s experience and expertise, we have established collaboration agreementPhase IIb clinical trial in India evaluating OKG-0303 for ~~the CDMO activity with the main focus, initially, in South Korea and Israel. The goal~~acute infectious conjunctivitis (“Pink Eye”). OKG-0303 is a ~~potential 50/50 partnership, which allows us the potential of full ownership in the future.~~combination product containing ranpirnase (OKG-301) as an antiviral active component.

We have leveraged the recognized quality expertise and experience in cell process development and manufacturing of MaSTherCell, and our international joint ventures, in Israel and Korea, to build a global CDMO in the cell therapy development and manufacturing area. We believe that cell therapy companies need to be global in order to truly succeed. We target the international manufacturing market as a key priority through joint-venture agreements that provide development capabilities, along with manufacturing facilities and experienced staff.

AutoVac is an autologous, pan-antigenic vaccine platform for viral infections. The main revenue drivers of our growth strategy on a global reach are the number of batches and the number of patients per manufacturing batch. These parameters vary along the development cycle of the new treatments (starting from as few as 20 patients in Phase I to thousands of patients when reaching commercialization). When a client reaches the commercial stage, their demand for manufacturing substantially increases, while barriers preventing the client from switching to another manufacturing organization remain extremely high. The difficulty in transferring CDMOsvaccine is a function of the tech transfer of such complex manufacturing processes being extremely lengthy, requiring many months of training of highly specialized employees, while also possibly requiring new regulatory approvals. Therefore, we believe we are well positioned to continue expanding our revenue for the following reasons:

We have leveraged the experience and expertise of MaSTherCell to build out a global network of CDMO centers. We believe that this international footprint will give a unique competitive advantage to MaSTherCell with harmonized manufacturing between the respective regional footprints.

To date we have set up CDMO facilities in South Korea and set the basis for process development in Israel. These have been set up as collaborative joint ventures where we have invested significant amounts as convertible loans. Under the arrangements, we have the ability to convert our loans into 50% of the equity in the entities. The joint venture documents also allow us a call option on the equity holdings of our partners such, if and when we determine to acquire ownership and control of these facilities.

On March 14, 2016, we and CureCell Co., Ltd. (“CureCell”) entered into a Joint Venture Agreement (the “CureCell JVA”) pursuant to which the parties are collaborating in the contract development and manufacturing of cell therapy products in Korea. Under the CureCell JVA, CureCell has procured, at its sole expense, a GMP facility and appropriate staff in Korea for the manufacture of cell therapy products. We shared with CureCell our knowhow in the field of cell therapy manufacturing, which know-how does not include the intellectual property included in the license from the THM to our Israeli Subsidiary. The parties pursue the joint venture through CureCell (the “JV Company”), with each party having 50% from the participating interest of the JV Company subject to the fulfillment by each party of his obligations under the CureCell JVA.

Under the CureCell JVA, the Company and CureCell each undertook to remit, within two years of the execution of the CureCell JVA, a minimum amount of $2 million to the JV Company, of which $1 million is to be in cash and the balance may be in an in-kind investment, the scope and valuation of which shall be preapproved in writing by CureCell and the Company. The Company’s funding was made by way of a convertible loan. The CureCell JVA provides that, under certain specified conditions, we can require CureCell to sell to us its participating (including equity) interest in the JV Company in consideration for the issuance of our common stock based ~~on the then valuation of the JV Company. As of November 30, 2017, we remitted to CureCell $2.1 million.~~

On May 10, 2016, we and ATVIO Biotech Ltd., an Israeli company, (“ATVIO”) entered into a joint venture agreement pursuant to which the we are collaborating in the contract development and manufacturing of cell and virus therapy products in the field of regenerative medicine in Israel. We are pursuing the joint venture through ATVIO, in which we are holding a 50% participating interest therein, with the remaining 50% participating interest being held by the other shareholders of ATVIO. To date, ATVIO has procured, at its sole expense, a GMP facility and has been recruiting employees in Israel. Subject to the work plan that was approved by ATVIO and us, we have remitted to ATVIO a total of $1 million to defray the costs associated with the setting up and the maintenance of the GMP facility. Our funding was made by way of a convertible loan to ATVIO, which shall be convertible, at our option at any time, into 50% of the then outstanding equity capital immediately following such conversion.

Our global manufacturing network is envisioned as offering a global one-stop-shop manufacturing and logistics services and breakthrough technologies enabling promising therapies to more rapidly reach the market in a more cost-effective way.

On January 22, 2018 we announced a strategic organizational regrouping of our CDMO global manufacturing services offerings. The planned CDMO regrouping will utilize the global MaSTherCell brand for its unique technology and innovation activity located in Israel and serving the global cell & gene therapy markets. The primary purpose of the strategic regrouping is to create a more efficient CDMO corporate organization that can optimally utilize resources and more efficiently broaden, streamline and harmonize the CDMO service offerings on a global basis utilizing the quality and standards of MaSTherCell. In connection with this and in order to align our CDMO activities, we plan to transfer to a newly formed and wholly-owned Delaware-based holding company, named MaSTherCell Global Inc., our interests in MaSTherCell S.A., as well as in our joint venture partners in Israel and Korea. When successfully concluded, of which no assurance can be provided, each of MaSTherCell S.A., At-Vio Biotech Ltd. and CureCell Co. Ltd., will be direct subsidiaries of MaSTherCell Global Inc.

We are currently in advanced negotiations with a prospective strategic partner in the U.S. and will continue to explore discussions with other strategic partners throughout the world to set up CDMO facilities in other geographic locations. While we expect to utilize similar structures as our other joint venture partners, we can provide no assurance that such efforts will be successful in these other joint venture endeavors.

~~We enable our clients to go faster to the market in a cost-effective way~~. MaSTherCell continues to invest in its manufacturing capabilities to offer a “one-stop-shop” service to its customers from pre-clinical up to commercial. This stems from the finding that these companies' processes have to be set up right from the start in order for them to obtain approved products that have the simplest possible process and with the lowest possible cost of goods sold (COGS).

~~Quality~~. MaSTherCell works alongside its customers to transform the promises of their cell-based therapies into a robust and scalable process, compliant with GMP requirements. Its stringent quality system is applied throughout the process and ensures identity, purity, stability, potency and robustness of cell therapy products from clinical phase I, II, III to commercialization. MaSTherCell continues to invest resources to maintain best practices in quality service, quality control, quality assurance and permanent staff training to uphold the highest standards.

~~Transforming academic technology to clinical manufacturing~~. One of the major issues with moving cell therapy products from “bench to manufacturing bedside” has been manufacturing bottlenecks. The heterogeneous nature of cell therapy products has introduced manufacturing complexity and regulatory concerns, as well as scale-up complexities that are not present within traditional pharmaceutical manufacturing. Over the years, MaSTherCell has developed experience and expertise necessary for transforming academic concepts into a clinical manufacturing program to support all phases of clinical trials. This includes assessing the clinical efficiency of the laboratory concept.

~~Access to a global network~~. Many companies developing autologous cell therapies envision using multiple manufacturing sites and processing centers to distribute the workload and minimize the shipping distances for such time- sensitive products. Many cell therapy products are fragile preparations that must be shipped and applied to a patient rapidly. This time pressure means that standard product-release testing procedures are not feasible. In particular, sterility testing often cannot be completed before patient treatment. This unique challenge in cell-therapy manufacturing requires tighter environmental and handling controls to greatly reduce any risk of sterility failure. Biotechnology companies have to anticipate their success and the logistics to cure at point of care. Therefore, the setup of a global CDMO meets this requirement and is the strategy behind our establishment of our CDMO facilities in Korea and Israel. To comply with anticipated regulatory harmonization, we have also invested in our Quality and Management Systems (QMS) and to structure them in a way they could be shared with either affiliated companies or business partners, and even with customers or prospects. South Korea, Israeli and European requirements are essentially the same, allowing MaSTherCell to implement its QMS model in a quick and efficient way. This truly international footprint will give a unique competitive advantage to MaSTherCell, thereby filling the gap of biotechnology companies’ requirement of “quality comparability” between the respective regional sites.

~~Central continental locations to deal with key logistics challenges~~~~. With respect to this challenge, MaSTherCell has built up the following:~~

~~Providing value-added manufacturing capacity~~. One of the biggest challenges is developing reliable (quality) and robust manufacturing processes for cell-based therapy products that ensure adequate product safety, potency, and consistency at an economically viable cost. Additionally, manufacturing quality and comparability is at the heart of biotechnology companies’ challenges. MaSTherCell has built-up a strong expertise to customize the production and manufacturing process to suit the particular needs of a given client. This process facilitates a deep understanding of the client’s needs and facilitates a long term revenue generating relationship.

MaSTherCell competes with a number of companies both directly and indirectly. Key competitors include the following CMOs and CDMOs: Lonza Group Ltd, Progenitor Cell Therapy (PCT) LLC (acquired by Hitachi), Pharmacell BV (acquired by Lonza), WuxiAppTec (WuXi PharmaTech (Cayman) Inc.), Cognate Bioservices Inc., Apceth GmbH & Co. KG, Eufets GmbH, Fraunhofer Gesellschaft, Cellforcure SASU, Cell Therapy Catapult Limited and Molmed S.p.A. MaSTherCell's services differ from these companies in two major aspects:

MaSTherCell strengthens its leading position by its “one-stop-shop” service offering, from pre-clinical to commercial, with a clear focus on COGS of manufacturing processes. This differentiation results in a price premium compared to other CMO’s as MaSTherCell operates with a lean organization focused solely on cell therapy. Quality is a critical aspect of our industry, and we believe that MaSTherCell has developed unique expertise in this field. We devote significant resources to process development and manufacturing in order to optimize the safety and efficacy of our future product candidates for our customers, as well as our cost of goods and time to market. Our goal is to carefully manage our fixed cost structure, maximize optionality, and drive long-term cost of goods as low as possible. We believe that operating our own manufacturing facility, which provides us with enhanced control of material supply for both clinical trials and the commercial market, will enable a more rapid implementation of process changes, and will allow for better long-term margins.

Finally, MaSTherCell is the only CDMO located in Belgium which logistically offers an ideal location given the high concentration of companies active in cell therapy, including potential clients and companies with complementary know-how, products and services.

Diabetes Mellitus (DM), or simply diabetes, is a metabolic disorder usually caused by a combination of hereditary and environmental factors, and results in abnormally high blood sugar levels (hyperglycemia). Diabetes occurs as a result of impaired insulin production by the pancreatic islet cells. The most common types of the disease are Type-1 Diabetes (T1D) and Type-2 Diabetes (T2D). In T1D, the onset of the disease follows an autoimmune attack of β-cells that severely reduces β-cell mass. T1D usually has an early onset and is sometimes also called juvenile diabetes. In T2D, the pathogenesis involves insulin resistance, insulin deficiency and enhanced gluconeogenesis, while late progression stages eventually lead to β-cell failure and a significant reduction in β-cell function and mass. T2D often occurs later in life and is sometimes called adult onset diabetes. Both T1D and late-stage T2D result in marked hypoinsulinemia, reduction in β-cell function and mass and lead to severe secondary complications, such as myocardial infarcts, limb amputations, neuropathies and nephropathies and even death. In both cases, patients become insulin-dependent, requiring either multiple insulin injections per day or reliance on an insulin pump.

Diabetes is one of the most challenging health problems in the 21st Century, incurring staggering health, social, and economic impact. Diabetes is currently the fourth or fifth leading cause of death in most developed countries. Diabetes has been declared an epidemic in many developing and newly industrialized nations.

Cell therapy is the prevention or treatment of human disease by the administration of cells that have been selected, multiplied and manipulated outside the body (ex vivo). To date, the most common type of cell therapy has been the replacement of mature, functioning cells through blood and platelet transfusions. Since the 1970s, first bone marrow and then blood and umbilical cord-derived stem cells have been used to restore bone marrow, as well as blood and immune system cells damaged by chemotherapy and radiation used to treat many cancers. These types of cell therapies are standard of practice world-wide and are typically reimbursed by insurance. Various cell therapies are in clinical development for an array of human diseases, including autoimmune, oncologic, neurologic and orthopedic diseases, among other indications. Orgenesis, as well as other companies, are developing cell therapies that are designed to address cancers, ischemic repair and immune modulation. While no assurances can be given regarding future medical developments, we believe that the field of cell therapy holds the promise to address several medical conditions and minimize or ameliorate the pain and suffering from many common diseases and/or from the process of aging.

Within the field of cell therapy, research and development using stem cells to treat a host of diseases and conditions has greatly expanded. All living complex organisms start as a single cell that replicates, differentiates (matures) and perpetuates in an adult organism throughout its lifetime. Stem cells (in either embryonic or adult forms) are primitive and undifferentiated cells that have the unique ability to transform into or otherwise affect many different cells, such as white blood cells, nerve cells or heart muscle cells. Our technology employs a molecular and cellular approach directed at converting liver cells into functional insulin-producing cells as a treatment for diabetes. This new therapeutic approach does not use stem cells, but rather is focused on the use of a specific target for ex vivo induction of autologous ~~fully mature, adult cells.~~cell-based vaccine that enables rapid response in times of a viral outbreak. As initial proof of concept, we are validating this novel cell-based vaccine platform against Coronavirus disease 2019 (COVID-19). Preliminary in vitro results demonstrated successful immune cell activation, correlated with antigen expression. We have confirmed vaccine platform specificity and robustness by testing additional viral pathogens.

We are ~~two general classes~~planning to complete pre-clinical immunogenicity studies and finalize product development toward clinical submissions.

Collaborations, partnerships, joint ventures and license agreements are key components of ~~cell therapies: allogeneic~~our POCare strategy.

Our POCare technology collaborators and ~~autologous.~~ partners include Ori Biotech, Accellix, Columbia University in the City of New York, Caerus Therapeutics Corporation, UC Davis, The Johns Hopkins University, The Weizman Institute of Science and others.

In ~~allogeneic procedures, cells collected~~addition, we have collaborations and joint ventures for developing POCare Therapies in jurisdictions throughout the world, including various countries in North America, Europe, Latin America, Asia, and Australia. Such partnerships include in-licensing and out-licensing of therapies, service contracts from ~~a person (the donor) are transplanted into, or used~~the partners under co-development agreements, and development and manufacturing agreements for POCare products supplied regionally. For more information, see note 12, “Collaboration and Licensing Agreements” of the “Notes to ~~develop a treatment for another patient (the recipient) with or without modification. In cases where~~ the ~~donor and the recipient are the same individual, these procedures are referred to as “autologous”.~~

~~Our treatment for diabetes focuses on autologous cells that offer a low likelihood of rejection by the patient. We believe the long-term benefits~~Financial Statements” included in Item 8 of this ~~treatment can best be achieved with~~Annual Report on Form 10-K.

Koligo maintains commercial production facilities for KYSLECEL at an ~~autologous product. For our purposes~~FDA-registered establishment in Indiana. Koligo is also developing new technologies such as bio-degradable 3D structure to deliver islets and other cell/tissues. Koligo also maintains development labs at its Indiana location to support continued development.

The Belgian Subsidiary specializes in developing and validating proprietary and advanced cell and gene therapies. The Belgian Subsidiary benefits both from its central position in Europe and its being in the ~~treatment of diabetes, our cells are derived from~~leading Walloon biotech cluster. Located near Namur, at Novalis Science Park, the ~~liver or other adult tissue and are transdifferentiated to become adult Autologous Insulin Producing (“AIP”) cells.~~

~~Through our Israeli Subsidiary and our~~ Belgian Subsidiary ~~our goal is~~collaborates with leading medical and academic facilities which enables it to ~~advance our AIP cell-based therapy into clinical development. AIP cells utilize~~cover the technology of ‘cellular trans-differentiation’ to transform an autologous adult liver cell into a fully functional and physiologically glucose-responsive insulin-producing cell. Treatment with AIP cells is expected to provide Type 1 Diabetes patients with long-term insulin independence. Because AIP cells are autologous, this benefit should be achieved and maintained without the need for concomitant immunosuppressive therapy.

~~Threats~~drug product life cycle from ~~Pancreas Islet Transplantation and Cell Therapies~~

~~To date, a significant portion of the amount invested in diabetes related~~ research and development activities has been directed toward prevention and lifestyle management rather than toward development of a cure. For some patients with severe and difficult to control diabetes (hypoglycemic unawareness), islet transplants are considered. Pancreatic islets are the cells in the pancreas that produce insulin. Scientists use enzymes to isolate the islets from the pancreas of a deceased donor. Because the islets are fragile, transplantation must occur soon after they are removed. Typically, a patient receives at least 10,000 islet “equivalents” per kilogram of body weight, extracted from pancreases obtained from different donors. Patients often require two separate transplants to achieve insulin independence.

Transplants are often performed by an interventional radiologist, who uses x-rays and ultrasound to guide placement of a catheter - a small plastic tube - through the upper abdomen and into the portal vein of the liver. The islets are then infused slowly through the catheter into the liver. The patient receives a local anesthetic and a sedative. In some cases, a surgeon may perform the transplant through a small incision, using general anesthesia. Because the islets are obtained from cadavers that are unrelated to the patient, the patient needs to be treated with drugs that inhibit the immune response so that the patient doesn’t reject the transplant. In the early days of islet transplantation, the drugs were so powerful that they actually were toxic to the islets; improvements in the procedure are widely used and are now referred to as the Edmonton Protocol.

Pancreatic islet transplantation (cadaver donors) is an allogeneic transplant, and, as in all allogeneic transplantations, there is a risk for graft rejection and patients must receive lifelong immune suppressants. Though this technology has shown good results clinically, there are several setbacks, such as patients being sensitive to recurrent T1D autoimmune attacks and a shortage in tissues available for islet cells transplantation.

Pancreatic islet auto transplantation is a means of reducing the risk of brittle diabetes following total pancreatectomy. In 1977, researchers at the University of Minnesota School of Medicine pioneered the first Total Pancreatectomy with Islet Autologous Transplant (TP-IAT) for the treatment for induced diabetes post-surgery. At that time, islet cell isolation techniques, which had been pursued to treat insulin-dependent diabetes via allotransplant, yielded variable results and raised uncertainty regarding the future efficacy of TP-IAT. Since then, advances in isolation and purification have improved islet transplant outcomes, and the practice of TP-IAT has expanded. In the United States, there are currently approximately 12 centers performing TP-IAT, with 1 to 2 centers annually establishing programs; there is no available information on the worldwide use of this procedure.

TP-IAT has the distinct advantage of allowing patients the ability to avoid the significant postoperative complication of surgically induced brittle diabetes. The severity of brittle diabetes, a condition in which a patient experiences both severe hyper and hypoglycemic episodes, should not be underestimated; in one early series, 50% of late deaths after TP were secondary to iatrogenic hypoglycemic episodes. Although total pancreatectomy in the era of modern endocrine and exocrine replacement therapy has witnessed improvements in long-term morbidity and mortality, it remains one of the most morbid abdominal operations performed today.

~~We are developing and bringing~~ to clinical stage ~~a technology that is~~through pre-clinical and quality control.

Mida specializes in developing and validating proprietary and licensed advanced cell and gene therapies such IPS based ~~on the published work of Prof. Sarah Ferber, our Chief Science Officer~~therapies and ~~a researcher at THM, that demonstrates the capacity to induce a shift~~AI in its development labs in the ~~developmental fate~~Netherlands.

The Israel Subsidiary occupies 400 square meters of ~~cells from the liver into “pancreatic beta cell-like” insulin-producing cells. Furthermore, those cells were found resistant~~labs and offices in Nes Ziona, Israel.

The POCare Services are performed in decentralized hubs that provide harmonized and standardized services to the autoimmune attack and able to produce insulin in a glucose-sensitive manner. Our cell therapy business derives from a licensing agreement entered into as of February 2, 2012 by Orgenesis Ltd., our Israeli Subsidiary, and THM pursuant to which our Israeli Subsidiary was granted a worldwide royalty bearing an exclusive license to certain information regarding a molecular and cellular approach directed at converting liver cells into functional insulin-producing cells as a treatment for diabetes (the “License Agreement”customers (“POCare Centers”). ~~See “The THM License Agreement” for details relating to this License Agreement.~~

~~Toward this goal, we~~We are working to ~~advance a unique product that combines cell-based therapy~~expand the number and ~~regenerative medicine, (AIP) cells, into clinical development. AIP cells utilize the technology~~scope of ‘cellular trans-differentiation’ to transform an autologous adult liver cell into an adult, fully functional and physiologically glucose-responsive pancreatic-like insulin producing cell. Treatment with AIP cells is expected to provide diabetes patients with long-term insulin independence. Our aim is to develop our ~~AIP cell therapy in the treatment of diabetes by essentially correcting malfunctioning organs with new functional tissues created from the patient’s own existing organs.~~

Because the AIP cells are autologous, this benefit should be achieved and maintained without the need for concomitant immunosuppressive therapy. The procedure to generate AIP cells begins with liver tissue accessed via needle biopsy from a patient. The liver tissue is then sent to a CDMO, such as MaSTherCell, where biopsied liver cells are isolated, expanded and trans-differentiated into AIP cells. The final product is a solution of AIP cells, which are packaged in an infusion bag and sent back to the patient’s treating physician where the cells are transplanted back into the patient’s liver via portal vein infusion. The entire process, from biopsy to transplantation, is expected to take 5-6 weeks.

~~We believe that our singular focus on the acquisition, development, and commercialization of AIP cells may have many and meaningful benefits over other technologies, including:~~

We are aware of no other company focused on development of AIP cells based on trans-differentiation. The pharmaceutical industry is fragmented, and it is a competitive market. We compete with many pharmaceutical companies, both large and small and there may be technologies in development of which we are not aware.

~~We believe our ability to further develop our AIP cells is augmented by the following:~~

~~IP Strength~~ - Orgenesis has broad patent claims on its process and has both issued and pending patents in the U.S. and internationally. The patent portfolio includes granted patent US 8119405, entitled “Methods of inducing regulated pancreatic hormone production in non-pancreatic islet tissues,” which includes broad claims on trans-differentiating any mature, non-pancreatic cell type into an islet cell phenotype. Importantly, the company’s IP portfolio is not dependent on processes owned by other companies, such as embryonic stem cell technologies, production of endodermal intermediates or reprogramming (iPS) technologies. As a result, the company has both freedom to operate and ability to obstruct competitors in developing autologous cells for treatment of diabetes.

~~Simplicity~~ - There is no need for anti-rejection treatment or encapsulation. Using liver as pancreatic progenitor tissue allows the diabetic patient to be the donor of his own insulin-producing tissue, thus allowing autologous implantations with no need for anti-rejection therapy, which restricts the target population only to adult, severe diabetic patients. Moreover, drugs used for preventing the allo-transplanted tissue rejection are deleterious to insulin producing cell function and to the patient.

~~Safety~~ - the generated cells do not regress to pluripotency, and no adverse effects of uncontrolled cells proliferation occur. The cells are already mature and can be inserted in to the patient following extensive quality assurance testing. Moreover, our cells transplanted in rodents do not cause any adverse effects even following many weeks in the animals.

~~Availability~~ - Sufficient liver cells to treat a patient as well to store cells for additional future treatments may be generated. The cells can be frozen and thawed, without losing the trans-differentiation capacity for up to 20 passages in culture. It is anticipated that a biopsy from the diabetic patient's own liver is sufficient to generate enough insulin-producing cells to replace the entire cell function and control blood glucose level. As opposed to islets that are non-dividing (i.e., post-mitotic), it is necessary to use stem cells to generate sufficient numbers of cells that are then differentiated.

~~Future Product Candidates~~ -Currently, liver cells are best suited for generating AIP cells. Future products may involve the use of cell types other than liver that are more easily accessible from the diabetic patient or from unrelated donors. Additionally, other adult cells (i.e. fibroblasts) may be studied for trans-differentiation into functional cells in diseases other than insulin-dependent disorders (i.e. neurodegenerative).

Our cell therapy business derives from a licensing agreement entered into as of February 2, 2012 by Orgenesis Ltd., our Israeli Subsidiary, and THM pursuant to which our Israeli Subsidiary was granted a worldwide royalty bearing and exclusive license to certain information regarding a molecular and cellular approach directed at converting liver cells into functional insulin producing cells as a treatment for diabetes. By using therapeutic agents (i.e., PDX-1, and additional pancreatic transcription factors in an adenovirus-vector) that efficiently convert a sub-population of liver cells into pancreatic islets phenotype and function, this approach allows the diabetic patient to be the donor of his own therapeutic tissue.POCare Centers. We believe that this provides ~~major competitive advantage~~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.

We currently conduct our core business operations ourselves and through Octomera and its subsidiaries which are all wholly owned except as otherwise stated below (collectively, the “Subsidiaries”). The following is a description of Octomera and its subsidiaries:

In connection with the investment by an affiliate of Metalmark Capital Partners (“Metalmark” or “MM”) in the Company’s subsidiary Octomera LLC (formerly Morgenesis LLC) (“Octomera” or “Morgenesis”) in November 2022 (“the Metalmark Investment”), the Company streamlined its Services related business into Octomera.

On June 30, 2023, in connection with an additional $1,000 investment in Octomera, the Company and MM entered into Amendment No. 1 to the Second Amended and Restated Limited Liability Company Agreement (the “LLC Agreement Amendment”) to change the name of Morgenesis to “Octomera LLC” and to amend Morgenesis’ board composition. Pursuant to the ~~cell transformation technology~~LLC Agreement Amendment, the board of ~~our Israeli Subsidiary.~~managers of Octomera (the “Octomera Board”) became comprised of five managers, two of which were appointed by the Company, one of which was an industry expert appointed by MM, and two of which were appointed by MM. The change was effective immediately. As a result of the amendment to the composition of the Octomera Board pursuant to the LLC Agreement Amendment described above, the Company deconsolidated Octomera from its consolidated financial statements as of June 30, 2023 (“date of deconsolidation”) and recorded its equity interest in Octomera as an equity method investment.

On January 29, 2024, the ~~license, our Israeli Subsidiary has agreed~~Company and MM entered into a Unit Purchase Agreement (the “UPA”), pursuant to ~~pay~~which the ~~following to THM:~~

~~As of November 30, 2017, our Israeli Subsidiary has not reached any of these milestones.~~

~~In the event of an acquisition of~~Company acquired all of the ~~issued and outstanding share capital~~interests of ~~the Israeli Subsidiary or of~~Octomera that were owned by MM (the “Acquisition”). In consideration for such Acquisition, the Company ~~and/or consolidation~~and MM agreed to the following consideration:

Royalty Payments: If Octomera and its subsidiaries generate Net Revenue during the calendar years of ~~the Israeli Subsidiary or~~2025, 2026 and 2027, then the Company ~~into or with another corporation (“Exit”), under the License Agreement, THM is entitled~~will pay 5% of Net Revenues to elect, at its sole option, whether to receive from the Company a one-time payment based, as applicable, on the value at the time of the Exit of either 463,651 shares of common stock of the Company or the value of 1,000 ordinary shares of the Israeli Subsidiary at the time of the Exit. If THM elects to receive the consideration as a result of an Exit, the royalty payments will cease.

~~If THM elects to not receive any consideration as a result of an Exit, THM is entitled under the License Agreement to continue to receive all the rights and consideration it is entitled to~~Seller pursuant to the ~~License Agreement (including, without limitation,~~UPA up to $40 million.

Milestone Payments: If the exercise of the rights pursuant to future Exit events), and any agreement relating to an Exit event shall be subject to the surviving entity’s and/or the purchaser’s undertaking towards THM to perform all of the Israeli Subsidiary's obligations pursuant to the License Agreement.

The Israeli Subsidiary agreed to submit to THM a commercially reasonable plan which shall include all research and development activities as required for the development and manufacture of the products, including preclinical and clinical activities until an FDA or any other equivalent regulatory authority’s approval for marketing and including all regulatory procedures required to obtain such approval for each product candidate (a “Development Plan”),Company sells Octomera within ~~18 months~~ten years from the date of the ~~License Agreement. Under~~Closing at a price that is more than $40 million excluding consideration for certain Excluded Assets as per the ~~License~~UPA, the Company shall pay Seller 5% of the net proceeds.

Pursuant to the acquisition, MM’s designated members of the Board of Managers of Octomera resigned and the Company amended the Second Amended and Restated Limited Liability Company Agreement of Octomera to be a single member agreement to reflect the ~~Israeli Subsidiary undertook~~transactions contemplated by the UPA so that MM shall no longer (i) be a party to such agreement, (ii) have a right to appoint members of the board of managers of Octomera or (iii) be a member of Octomera.

The Octomera subsidiaries which are all wholly owned except as otherwise stated below (collectively, the “Subsidiaries”) include:

Our aim is to provide a pathway to bring ATMPs in the cell and gene therapy industry from research to patients worldwide through our POCare Platform. We define point of care as a process of collecting, processing, and administering cells as close as possible to the clinical setting. We believe that this approach is an attractive proposition for CGT during the clinical development stage and even more so upon market approval therapies. This will potentially help to minimize or eliminate the need for cell transportation, which is a high-risk and costly aspect of the supply chain, further allowing flexible production and patient treatment and reduce the cost and lengthy timelines associated with building additional clean rooms and complex tech transfers between production sites.

We believe that the existing industry paradigm in which each therapy developer invests in setting up unique infrastructure such as specialized clean rooms and production facilities is inefficient. The cost of construction, regulatory authorization and maintenance of these facilities is not only prohibitive but extremely difficult and lengthy to replicate, allowing no economies of scale. We have based the design of our POCare Platform on the concept of standardizing infrastructure by providing flexible building blocks through the POCare Centers and OMPULs, which allows for quick expansion at multiple locations.

Integrated closed and automated processing systems require fewer full-time employees (“FTEs”) to produce GMP batches, resulting in lower cost of goods and a process that has the ability to scale in sync with market demand. Full automation may not be necessary for all clinical phases, but it is important to plan for future incorporation. To this end, we have invested time and capital into evaluating relevant technology for CGT processing and have developed proprietary equipment that did not exist in the marketplace.

We aim to build value in various aspects of our company ranging from supply related processes including development and distribution systems, clinical and regulatory services, engineering and devices such as OMPULs discussed below and delivery systems. Therapies serviced include immuno-oncology, anti-aging, metabolic, dermatology, orthopedic, as well as regenerative technologies.

The POCare Platform is a unique globally harmonized and decentralized CGT-processing infrastructure that offers cost-effective processing capacities with ease for scalability and reproducibility. By producing personalized cell and gene therapies (CGTs) utilizing the POCare Platform, we are able to add new capacity within months instead of years. Over time, we have worked to develop ~~manufacture, sell~~ and ~~market~~validate POCare Technologies that can be combined within mobile production units for advanced therapies.

We have made significant investments in the ~~products pursuant~~implementation of several therapy types in OMPULs and have made significant progress in the validation, risk analysis, regulatory and other related tasks relating to the ~~milestones~~OMPULs. We are setting up the OMPULs through our POCare Centers. OMPULs are designed for the purpose of validation, development, performance of clinical trials, manufacturing and/or processing of potential or approved cell and ~~time-frame schedule specified~~gene therapy products in a safe, reliable, and cost-effective manner at the point of care, as well as the manufacturing of such CGTs in a consistent and standardized manner in all locations. The design delivers a potential industrial solution for us to deliver CGTs to most clinical institutions at the point of care.

Above are diagrams of an OMPUL and partial interior for illustrative purposes only.

We have finalized or are in the process of finalizing the development of several POCare Centers and adapting to the local requirements of each POCare Center with the target of achieving a capacity to process and supply CGTs per production contracts. As we expand operations, we expect that the OMPUL setup costs will decline over time. Most of our POCare revenue to date is in support of the implementation of technologies and therapies in the OMPULs and production at the POCare Sites.

We have established POCare Centers in several locations globally, in which we perform process development and manufacturing activities for several types of CGT products. For example, in Israel, our POCare Center includes process development and QC labs, as well as OMPULs located at a hospital site in the center of Israel and an additional OMPUL in preparation for an additional hospital. In these OMPULs, we currently manufacture TILs and CAR-T therapies. In Greece, our POCare Center includes three OMPULs installed in place and a process development lab, currently servicing two customers. Our POCare Center in Maryland, USA, includes an operating process development lab. We are also establishing cleanroom-based facility funded by a government grant. In Spain we have an OMPUL producing a clinical grade product.

OBI is our specialized process and technology development wholly-owned subsidiary focused on custom-made process development, upscaling design from lab to industry innovation and automation procedures, which are extremely essential in the cell therapy industry. OBI is located in Bar-Lev Industrial Park utilizing the exclusive Israeli innovative ecosystem and highly experienced and talented associates including Ph.D. holders and biotechnology engineers. The ~~Israeli Subsidiary submitted~~center provides end to end solutions to cell therapy industrialization, process development capabilities and proficiency, custom-made engineering and a unique platform for creative design and process optimization. OBI occupies 1,300 square meters of labs and offices resulting in an efficient and unique environment for cell therapy development. In connection with the ~~Development Plan~~sales of our Masthercell Global subsidiary (“Masthercell Sale”) completed in ~~May 2014.~~

~~Under~~2020, for a period of three years in the ~~License Agreement, THM is entitled~~European Union and five years in the United States and the rest of the world from the closing date of the Masthercell Sale, we agreed that OBI will not manufacture products on a contract basis for third-party customers in any jurisdiction other than the State of Israel, but it may conduct such CDMO business in the State of Israel, solely for customers located within the State of Israel or with respect to ~~terminate~~therapies intended for distribution solely within the ~~License Agreement under certain conditions relating~~State of Israel. The Masthercell sale agreement stipulated that OBI may also conduct, worldwide, (i) point-of-care system, point-of-care products, point-of-care systems, point-of-care processing, and point-of-care development services for the development, manufacturing or processing of therapeutics, processes, systems and technologies to treat patients in a point-of-care clinical, hospital or institutional setting, any future point-of-care services substantially related to the foregoing, and advanced therapy medicinal products either proprietary to us or our affiliates or proprietary to a ~~material change~~third-party partner (including a joint venture partner) or collaborator, which includes research, development, systems, manufacturing and processing of therapeutic technology products, systems, and processes, methods or services and (ii) research, manufacturing, development and other activities related to the research, development, manufacturing, discovery and commercialization of therapeutic products or technologies, and processes, systems, methods or services thereof for its own account or in order to make such products or services available for the account of their third-party partners (including joint venture partners) or collaborators (including such therapeutic products, processes or technologies in which we or one of our affiliates has an economic interest or any relationship with any third-party or that are created, developed, manufactured or sold by a joint venture, partnership or collaboration between us or any of our affiliates and a third-party (individually and collectively, “Permitted Business”).

On February 14, 2024, following a claim for payment of past salaries due, by employees of Orgenesis Biotech Israel Limited (“OBI”), the district court in Haifa appointed a trustee to run the affairs of OBI with the intention of rehabilitating OBI to be able to operate and pay OBI’s creditors under an arrangement with them.

The Korean Subsidiary has a particular focus on developing innovative cell therapies for our customers. In connection with the Masthercell Sale completed in 2020, for a period of three years in the European Union and five years in the United States and the rest of the world from the closing date of the Masthercell Sale, we agreed that the Korean Subsidiary will not manufacture cell and gene products on a contract basis for third-party customers in any jurisdiction other than South Korea, but it may conduct CDMO business in South Korea, solely for customers located within South Korea and with respect to therapies intended for distribution solely within South Korea, provided that the Korean Subsidiary may conduct Permitted Business.

The Tissue Genesis Icellator™ is used to isolate stromal and vascular fraction cells (“SVF”) from a patient’s own (autologous) adipose tissue (fat). The Tissue Genesis Icellators, associated disposable kits, and our proprietary enzyme Adipase™, are made by contract manufacturers and warehoused at our ISO 13485-certified and FDA-registered facility in Texas. From this facility we fill orders for our customers all around the world and maintain research and development labs to support continued product development.

Tissue Genesis International (“TGI”) has expanded its development pipeline from the Icellator to additional systems for automation of Cell and Gene Therapy and incorporation of these various platforms into the OMPULs.

On the Icellator front, in 2022 TGI continued to service our existing customers both domestically and abroad, added new customers, increased revenue from sales, extended shelf-life of existing Icellator inventory, continued Adipase development, and engaged in production of a new lot of disposables.

TGI includes the integration of our ~~Israeli Subsidiary or~~development projects, foremost among them the Control Tower for automation of cGMP cell and gene therapy inside the OMPULs. In 2022 TGI brought this project into the ISO quality system and engaged with contract engineering firms with the requisite experience and that meet our stringent quality assurance standards.

Orgenesis Services SRL specializes on developing innovative cell therapies for our customers. The subsidiary benefits both from its central position in Europe and its being in the leading Walloon biotech cluster. It occupies innovative facilities for the development and quality control of therapies in R&D and GMP grades.

Theracell Laboratories, located in Greece, specializes on developing and processing innovative cell therapies for our customers. It was designated as a ~~breach~~“Priority Investment of ~~any material obligation thereunder or~~Strategic National Importance” by Enterprise Greece, the official Greek national investment and trade promotion agency, which is responsible for the allocation of Greek government funding. As a result of this designation, Theracell will be inducted into Greece’s fast-track licensing and approval process. This is expected to ~~a bankruptcy event~~help advance development and clinical use of our ~~Israeli Subsidiary. Under certain conditions,~~CGT at POCare, subject to regulatory requirements.

In 2023, we continued to focus on setting up our ~~Israeli Subsidiary may terminate~~regional POCare activities. This included the ~~License Agreement~~setup of POCare Centers that oversee regional development and ~~return the licensed information to THM.~~

~~In 2016~~GMP services, local OMPUL deployment and ~~2017, the Israeli Subsidiary entered into a research service agreement with the Licensor. According~~supply of products to the ~~agreements,~~local clinical centers. We are in the ~~Israeli Subsidiary will perform a study at~~process of expanding the ~~facilities~~capacity of our POCare Centers in Maryland, Boston, California, Belgium, Greece, Slovenia, Israel, Italy, Spain and ~~use~~Korea. Future set-up plans include potential sites in the ~~equipment~~U.S. and ~~personnel of the Sheba Medical Center, with annual consideration of approximately $88 thousand~~EU where we already have initial activity such as in Germany and ~~$131 thousand, respectively.~~Texas, as well as in Australia and China.

Our plan is to market and sell AIP cellular therapy as a stand-alone product and to provide supporting education and services to physicians and the healthcare providers that support them. In addition, we expect to provide appropriate and supportive services to the distribution networks that make our product available to treating physicians and facilities. Once marketing authorization is granted, we plan to market our product in North America, Europe and Asia.

As part of our ~~long-term strategy,~~POCare Services, we ~~will consider~~have developed the relevant GMP processes for a variety of therapies such as CAR-T, TILs and MSC based therapies. We have developed OMPULs with the required systems for production of CAR-T, TILs and MSC products, and are working on several other therapies intended for clinical ~~development~~testing. TIL, CAR-Ts and ~~commercialization collaborations and/or partnerships with international companies involved~~MSCs were already produced in the ~~diabetes therapeutic area.~~OMPULs for our customers. We have worked closely with technology partners to adapt various systems for closed system production of the above products and continue our collaboration efforts to develop fully automated systems for integration in the OMPULs.

~~Insulin therapy is used~~We have expanded our collaboration with UC Davis having completed the first production batch of GMP grade lentivirus to be utilized for ~~Insulin-Dependent Diabetes Mellitus (IDDM) patients who are not controlled with oral medications, although this therapy has well-known~~clinical-grade production of CAR-Ts and ~~well-characterized disadvantages. Weight gain is~~the initial engineering batch of a common side effect of insulin therapy, which is a risk factor for cardiovascular disease. Injection of insulin causes pain and inconvenience for patients. Patient compliance and inconvenience of self-administering multiple daily insulin injections is also considered a disadvantage of this therapy. The most serious adverse effect of insulin therapy is hypoglycemia.

~~The global diabetes market comprising~~CAR-T based on the insulin, insulin analogues and other anti-diabetic drugs has been evolving rapidly. Today’s overall diabetes market is dominated by a handful of participants such as Novo Nordisk A/S, Eli Lilly and Company, Sanofi-Aventis, Takeda Pharmaceutical Company Limited, Pfizer Inc., Merck KgaA, and Bayer AG.

~~Subject to raising the necessary funding, we intend to advance our cell therapy business by furthering this licensed technology to a clinical stage.~~Lenti Virus. We intend to ~~devote significant resources to process development~~establish and ~~manufacturing~~validate the decentralized model of OMPUL placement in order to optimize the safety and efficacy of our future product candidates, as well as our cost of goods and time to market. Our goal is to carefully manage our fixed cost structure, maximize optionality, and drive long-term cost of goods as low as possible. We believe that operating our own manufacturing facility will provide the Companycompliance with ~~enhanced control of material supply for both clinical trials and the commercial market, will enable the more rapid implementation of process changes, and will allow for better long-term margins.~~

We carry out our CT business through three wholly-owned and separate subsidiaries. This corporate structure allows us to simply the accounting treatment, minimize taxation and optimize local grant support. Our CT subsidiaries are as follows:

We have embarked on a strategy of collaborative arrangement with strategically situated third parties around the world. We believe that these parties have the expertise, experience and strategic location to advance our clinical development business.

~~On March 14, 2016, our Israeli Subsidiary, entered into a collaboration agreement with CureCell Co., Ltd. (“CureCell”), initially for the purpose of applying for~~regulatory requirements. UC Davis has received a grant from the ~~Korea~~California Institute for Regenerative Medicine (CIRM) to validate the decentralized approach based on our platform. In addition, the parties aim to commercialize and install OMPULs at other sites within the State of California.

We have a partnership with Johns Hopkins University that already includes establishment of an analytical lab at FastForward, Johns Hopkins Technology Ventures’ (JHTV) innovation hub, and an agreed upon placement of an OMPUL.. Other activities include the provision of Kyslecel to eight hospitals in the U.S. Finally, we have deployed OMPULs at leading hospitals in Israel, ~~Industrial R&D Foundation~~Italy and Spain.

We have set up a partnerships in Greece focusing on delivering advanced therapies to Greek hospitals.

Collaboration with the Institute of Cell Therapies (“~~KORIL”~~ICT”), which was established as a part of the University Centre for ~~pre-clinical~~Research and ~~clinical activities related~~Innovation of the University of Patras. Theracell Laboratories will be responsible for the accreditation and operation of the Institute under GMP.

A biomanufacturing unit has been set up in Athens (municipality of Koropi, Attika) The unit is staffed by experts in ATMP development, production quality control and release of medicinal products from fully operational OMPULs under GMP principles.

Pursuant to the ~~commercialization~~Priority Investment of ~~our AIP cell therapy product~~Strategic National Importance designation by Enterprise Greece, Theracell Laboratories received an investment grant covering industrial research activities associated with the development and production of Cell and Gene therapies in Korea (the “KORIL Grant”). Subject to receiving the KORIL Grant, the parties agreed to carry out, at their own expense, their respective commitments under the work plan approved by KORIL and any additional work plan to be agreed between the Israeli Subsidiary and CureCell. The Israeli Subsidiary will own sole rights to any intellectual property developed from the collaboration which is derived under the Israeli Subsidiary’s AIP cell therapy product and information licensed from THM. Subject to obtaining the requisite approval needed to commence commercializationa decentralized manner in Korea, the Israeli Subsidiary has agreed to grant to CureCell, or a fully owned subsidiary thereof, under a separate sub-license agreement an exclusive sub-license to the intellectual property underlying the Company’s AIP product solely for commercialization of the Israeli Subsidiary’s products in Korea. As part of any such license, CureCell has agreed to pay annual license fees, ongoing royalties based on net sales generated by CureCell and its sublicensees, milestone payments and sublicense fees. Under the agreement, CureCell is entitled to share in the net profits derived by the Israeli Subsidiary from world-wide sales (except for sales in Korea) of any product developed as a result of the collaboration with CureCell. Additionally, CureCell was given the first right to obtain exclusive commercialization rights in Japan for adipose-derived AIP product, subject to CureCell procuring all of the regulatory approvals required for commercialization in Japan.Greece. As of the date of this ~~filing, none~~report, no funds have been received. However, once received, the operational costs of the ~~requisite~~activities described above will be covered by the grant.

Our POCare Services are expanding to additional geographies, and we are providing services to the U.S., EU, and Asia.

Our POCare Platform is comprised of three enabling components: a multitude of licensed cell based POCare Therapies to be produced in closed, automated POCare Technology systems across a collaborative POCare Network. Our therapies include, but are not limited to, autologous, cell-based immunotherapies, therapeutics for metabolic diseases, anti-viral diseases, and tissue regeneration. We are establishing and positioning the business to bring point-of-care therapies to patients in a scalable way working directly with hospitals and through regional partners and organizations active in autologous cell therapy product development, including facilities in various countries in North America, Europe, Asia, the Middle East, and Australia. Our goal through the POCare Platform is to enable a rapid, globally harmonized pathway for these therapies to reach large numbers of patients at lowered costs through efficient, and decentralized production. Our POCare Network brings together industry partners, research institutes and hospitals worldwide to achieve harmonized, regulated clinical development and production of the therapies.

We are focused on technology in licensing and therapeutic collaborations, and we out-license therapies marketing rights and manufacturing rights to partners. In many cases, the partners are responsible for the preparation of clinical trials, local regulatory approvals ~~for conducting clinical trials had been obtained.~~

~~Walloon Region, Belgium, Direction Générale Opérationnelle de l'Economie, de l'Emploi & de la Recherche (“DGO6”)~~

~~On March 20, 2012, MaSTherCell was awarded an investment grant from the DGO6 for €1,421 thousand. This grant is related~~and regional marketing activities. Such licensing includes exclusive or nonexclusive, sublicensable, royalty bearing rights and license to the ~~investment~~Orgenesis Background IP as required to manufacture, distribute and market and sell Orgenesis products within the relevant territories. In consideration of the rights and the licenses so granted, we receive a royalty in the ~~production facility with a coverage~~range of ~~32%~~ten percent of the ~~investment planned. A first payment of €568 thousand was received in August 2013. In December 2016,~~net sales generated by the ~~DGO6 paid to MaSTherCell €669 thousand on account of the grant, and the remaining grant amount has been declined.~~

On November 17, 2014, Our Belgian Subsidiary, received the formal approval from the DGO6 for a €2.015 thousand ($2.4 million) support program for the research and development of a potential cure for Type 1 Diabetes. The financial support was composed of a €1,085 thousand (70% of budgeted costs) grant for the industrial research part of the research program and a further recoverable advance of €930 thousand (60% of budgeted costs) of the experimental development part of the research program. In December 2014, the Belgian Subsidiary received advance payment on amount of €1,209 thousand under the grant. The grants are subject to certain conditionspartners and/or licensees or sublicensees (as applicable) with respect to the ~~Belgian Subsidiary’s~~Orgenesis products.

Our business model of partnering with regional partners for initial clinical development of licensed POCare Therapies allows us to de-risk our clinical development plans. We have access to the development and clinical data generated by our partners based on which we can make informed decisions as to which of our assets have the most promising value for development in major markets such as the US and EU. Our goal is once we have proof of concept and clinical data from our regional partners, we can focus on developing such therapeutic products.

Further to revenues generated from out-licensing, we generate revenues from POCare Services and sales which is comprised of:

We have signed POCare development services Master Services Agreements (“MSAs”) with our partners. In terms of the MSAs, we provide certain broadly defined development services that relate to our licensed therapies designed to develop or enhance the therapy with the objective of preparing it for clinical use. Such services, per therapy, include regulatory services, pre-clinical studies, intellectual property services, development services, and GMP process translation. We also provide support services to our customers.

Hospital services includes the sale or lease of products and the performance of processing services to our POCare hospitals or other medical providers. We either work directly with hospitals or receive payments through our regional partnerships.

We provide cell process development services in some regions to third party customers. Those services are unique to the customers who retain the ownership of the intellectual property created through the process.

We provide distributed cell processing services for third party customers at POCare Centers in close proximity to patients.

The biopharmaceutical industry is intensely competitive. There is continuous demand for innovation and speed, and as the ~~DGO6~~cell-based therapies market evolves, there is ~~also entitled~~always the risk that a competitor may be able to ~~a royalty upon revenue being generated from any commercial application ofthe technology. In 2017 we received from the DGO6 approval~~develop other compounds or drugs that are able to achieve similar or better results for ~~Euro 1.8 million costs invested in the project, out~~indications. Potential competition includes major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, and other research institutions. Many of which Euro 1,192 thousand was funded by the DGO6. During 2017 we repaid to the DGO6 the down payments of €17 thousand. In addition, the final recoverable advance under this project is €150 thousand, out of which €15 thousand was paid by the Belgian Subsidiary during 2017.

On April 2016, our Belgian Subsidiary received the formal approval from DGO6 for a budgeted €1,304 thousand ($1,455 thousand) support program for the development of a potential cure for Type 1 Diabetes. Thethese competitors have substantially greater financial, ~~support was awarded to our Belgian Subsidiary~~technical, and other resources, such as a recoverable advance payment at 55% of budgeted costs, or for a total of €717 thousand ($800 thousand). The grant will be paid over the project period. On December 19, 2016, our Belgian Subsidiary received a first payment of €359 thousand ($374 thousand). In 2017, the DGO6 approved a no cost extension for the program until August 31, 2017. The total expenses under the program through November 30, 2017 were €787 thousand ($900 thousand). In addition, the DGO6 is also entitled to a (i) revocable advance of €215 thousand ($250 thousand) and (ii) a royalty upon revenue being generated from any commercial application ofthe technology.

On October 8, 2016, our Belgian Subsidiary received the formal approval from the DGO6 for a budgeted €12.3 million ($12.8 million) support program for the GMP production of AIP cells for two clinical trials that will be performed in Germany and Belgium. The project will be held during a period of three years commencing January 1, 2017. The financial support is awarded to our Belgian Subsidiary at 55% of budgeted costs, a total of €6.8 million ($7 million). The grant will be paid over the project period. On December 19, 2016, our Belgian Subsidiary received a first payment of €1.7 million ($1.8 million). The total expenses under the program through November 30, 2017 were €1,224 thousand ($1,451 thousand).

~~Israel-U.S Binational Industrial Research and Development Foundation (“BIRD”)~~

On September 9, 2015, our Israeli Subsidiary, entered into a pharma Cooperation and Project Funding Agreement (CPFA) with BIRD and Pall Corporation, a U.S. company. BIRD will give a conditional grant of $400 thousand each (according to terms defined in the agreement), for a jointlarger research and development ~~project for the use~~staff and experienced marketing and manufacturing organizations with established sales forces. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies.

Currently, we are not aware of any other companies pursuing a business model similar to what we are developing under our AIP cells for the treatment of diabetes (the “BIRD Project”). The BIRD Project started on March 1, 2015. Upon the conclusion of product development, the grant shall be repaid at the rate of 5% of gross sales. The grant will be used solely to finance the costs to conduct the research of the BIRD Project during a period of 18 months starting on March 1, 2015 and up to the date the Israeli Subsidiary received $200 thousand under the grant. On July 28, 2016, BIRD approved an extension until May 31, 2017 and the final report was submitted to BIRD. The total expenses under the program through November 30, 2017 were $717 thousand.

~~On May 26, 2016,~~POCare Platform. However, our Israeli Subsidiary entered into a pharma Cooperation ad Project Funding Agreement (CPFA) with KORIL and CureCell. KORIL will give a conditional grant of up to $400 thousand each (according to terms definedcompetitors in the ~~agreement), for~~CGT field who are significantly larger and better capitalized than us could undertake strategies similar to what we are pursuing and even develop them at a ~~joint research and development project for~~much more rapid rate. These potential competitors include the use of AIP Cells for the Treatment of Diabetes (the “Project”). The Project started on June 1, 2016. Upon the conclusion of product development, the grant shall be repaid at the yearly rate of 2.5% of gross sales. The grant will be used solely to finance the costs to conduct the research of the project during a period of 18 months starting on June 1, 2016. On June 2016, we received $160 thousand under the grant. The total expenses under the program through November 30, 2017 were $368 thousand.

On June 30, 2014, our U.S. Subsidiary entered into a grant agreement with Maryland Technology Development Corporation (“TEDCO”). TEDCO was created by the Maryland State Legislature in 1998 to facilitate the transfer and commercialization of technology from Maryland’s researchsame multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, and ~~federal labs into the marketplace and to assist~~other research institutions that are operating in the ~~creation and growth of technology-based businesses in all regions of the State. TEDCO is an independent organization~~CGT field. In that ~~strives~~respect, smaller or early-stage companies may also prove to be Maryland’s lead source for entrepreneurial business assistance and seed funding for the development of start-up companies in Maryland’s innovation economy. TEDCO administers the Maryland Stem Cell Research Fund to promote State funded stem cell research and curessignificant competitors, particularly through financial assistance to public and private entities within the State. Under the agreement, TEDCO has agreed to give the U.S. Subsidiary an amount not to exceed approximately $406 thousand (the “TEDCO Grant”). The TEDCO Grant was used solely to finance the costs to conduct the research project entitled AIP during a period of two years.collaborative arrangements with large, established companies.

On July 22, 2014 and September 21, 2015, the U.S subsidiary received an advance payment of $406 thousand on account of the grant. On June 21, 2016, TEDCO approved an extension until June 30, 2017. Through November 30, 2017, the Company utilized $356 thousand.

We incurred $3,326 and $2,637 thousand in research and development expenditures in the fiscal years ended November 30, 2017 and 2016, respectively, of which $848 thousand and $480 thousand was covered by grant funding.

We will be able to protect our technology and products from unauthorized use by third parties only to the extent it is covered by valid and enforceable claims of our patents or is effectively maintained as trade secrets. Patents and other proprietary rights are thus an essential element of our business.

Our success will depend in part on our ability to obtain and maintain proprietary protection for our product candidates, technology, and know-how, to operate without infringing on the proprietary rights of others, and to prevent others from infringing itour proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, filing U.S. and foreign patent applications related to our proprietary technology, inventions, and improvements that are important to the development of our business. We also rely on trade secrets, know-how, continuing technological innovation, and in-licensing opportunities to develop and maintain our proprietary position.

In addition, we own or have exclusive rights to ~~four (4)~~thirty-two (32) United States ~~and seven (7) foreign issued~~ patents, ~~three (2)~~eighty-seven (87) foreign-issued patents, twelve (12) pending patent applications in the United States, ~~eleven (11)~~fifty three (53) pending patent applications in foreign jurisdictions, including ~~Europe,~~ Australia, Brazil, Canada, China, ~~Eurasia,~~Europe, Hong Kong, India, Israel, Japan, Mexico, New Zealand, North Korea, Panama, Russia, Singapore, South Africa, and South Korea, and fifteen (15) international Patent Cooperation Treaty (“PCT”) patent applications. These patents and patent applications relate, among others, to (1) dendritic cell based (whole cell) vaccines, and their use for treating cancer and viral diseases; (2) compositions comprising Ranpirnase and other ribonucleases and their use for treating viral diseases; (3) tumor infiltrating lymphocytes (TILs) and their use for treating cancer; (4) compositions comprising immune cells, ribonucleases, or antibodies for treating COVID-19; (5) therapeutic compositions comprising exosomes, bioxomes, and redoxomes; (6) bioreactors for cell culture and automated devices for supporting cell therapies; (7) chimeric antigen receptors (CARs); (8) Mobile Processing Units; (9) Cell-delivery devices; and (10) skin diseases treatment and anti-aging compositions.

We have a granted U.S. patent and a pending U.S. patent application directed, among others, to dendritic cell-based (whole cell) vaccines, and their use for treating cancer and viral diseases. If issued, any patents based on these applications will expire in 2037. The granted U.S. patent will expire in 2037.

We have granted and pending U.S. patent applications directed, among others, to compositions comprising Ranpirnase and other ribonucleases for the treatment of viral diseases. Granted U.S. patents and if issued, any patents based on these applications will expire between 2024 and 2042. Counterpart granted patents and patents applications were filed in Australia, Canada, China, Europe, Hong Kong, Japan, Israel, Mexico, ~~and~~New Zealand, South Korea, Russian Federation, Singapore, and ~~one (1) international PCT~~South Africa. If issued, any patents based on these applications will expire between 2035 and 2042. These expiration dates do not include any patent term extensions that might be available following the grant of marketing authorizations.

We have pending U.S. patent applications directed, among others, to therapeutic compositions comprising exosomes, bioxomes, and redoxomes. If issued, any patents based on these applications will expire between 2029 and 2041. Counterpart patents applications were filed in Australia, Brazil, Canada, China, Europe, India, Israel, Japan, Singapore and South Korea. If issued, any patents based on these applications will expire in 2039 and 2041. These expiration dates do not include any patent term extensions that might be available following the grant of marketing authorizations.

We have pending U.S. patent applications directed, among others, to compositions comprising ribonucleases and antibodies or bioxomes, and their use for treating viral diseases, including COVID-19. Counterpart patent application ~~relating~~was also filed in Israel. If issued, any patents based on these applications will expire in 2042, without including any patent term extensions that might be available following the grant of marketing authorizations. A counterpart patent application was filed in Israel.

We have a pending International PCT application directed, among others, to compositions comprising immune cells for treating COVID-19. If converted into national phase applications and issued, any patents based on these applications will expire in 2042, without including any patent term extensions that might be available following the grant of marketing authorizations.

We have granted U.S. patents and a granted AU patent, pending U.S. patent applications, directed, among others, to bioreactors for cell culture and automated devices for supporting cell therapies. The granted U.S. patents will expire in 2027, and the granted AU patent will expire in 2026. If issued, any patents based on these applications will expire in 2042. Counterpart patent applications were filed in Australia, Europe, Israel, and Korea.

We have a pending US patent application directed, among others, to tumor infiltrating lymphocytes (TILs) and their use for treating cancer. If issued, patents will expire in 2042, without including any patent term extensions that might be available following the grant of marketing authorizations.

We have a pending U.S. patent application directed, among others, to compositions comprising mesenchymal stem cells, and their use for treating solid tumors. If issued, any patent based on this application would expire in 2040. Counterpart patent applications were filed in China, Europe, and Israel. If issued, any patents based on these applications would expire in 2040. These expiration dates do not include any patent term extensions that might be available following the grant of marketing authorizations.

We have a pending International PCT application directed, among others, to methods of treating cancer or CNS-related diseases by intranasal administration of an oncolytic virus. If converted into national phase applications and issued, any patents based on these applications will expire in 2043, without including any patent term extensions that might be available following the grant of marketing authorizations.

We have two pending U.S. patent application and a pending international patent application, directed, among others, to chimeric antigen receptors (CARs), and their use for treating malignancies. If issued, any patents based on the U.S. applications would expire in 2040 or 2042, without including any patent term extensions that might be available following the grant of marketing authorizations.

We have a pending International PCT application and a pending U.S. patent application directed, among others, to mobile processing laboratories configured for performing there within a cell therapy process. A counterpart patent application was filed in Europe. If issued, any patents based on these applications would expire in 2042, without including any patent term extensions that might be available following the grant of marketing authorizations.

We have a pending U.S. patent application and a pending PCT application, directed, among others, to a composition comprising topiramate and bioxome, redoxome, HA, extracellular vesicles (EV), or PRP extracellular vesicles and its use for the treatment of a dermatological condition. If converted into national phase applications and issued, any patents based on these applications would expire in 2042 and 2043, without including any patent term extensions that might be available following the grant of marketing authorizations.

The Israeli Subsidiary has exclusive rights to seven (7) United States patents, thirty (30) foreign-issued patents, and three (3) pending patent applications in foreign jurisdictions, including Brazil, Canada, and Europe. These patents and patent applications relate, among others, to the trans-differentiation of cells (including hepatic cells) to cells having pancreatic ~~β-cell~~β-cell-like phenotype and function and to their use in the treatment of degenerative pancreatic disorders, including diabetes, pancreatic cancer and pancreatitis.

Granted U.S. patents, which are directed to ~~methods~~trans-differentiation to pancreatic β-cell-like phenotype and function cells and to their use in the treatment of ~~making trans-differentiated cells~~degenerative pancreatic disorders, including diabetes, pancreatic cancer and pancreatitis, will expire between ~~2021~~2024 and ~~2024, excluding any patent term extensions that might be available following the grant of marketing authorizations. Granted~~2040. Counterpart patents ~~outside of~~granted in Austria, Australia, Belgium, China, Eurasia, France, Germany, Greece, Israel, Switzerland, Japan, Mexico, Panama, Singapore, South Korea, and the United ~~States directed to making trans-differentiated cells and their uses~~Kingdom, will expire between ~~2020~~2024 and ~~2024.~~ 2035.

We also own IP and related Extracellular Vesicle (“EV”) Technology pursuant to an EV purchase agreement (the “EV Agreement”). Pursuant to the EV Agreement, we received all of the rights in EV technology purchased. In addition, we received an exclusive worldwide license to use the EV IP technology for any purpose.

We are required to comply with the regulatory requirements of various local, state, national and international regulatory bodies having jurisdiction in the countries or localities where we manufacture products, where our OMPULs are established or where we plan to supply products. In particular, we are subject to laws and regulations concerning research and development, testing, manufacturing processes, equipment and facilities, including compliance with GMPs, labeling and distribution, import and export, facility registration or licensing, and product registration and listing. As a result, our facilities are subject to regulation in Israel and South Korea. We are also required to comply with environmental, health and safety laws and regulations, as discussed below. These regulatory requirements impact many aspects of our operations, including manufacturing, developing, labeling, packaging, storage, distribution, import and export and record keeping related to customers’ products. Noncompliance with any applicable regulatory requirements can result in government refusal to approve facilities for manufacturing products or products for commercialization.

Both of our products and our customers’ products must undergo pre-clinical and clinical evaluations relating to product safety and efficacy before they are approved as commercial therapeutic products. The regulatory authorities that have ~~pending patent applications for methods~~jurisdiction in the countries in which our and our customers’ products are intended to be marketed may delay or put on hold clinical trials, delay approval of ~~making our~~a product or determine that the product ~~itself,~~is not approvable. The regulatory agencies can delay approval of a drug if our manufacturing facilities or OMPULs are not able to demonstrate compliance with cGTPs, pass other aspects of pre-approval inspections (i.e., compliance with filed submissions) or properly scale up to produce commercial supplies. The government authorities having jurisdiction in the countries in which our customers intend to market their products have the authority to withdraw product approval or suspend manufacture if there are significant problems with raw materials or supplies, quality control and ~~methods of using~~assurance or the product ~~that,~~is deemed adulterated or misbranded. In addition, if ~~issued, would expire~~new legislation or regulations are enacted or existing legislation or regulations are amended or are interpreted or enforced differently, we may be required to obtain additional approvals or operate according to different manufacturing or operating standards or pay additional fees. This may require a change in our manufacturing techniques or additional capital investments in our facilities.

Certain products manufactured by us involve the ~~United States~~use, storage and ~~in countries outside~~transportation of ~~the United States between 2034~~toxic and ~~2035, excluding any patent term adjustment that might be available following the grant of the patent~~hazardous materials. Our operations are subject to extensive laws and ~~any patent term extensions that might be available following the grant of marketing authorizations. These pending patent applications are directed~~regulations relating to the ~~following specific compositions~~storage, handling, emission, transportation and ~~methods: a method~~discharge of producing a transdifferentiated population of cells, a population of transdifferentiated cells, a method of treating a degenerative pancreatic disorder in a subject in need, a method of isolating a population of cells that have an enriched capacity for transcription factor induced trans-differentiation, an isolated population of cells having enriched trans-differentiation capacity, a method of increasing trans-differentiation efficiency in a population of cells, a population of liver cells enriched for cells predisposed to trans-differentiation, and a method of manufacturing a population of human insulin producing cellsmaterials into the environment and the ~~population~~maintenance of ~~cells produced by the recited manufacturing method.~~safe working conditions. We maintain environmental and industrial safety and health compliance programs and training at our facilities.

~~We have not sought approval from the FDA~~Prevailing legislation tends to hold companies primarily responsible for the ~~AIP cells. Among all forms~~proper disposal of ~~cell therapy modalities,~~their waste even after transfer to third party waste disposal facilities. Other future developments, such as increasingly strict environmental, health and safety laws and regulations, and enforcement policies, could result in substantial costs and liabilities to us and could subject the handling, manufacture, use, reuse or disposal of substances or pollutants at our facilities to more rigorous scrutiny than at present.

Our development operations involve the controlled use of hazardous materials and chemicals. Although we believe that our procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we may incur significant additional costs to comply with applicable laws in the future. Also, even if we are in compliance with applicable laws, we cannot completely eliminate the risk of contamination or injury resulting from hazardous materials or chemicals. As a result of any such contamination or injury, we may incur liability or local, city, state or federal authorities may curtail the use of these materials and interrupt our business operations. In the event of an accident, we could be held liable for damages or penalized with fines, and the liability could exceed our resources. Compliance with applicable environmental laws and regulations is expensive, and current or future environmental regulations may impair our contract manufacturing operations, which could materially harm our business, financial condition and results of operations.

The costs associated with complying with the various applicable local, state, national and international regulations could be significant and the failure to comply with such legal requirements could have an adverse effect on our results of operations and financial condition. See “Risk Factors — Risks Related to Development and Regulatory Approval of Our Therapies and Product Candidates — Extensive industry regulation has had, and will continue to have, a significant impact on our business, especially our product development, manufacturing and distribution capabilities.” for additional discussion of the costs associated with complying with the various regulations.

Our therapeutic product portfolio pipeline is diverse and addresses various unmet clinical needs. It is predominantly comprised of personalized autologous cell ~~replacement therapy seems~~therapies, implying that patients receive cells that originate from their own body, virtually eliminating the risk of an immune response and rejection and thus easing various regulatory hurdles. In addition, by leveraging our vast experience and proven track record in developing and optimizing cell processing, these selective therapies are adapted to be produced in closed, automated systems, reducing the need for health care provider in-house, high-grade and expensive cleanroom environments. The systems enable each stage of the ~~highest benefit. We believe that it seems~~manufacturing process (cell sorting, expansion, genetic modifications, quality control) to be ~~safer than other options as it does not alter~~optimized in order to substantially reduce the ~~host genome but only alters~~cost burden for patients and making the ~~set~~therapies widely accessible. Notably, some of ~~expressed epigenetic information that seems to be highly specific~~our therapeutic pipeline is developed by researchers from our network and is subsequently out-licensed to the ~~reprogramming protocol. It provides an abundant source~~researcher for its territory and validated in multi-center clinical trials conducted across point of ~~therapeutic tissue, which is not rejected by~~care partner sites leveraging the patient and does not have to be treated by immune suppressants. It is highly ethical since no human organ donations or embryo-derived cells are needed. The proposed therapeutic approach does not require cell bio-banking at birth, which is both expensive and cannot be used for patients born prior to 2000.

~~Over the past decade, many studies published in leading scientific journals confirmed the capacity of reprogramming adult cells from many~~robustness of our ~~mature organs~~POCare Network. Having access to ~~either alternate organs or~~a portfolio of therapeutics, for the most attractive products, the Company intends to ~~“stem like cells”. Most widely used autologous cell replacement protocols are used~~than seek additional regulatory approvals and offer the products for ~~autologous implantation of bone marrow stem cells. This protocol is widely used in patients undergoing~~sale to medical institutions globally within our network In exchange, the inventors will receive a massive chemotherapy session that destroys their bone marrow cells. However, the stem cells used for cancer patients delineated above do not require extensive manipulation and is regarded by FDA as “minimally manipulated”.royalty.

An additional autologous cell therapy approach already used in man is autologous chondrocyte implantation (ACI). In the United States, Genzyme Corporation provides the only FDA approved ACI treatment called Carticel. The Carticel treatment is designated for young, healthy patients with medium to large sized damage to cartilage. During an initial procedure, the patient’s own chondrocytes are removed arthroscopically from a non-load-bearing area from either the intercondylar notch or the superior ridge of the medial or lateral femoral condyles.

~~To aid us in our efforts to achieve the highest level of compliance with FDA requirements, we have looked to hire experts in the field of pharmaceutical compliance.~~

Our potential product iscandidates are subject to regulation as a biological product under the Public Health Service Act and the Food, Drug and Cosmetic Act. The FDA generally requires the following steps for pre-market approval or licensure of a new biological product:

In addition, prior to the general regulatory process of a new biologic products, we expect to pursue an Orphan Drug Designation for treatment of Patients with Established Diabetes Mellitus (DM) Induced by Total pancreatectomy). The Orphan Drug Designation program provides orphan status to drugs and biologics which are defined as those intended for the safe and effective treatment, diagnosis or prevention of rare diseases/disorders that affect fewer than 200,000 people in the U.S. Orphan designation qualifies the sponsor of the drug for various development incentives of the ODA, including tax credits for qualified clinical testing. A marketing application for a prescription drug product that has received orphan designation is not subject to a prescription drug user fee unless the application includes an indication for other than the rare disease or condition for which the drug was designated.

~~Obtaining Orphan drug designation will provide the following financial incentives:~~

In the European Union (“EU”) ~~has approved a regulation specific to~~somatic cell and ~~tissue~~gene therapy ~~product, the~~products are called Advanced Therapy Medicinal Product ~~(ATMP) regulation.~~(ATMPs). Since January 2022 the Clinical Trial Regulation (EU) 536/2014 regulates the application of medicinal products including ATMPs to humans immediately effective in all member states. In conjunction with Regulation 536/2014 the EU commission has released two delegated acts regulating manufacturing of investigational as well as marketed AMPs. For products ~~such as our AIP cells~~ that are regulated as an ATMP, ~~the EU Directive~~

Exemption from the centralized procedure was introduced into the ATMP Regulation to allow marketing of certain ATMPs in individual EU member states. The so-called “hospital exemption” can only be applied for custom-made ATMPs used in a hospital setting for a specific patient by a treating physician. In addition, a competent authority must authorize hospital exemption for ATMPs. Hospital exemption products must comply with the ~~U.S., prior~~same national requirements concerning quality, traceability and pharmacovigilance that apply to the general regulatory process of a new biologic products, we will prosecute an Orphan Drug Designation for treatment of Patients with Established Diabetes Mellitus (DM) Induced by Total pancreatectomy). In the EU, in orderauthorized medicinal products. The “hospital exemption” has to be ~~qualified, the prevalence must be below 5 per 10,000 of the~~applied for individually in each EU ~~population, except where the expected return on investment is insufficient~~member state according to ~~justify the investment.~~national procedures and control measures.

Authorized orphan medicines benefit from ten years of protection from market competition with similar medicines with similar indications once they are approved. Companies applying for designated orphan medicines pay reduced fees for regulatory activities. This includes reduced fees for protocol assistance, marketing-authorization applications, inspections before authorization, applications for changes to marketing authorizations made after approval, and reduced annual fees.

Typically, both in the U.S. and the EU, clinical testing involves a three-phase process, although the phases may overlap. In Phase I, clinical trials are conducted with a small number of healthy volunteers or patients and are designed to provide information about product safety and to evaluate the pattern of drug distribution and metabolism within the body. In Phase II, clinical trials are conducted with groups of patients afflicted with a specific disease in order to determine preliminary efficacy, optimal dosages and expanded evidence of safety. In some cases, an initial trial is conducted in diseased 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 trial. Phase III clinical trials are generally large-scale, multi-center, comparative trials conducted with patients afflicted with a target disease in order to provide statistically valid proof of efficacy, as well as safety and potency. In some circumstances, the FDA or EMA may require Phase IV or post-marketing trials if it feels that additional information needs to be collected about the drug after it is on the market. During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, as well as clinical trial investigators. An agency may, at its discretion, re-evaluate, alter, suspend, or terminate the testing based upon the data that have been accumulated to that point and its assessment of the risk/benefit ratio to the patient. Monitoring all aspects of the study to minimize risks is a continuing process. All adverse events must be reported to the FDA or ~~EMA~~.EMA.

As of ~~November 30, 2017,~~December 31, 2023, we, including Octomera, had ~~103 full-time~~an aggregate of 146 employees working at our ~~Company~~company and ~~subsidiaries.~~Subsidiaries. In addition, we retain the services of outside consultants for various functions including clinical work, finance, accounting and business development services. Most of our senior management and professional employees have had prior experience in pharmaceutical or biotechnology companies. None of our employees isare covered by collective bargaining agreements. We believe that ~~our~~we have good relations with our employees.

We believe that our future success largely depends upon our continued ability to attract and retain highly skilled employees. Biotechnology companies both large and small compete for a limited number of qualified applicants to fill specialized positions. To attract qualified applicants, we offer a total rewards package consisting of base salary and cash target bonus, a comprehensive benefit package and equity compensation to select employees. Bonus opportunity and equity compensation increase as a percentage of total compensation based on level of responsibility. Actual bonus payout is based on performance.

Much of our success is rooted in the diversity of our teams and our commitment to inclusion. We value diversity at all levels. We believe that our business benefits from the different perspectives a diverse workforce brings, and we pride ourselves on having a strong, inclusive and positive culture based on our shared mission and values. This is reflected in our numbers with our total workforce being approximately 55% women, 12% ethnically diverse and 51% over the age of 40.

Our commitment to integrating sustainability across our organization begins with our Board of Directors, or the Board. The Nominating and Governance Committee of the Board has oversight of strategy and risk management related to Environmental, Social and Governance, or ESG. All employees are ~~good.~~

~~Orgenesis Inc. is a Nevada corporation,~~responsible for upholding our core values, including to communicate, collaborate, innovate and be respectful, as well as for adhering to our Code of Ethics and Business Conduct, including our policies on bribery, corruption, conflicts of interest and our ~~subsidiaries currently consist~~whistleblower program. We encourage employees to come to us with observations and complaints, ensuring we understand the severity and frequency of ~~MaSTherCell, S.A. (“MaSTherCell”), Orgenesis SPRL (the “Belgian Subsidiary), Orgenesis Ltd. (the “Israeli Subsidiary”), Orgenesis Maryland Inc.~~an event in order to escalate and ~~Cell Therapy Holdings S.A.~~assess accordingly. Our Chief Compliance Officer strives to ensure accountability, objectivity, and compliance with our Code of Conduct. If a complaint is financial in nature, the Audit Committee Chair is notified concurrently, which triggers an investigation, action, and report.

We are committed to protecting the environment and attempt to mitigate any negative impact of our operations. We monitor resource use, improve efficiency, and at the same time, reduce our emissions and waste. We are systematically addressing the environmental impacts of the buildings we ~~classify each subsidiary~~rent as we make improvements, including adding energy control systems and ~~each joint venture partner between its two business units:~~other energy efficiency measures. Waste in our own operation is minimized by our commitment to reduce both single-use plastics and operating paper-free, primarily in a digital environment. We have safety protocols in place for handling biohazardous waste in our labs, and we use third-party vendors for biohazardous waste and chemical disposal.

Our ~~annual report~~Annual Report on Form 10-K, ~~quarterly reports~~Quarterly Reports on Form 10-Q, ~~current reports~~Current Reports on Form 8-K, and all amendments to those reports are ~~made~~ available free of charge though our ~~Internet~~ website ~~(http:~~(http://~~www.orgenesis.com)~~www.orgenesis.com) as soon as practicable after such material is electronically filed with, or furnished to, the Securities and Exchange ~~Commission.~~Commission (the “SEC”). Except as otherwise stated in these documents, the information contained on our website or available by hyperlink from our website is not incorporated by reference into this report or any other documents we file, with or furnish to, the ~~Securities~~SEC.

Our common stock is listed and ~~Exchange Commission.~~traded on the Nasdaq Capital Market under the symbol “ORGS.”

As used in this Annual Report on Form 10-K and unless otherwise indicated, the term “Company” refers to Orgenesis Inc. and its Subsidiaries. Unless otherwise specified, all amounts are expressed in United States Dollars.

Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the SEC, before making an investment decision regarding our common stock.

An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this report in evaluating our company and its business before purchasing shares of our company’s common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. You could lose all or part of your investment due to any of these risks.

~~We will need~~Our POCare business has a limited operating history and an unproven business model and faces significant challenges as the cell therapy industry is rapidly evolving. Our prospects may be considered speculative and any failure to ~~raise capital in order to realize~~execute our business ~~plan, the failure of which~~strategy could adversely impact our ~~operations.~~operations and the price of our common stock.

Our POCare business has a limited operating history and an unproven business model. Our plans to continue to grow our POCare cell therapy business and to further the development of ATMPs are subject to significant challenges. Although we have sufficient capital resources for the next 12 months ~~from~~and the ~~date of issuance of these financial statements. Without adequate funding or a significant increase in revenues,~~foreseeable future, we may not be able to ~~expand~~implement our ~~global CDMO network, establish additional CDMO facilities in the United States or other parts of the world, seek out strategic CDMO acquisitions~~POCare business or commence clinical trials ~~for our diabetes solution~~ or respond to competitive ~~pressures. As of November 30, 2017, we had available cash resources of $3.5 million.~~

~~Overall, we have funded~~pressures due to other non-financial factors beyond our ~~cash needs from inception through the date hereof with a series of debt and equity transactions, grants from governmental agencies and, more recently, through cash flow from~~control. Our failure to effectively execute our ~~revenue generating operations from MaSTherCell.~~

~~We expect to continue to finance our operations, acquisitions and develop strategic relationships, primarily by issuing equity or convertible debt securities, which~~business strategy could significantly reduce the percentage ownership of our existing stockholders. Furthermore, any newly issued securities could have rights, preferences and privileges senior to those of our existing common stock. Moreover, any issuances by us of equity securities may be at or below the prevailing market price of our common stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of our common stock to decline. We may also issue securities in one or more of our subsidiaries, and these securities may have rights or privileges senior to those of our common stock.

We may have difficulty obtaining additional funds as and when needed, and we may have to accept terms that would adversely affect our stockholders. In addition, any adverse conditions in the credit and equity markets may adversely affect our ability to successfully grow our POCare business and develop cell therapy product candidates, which could cause the value of your investment in our common stock to decline.

Our management, as of December 31, 2023, and our independent registered public accounting firm, in its report on our financial statements as of and for the fiscal year ended December 31, 2023, have concluded that there is substantial doubt as to our ability to continue as a going concern.

Our audited financial statements for the fiscal year ended December 31, 2023 were prepared assuming that we will continue as a going concern. The going concern basis of the presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and satisfy our liabilities in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from our inability to continue as a going concern. As of December 31, 2023, our management concluded that, based on expected operating losses and negative cash flows, there is substantial doubt about our ability to continue as a going concern for the twelve months after the date the financial statements were issued. Our ability to continue as a going concern is subject to our ability to raise ~~funds when needed. Any failure~~additional capital through equity offerings or debt financings. However, we may not be able to ~~achieve adequate funding will delay~~secure additional financing in a timely manner or on favorable terms, if at all. If we cannot continue as a going concern, we may have to liquidate our ~~development programs~~assets and ~~product launches~~may receive less than the value at which those assets are carried on our financial statements, and ~~could lead~~it is likely that our stockholders may lose some or all of their investment in us. If we seek additional financing to ~~abandonment of one or more of~~fund our ~~development initiatives,~~business activities in the future and there remains substantial doubt about our ability to continue as well as prevent us from responding to competitive pressures or take advantage of unanticipated acquisition opportunities. Any additional equity financing will likely be dilutive to stockholders, and certain types of equity financing, if available, may involve restrictive covenantsa going concern, investors or other ~~provisions that would limit how we conduct our business~~financing sources may be unwilling to provide additional funding on commercially reasonable terms or ~~finance our operations.~~at all.

We ~~have no history~~are not profitable as of ~~profitability,~~ December 31, 2023, have limited cash flow and, unless we increase revenues and ~~cash flow or raise additional capital, we may be unable to~~ take advantage of any commercial opportunities that arise orto expand ~~CDMO operations, all~~our POCare business, the perceived value of ~~which~~our company may decrease and our stock price could ~~adversely impact us.~~be affected accordingly.

For the ~~fiscal~~ year ended ~~November 30, 2017~~December 31, 2023 and as of the date of this report, we assessed our financial condition and concluded that ~~we have sufficient~~based on current and projected cash resources and commitments, there is a substantial doubt about the Company’s ability to continue as a going concern to meet the Company’s current operations for the next 12 months from the date of ~~the~~this report. Our ~~auditors agreed with our assessment, and the auditor's~~auditor’s report for the year ended ~~November 30, 2017 does not include~~December 31, 2023 includes a going concern ~~emphasis~~opinion on the matter. However, management is still required to assess our ability to continue as a going concern. We had a net loss of $12.4 million for the year ended November 30, 2017. During the same period, cash used in operations was $3.8 million, the working capital deficiency and accumulated deficit as of November 30, 2017 was $9.6 million and $44.1 million, respectively. Management is unable to predict if and when we will be able to generate significant ~~positive cash flow~~revenues or achieve profitability. Our plan regarding these matters is to ~~strengthen our revenues and~~ continue improving the net results in ~~the CDMO segment and to raise additional equity financing to allow us the ability to cover~~ our ~~cash flow requirements~~POCare business into fiscal year ~~2019.~~2024. There can be no ~~assurances~~assurance that we will be successful in increasing revenues, improving ~~CDMO segment~~our POCare results or that ~~financing~~the perceived value of our Company will ~~be available or, if available, that such financing will be available under favorable terms.~~increase. In the event that we are unable to generate ~~adequate~~significant revenues in our POCare business, our stock price could be adversely affected.

Our research and development programs are based on novel technologies and are inherently risky.

We are subject to ~~cover expenses~~the risks of failure inherent in the development of products based on new technologies. The novel nature of our cell therapy technology creates significant challenges with respect to product development and ~~cannot~~optimization, manufacturing, government regulation and approval, third-party reimbursement and market acceptance. For example, the FDA and EMA have relatively limited experience with the development and regulation of cell therapy products and, therefore, the pathway to marketing approval for our cell therapy product candidates may accordingly be more complex, lengthy and uncertain than for a more conventional product candidate. The indications of use for which we choose to pursue development may have clinical effectiveness endpoints that have not previously been reviewed or validated by the FDA or EMA, which may complicate or delay our effort to ultimately obtain ~~additional financing into fiscal year 2019,~~FDA or EMA approval. Because this is a new approach to treating diseases, developing and commercializing our product candidates subjects us to a number of challenges, including:

Our efforts to overcome these challenges may not prove successful, and any product candidate we ~~may need~~seek to ~~cut back or curtail our expansion plans.~~

~~As of November 30, 2017, we owed significant amounts of money under convertible loan agreements and, unless these amounts are converted into common stock or we raise significant working capital, we~~develop may not be ~~able to pay them when due.~~successfully developed or commercialized.

As of November 30, 2017, we owed approximately $8.7 million in principal amount and accrued interest under convertible loan agreements with third party lenders with varying maturity dates, the latest of which is August 22, 2019. The operative agreements provide that the holders of these notes can voluntarily convert them into shares of our common stock at fixed pre-arranged rates. As of the date of this filing, noteholders holding approximately $6.1 million of these convertible notes had agreed to convert all outstanding principal and interest into units, consisting of one share of our common stock at $6.24 and a warrant for one share of common stock at an exercise price of $6.24 per share. However, unless these balance of the outstanding amounts are converted (whether mandatorily or voluntarily) or we raise sufficient working capital, we

Kyslecel may not ~~be able to repay these notes at their stated maturity. Non-payment of these amounts will entitle the holders to take action to recovered payment,~~achieve patient or market acceptance, which ~~may result in attachments or liens on our asset. Any of these developments will~~could have a material adverse effect on our business.

Our commercialization strategy for Kyslecel relies on medical specialists, medical facilities and patients adopting TP-IAT with Kyslecel as an accepted treatment for chronic pancreatitis. However, medical specialists are historically slow to adopt new treatments, regardless of perceived merits, when older treatments continue to be supported by established providers. Overcoming such resistance often requires significant marketing expenditure or definitive product performance and/or pricing superiority. The cost of allocating resources for such requirements might severely impact the potential for profitability of Kyslecel.

There is no guarantee that physician or patient acceptance of TP-IAT with Kyslecel will be substantial. Further, there is no guarantee that Koligo will be able to achieve patient acceptance or obtain enough customers (clinical providers) to meet its sales objectives. If we do not meet our sales objectives, our business prospects and financial ~~condition~~performance will be materially and ~~prospects.~~adversely affected.

Further, we are partially reliant on published clinical trials and scientific research conducted by third parties to justify the patient benefit and safety of TP-IAT with Kyslecel and, as such, we rely, in part, on the accuracy and integrity of those third-parties to have reported the results and correctly collected and interpreted the data from all clinical trials conducted to date. If published data turn out to later be incorrect or incomplete, our business prospects and financial performance may be materially and adversely affected.

The therapeutic efficacy of Ranpirnase and our other product candidates is unproven in humans, and we may not be able to successfully develop and commercialize Ranpirnase or any of our other product candidates.

Ranpirnase and our other product candidates are novel compounds and their potential benefit as antiviral drugs or immunotherapies is unproven. Ranpirnase and our other product candidates may not prove to be effective against the indications for which they are being designed to act and may not demonstrate in clinical trials any or all of the pharmacological effects that have been observed in preclinical studies. As a result, our clinical trial results may not be indicative of the results of future clinical trials.

Ranpirnase and our other product candidates may interact with human biological systems in unforeseen, ineffective or harmful ways. If Ranpirnase or any of our other product candidates is associated with undesirable side effects or have characteristics that are unexpected, we may need to abandon the development of such product candidate or limit development to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Because of these and other risks described herein that are inherent in the development of novel therapeutic agents, we may never successfully develop or commercialize Ranpirnase or any of our other product candidates, in which case our business will be harmed.

We will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.

As of ~~November 30, 2017,~~December 31, 2023, we, ~~had 103 full-time~~including Octomera, employed 146 employees. ~~Of these employees, approximately 92 were employed by our subsidiary, MaSTherCell.~~ As our development and commercialization plans and strategies develop, we must add a significant number of additional managerial, operational, sales, marketing, financial, and other personnel. Future growth will impose significant added responsibilities on members of management, including:

In addition, as previously disclosed, our agreements with each of CureCell Co., Ltd. and Atvio Biotech Ltd., our Korea and Israel-based CDMO partners, provide that we can obtain 50% equity ownership in these entities by converting advances made to them into 50% of their outstanding equity capital and also that we can compel the underlying equity holders to transfer their equity holding to us for consideration consisting of our equity shares, thereby allowing us to consolidate these entities into our corporate structure. This lack of long-term experience working together may adversely impact our senior management team’s ability to effectively manage our business and growth.

Our future financial performance and our ability to commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities. This lack of long-term experience working together may adversely impact our senior management team’s ability to effectively manage our business and growth.

We currently rely, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors and consultants to provide certain services. There can be no assurance that the services of these independent organizations, advisors and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed, or terminated, and we may not be able to obtain regulatory approval of our product candidates or otherwise advance our business. There can be no assurance that we will be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, if at all. If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, development, and commercialization goals.

We ~~depend on key personnel who would be difficult~~require additional capital to ~~replace, and our business plans will likely be harmed if we lose their services or cannot hire additional qualified personnel.~~

Our success depends substantially on the efforts and abilities of our senior management and certain key personnel. The competition for qualified management and key personnel, especially engineers, is intense. The loss of services of one or more of our key employees, or the inability to hire, train, and retain key personnel, especially engineers and technical support ~~personnel, could delay the development and sale of our products, disrupt~~ our business, and ~~interfere with~~this capital may not be available on acceptable terms or at all.

We intend to continue to make investments to support our business growth and require additional funds to respond to business challenges and to grow our POCare cell therapy business and to further the development of ATMPs. Accordingly, we will need to engage in equity or debt financings to secure additional funds.

Capital and credit market conditions, adverse events affecting our business or industry, the tightening of lending standards, rising interest rates, negative actions by regulatory authorities or rating agencies, or other factors also could negatively impact our ability to ~~execute~~obtain future financing on terms acceptable to us or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to support our business ~~plan.~~growth and respond to business challenges could be significantly limited. In addition, the terms of any additional equity or debt issuances may adversely affect the value and price of our common stock, our results of operations, financial condition and cash flows.

If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any financing secured by us in the future could include restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

We conduct certain of our operations in Israel. Conditions in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and Israel’s war against them, may affect certain of our operations.

Because we conduct certain operations in the State of Israel, some of our business and operations may be affected by economic, political, geopolitical and military conditions in Israel. In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. Moreover, the clash between Israel and Hezbollah in Lebanon, may escalate in the future into a greater regional conflict.

Any hostilities involving Israel, or the interruption or curtailment of trade within Israel or between Israel and its trading partners could adversely affect certain of our operations and results of operations and could make it more difficult for us to raise capital. The conflict in Israel could also result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements. There have been travel advisories imposed relating to travel to Israel, and restriction on travel, or delays and disruptions as related to imports and exports may be imposed in the future. Additionally, certain members of our management and employees are located and reside in Israel. Shelter-in-place and work-from-home measures, government-imposed restrictions on movement and travel and other precautions taken to address the ongoing conflict may temporarily disrupt our management and employees’ ability to effectively perform their daily tasks.

The Israel Defense Force (the “IDF”), the national military of Israel, is a conscripted military service, subject to certain exceptions. Several of our employees are subject to military service in the IDF and have been, or may be, called to serve. It is possible that there will be further military reserve duty call-ups in the future, which may affect our business due to a shortage of skilled labor and loss of institutional knowledge, and necessary mitigation measures we may take to respond to a decrease in labor availability, such as overtime and third-party outsourcing, for example, may have unintended negative effects and adversely impact our results of operations, liquidity or cash flows.

It is currently not possible to predict the duration or severity of the ongoing conflict or its effects on our business, operations and financial conditions. The ongoing conflict is rapidly evolving and developing, and could disrupt certain of our business and operations, among others.

The ~~provision of services by our subsidiary, MaSTherCell, are usually transacted in U.S. dollars and European currencies. Our~~ results of our operations are affected by fluctuations in currency exchange rates in both sourcing and selling locations. ~~Although we enter into foreign currency exchange forward contracts from time to time to reduce our risk related to currency exchange fluctuation, our~~Our results of operations may still be impacted by foreign currency exchange rates, primarily, the euro-to-U.S. dollar exchange rate. In recent years, the euro-to-U.S. dollar exchange rate has been subject to substantial volatility which may continue, particularly in light of recent political events regarding the European Union, or EU. Because we do not hedge against all of our foreign currency exposure, our business will continue to be susceptible to foreign currency fluctuations.

Any proposed internal corporate reorganization we may consider and decide to implement at a future date could be subject to various risks and uncertainties and may involve significant time and attention, all of which could disrupt or adversely affect our business.

Orgenesis is engaged in two separate businesses, the CDMO business and our trans-differentiation technologies to treat diabetes, or what we call as out CT business. The CDMO business is spearheaded by our Belgian-based subsidiary, MaSTherCell, as well as various CDMO joint ventures that we currently have in Korea and Israel. The CT business is carried out at the Israeli Subsidiary level, as well as through Orgenesis SPRL, our Belgian Subsidiary, and Orgenesis Maryland Inc., a Maryland corporation. We may at some point in the future consider and possibly implement a corporate reorganization or restructure of these two separate businesses segments, including without limitation, third party asset transfer, merger or divestiture, spin-off or split-out. While we currently have no definitive plan for any such action, we may, consider any such initiative if our Board of Directors deems it to be in the best interests of our company. Any such initiative, however, will require significant time and attention from management, which may distract management from the operation of our business and the execution of our other initiatives. Additionally, any such initiative may result in unforeseen and adverse tax consequences to us or may result in significant changes to our shareholder base if we are no longer engaged in either one of these business segments. Any such difficulties or developments could potentially have a material adverse effect on our financial condition, results of operations or cash flow.

We have entered into collaborations and joint ventures and may form or seek collaborations or strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements.

We have entered into collaborations and joint ventures and may form or seek strategic alliances, create joint ventures or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to our product candidates and any future product candidates that we may develop. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business. In addition, we face significant competition in seeking appropriate strategic partners for which the negotiation process is time-consuming and complex. Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy. Further, collaborations involving our product candidates, such as our collaborations with third-party research institutions, are subject to numerous risks, which may include the following:

As a result, if we enter into collaboration agreements and strategic partnerships or license our products or businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture, which could delay our timelines or otherwise adversely affect our business. The success of our existing and future collaboration arrangements and strategic partnerships, which include research and development services by our collaborators to improve our intellectual property, will depend heavily on the efforts and activities of our collaborators and may not be successful. We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction. Any delays in entering into new collaborations or strategic partnership agreements related to our product candidates could delay the development and commercialization of our product candidates in certain geographies for certain indications, which would harm our business prospects, financial condition, and results of operations.

Our success will depend on strategic collaborations with third parties to develop and commercialize therapeutic product candidates, and we may not have control over a number of key elements relating to the development and commercialization of any such product candidate.

A key aspect of our strategy is to seek collaborations with partners, such as a large pharmaceutical organization, that are willing to further develop and commercialize a selected product candidate. To date, we have entered into a number of collaborative arrangements with cell therapy organizations. By entering into any such strategic collaborations, we may rely on our partner for financial resources and for development, regulatory and commercialization expertise. Our partner may fail to develop or effectively commercialize our product candidate because they:

We may not be able to enter into additional collaborations on acceptable terms, if at all. We face competition in our search for partners from other organizations worldwide, many of whom are larger and are able to offer more attractive deals in terms of financial commitments, contribution of human resources, or development, manufacturing, regulatory or commercial expertise and support. If we are not successful in attracting a partner and entering into a collaboration on acceptable terms, we may not be able to complete development of or commercialize any product candidate. In such event, our ability to generate revenues and achieve or sustain profitability would be significantly hindered and we may not be able to continue operations as proposed, requiring us to modify our business plan, curtail various aspects of our operations or cease operations.

Our business has been affected by the COVID-19 pandemic and may be significantly adversely affected by a resurgence of the COVID-19 pandemic or if other events out of our control disrupt our business or that of our third-party partners.

A continued and prolonged public health crisis such as the COVID-19 pandemic could have a material negative impact on our business, financial condition and operating results. We have experienced and may in the future experience disruptions from a resurgence of COVID-19 to our business in a number of ways, including:

In addition, we currently rely on third parties to, among other things, manufacture raw materials, manufacture our product candidates for our clinical trials, ship investigation drugs and clinical trial samples, perform quality testing and supply other goods and services to run our business. If any such third party in our supply chain for materials is adversely impacted by effects from a resurgence of the COVID-19 pandemic, including staffing shortages, production slowdowns and disruptions in delivery systems, our supply chain may be disrupted and our costs could be increased, limiting our ability to manufacture our product candidates for our clinical trials and planned future clinical trials and conduct our research and development operations as planned.

In addition, our business could be significantly adversely affected by other business disruptions to us or our third-party partners or collaborators that could seriously harm our potential future revenue and financial condition and increase our costs and expenses. Our operations, and those of our partners and collaborators, contract manufacturing organizations (CMOs) and other contractors, consultants, and third parties could be subject to other global pandemics, earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. We rely on third-party manufacturers to produce and process our product candidates. Our ability to obtain clinical supplies of our product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption.

Our success depends on our ability to protect our intellectual property and our proprietary technologies.

Our commercial success depends in part on our ability to obtain and maintain patent protection and trade secret protection for our product candidates, proprietary technologies, and their uses as well as our ability to operate without infringing upon the proprietary rights of others. We can provide no assurance that our patent applications or those of our licensors will result in additional patents being issued or that issued patents will afford sufficient protection against competitors with similar technologies, nor can there be any assurance that the patents issued will not be infringed, designed around or invalidated by third parties. Even issued patents may later be found unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. The degree of future protection for our proprietary rights is uncertain. Only limited protection may be available and may not adequately protect our rights or permit us to gain or keep any competitive advantage. Composition-of-matter patents on the biological or chemical active pharmaceutical ingredients are generally considered to offer the strongest protection of intellectual property and provide the broadest scope of patent protection for pharmaceutical products, as such patents provide protection without regard to any method of use or any method of manufacturing. While we have an issued ~~patent~~patents in the United States, ~~with a claim for a composition directed to a vector comprising a promoter linked to a pancreatic and duodenal homeobox 1 (PDX-1) polypeptide, and a carrier,~~ we cannot be certain that the ~~claim~~claims in our issued patent will not be found invalid or unenforceable if challenged.

We cannot be certain that the claims in our issued United States methods of use patents will not be found invalid or unenforceable if challenged.

We cannot be certain that the pending applications covering ~~composition-of-matter of our transdifferentiated~~among others the bioconjugates comprising sulfated polysaccharides; Ranpirnase and other ribonucleases for treating viral diseases; therapeutic compositions comprising exosomes, bioxomes, and redoxomes; bioreactors for cell ~~populations~~culture, automated devices for supporting cell therapies, and point-of-care systems; immune cells, ribonucleases, or antibodies for treating COVID-19; or chimeric antigen receptors (CARs); will be considered patentable by the United States Patent and Trademark Office (USPTO), and courts in the United States or by the patent offices and courts in foreign countries, nor can we be certain that the claims in our issued patents will not be found invalid or unenforceable if challenged. Even if our patent applications covering ~~populations of transdifferentiated cells~~these inventions issue as patents, the patents protect a specific ~~transdifferentiated cell product~~products and may not be enforced against competitors making and marketing a product that has the same activity. Method-of-use patents protect the use of a product for the specified method or for treatment of a particular indication. ~~This type~~These types of patents may not be enforced against competitors making and marketing a product that ~~has cells that may provide~~provides the same activity but is used for a method not included in the patent. Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products “off-label.” Although off-label prescriptions may infringe or contribute to the infringement of method-of-use patents, the practice is common and such infringement is difficult to prevent or prosecute.

We have exclusive rights to four (4) United States (US) patents, one of which is directed to a composition comprising a vector comprising a promoter linked to PDX-1 and having a term of 2021, and the other three have a term of 2023 and are directed to methods of inducing endogenous PDX-1 expression in a human differentiated primary non-pancreatic cell, inducing or enhancing a pancreatic islet cell phenotype in non-pancreatic cells, and increasing PDX-1 induction in non-pancreatic primary cells. Further, we have exclusive rights to four (4) foreign issued patents (1 in Europe (validated in Germany, France, Italy, and Great Britain) with a term of 2020; two (2) in Australia with a term of 2020 and 2024; and one (1) in Canada with a term of 2020. We also have five (5) pending applications in the United States, which if granted would have a term of 2034-2035; and twenty three (23) pending applications in foreign jurisdictions: Europe, Australia, Brazil, Canada, China, Columbia, Eurasia, Israel, Japan, South Korea, Mexico, and Singapore which if they were to grant would have a term of 2034-2035, which are directed to the trans-differentiation of cells (including hepatic cells) to cells having pancreatic β-cell phenotype and function, and their use in the treatment of degenerative pancreatic disorders including diabetes, pancreatic cancer, and pancreatitis.

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our future development partners will be successful in protecting our product candidates by obtaining and defending patents. These risks and uncertainties include the following:

In addition, we rely on the protection of our trade secrets and proprietary know-how. Although we have taken steps to protect our trade secrets and unpatented know-how, including entering into confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants and advisors, we cannot provide any assurances that all such agreements have been duly executed, and third parties may still obtain this information or may come upon this or similar information independently. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating its trade secrets. If any of these events occurs or if we otherwise lose protection for our trade secrets or proprietary know-how, our business may be harmed.

Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.

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, misappropriating or otherwise violating the intellectual property and proprietary rights of third parties. There is considerable patent and other intellectual property litigation in the pharmaceutical and biotechnology industries. We may become party to, or threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our technology and product candidates, including interference proceedings, post grant review, inter partes review, and derivation proceedings before the USPTO and similar proceedings in foreign jurisdictions such as oppositions before the European Patent Office.

The legal threshold for initiating litigation or contested proceedings is low, so that even lawsuits or proceedings with a low probability of success might be initiated and require significant resources to defend. Litigation and contested proceedings can also be expensive and time-consuming, and our adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we can. The risks of being involved in such litigation and proceedings may increase if and as our product candidates near commercialization. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future, regardless of merit. We may not be aware of all such intellectual property rights potentially relating to our technology and product candidates and their uses, or we may incorrectly conclude that third party intellectual property is invalid or that our activities and product candidates do not infringe such intellectual property. Thus, we do not know with certainty that our technology and product candidates, or our development and commercialization thereof, do not and will not infringe, misappropriate or otherwise violate any third party’s intellectual property.

Third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to materials, formulations or methods, such as methods of manufacture or methods for treatment, related to the discovery, use or manufacture of the product candidates that we may identify or related to our technologies. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that the product candidates that we may identify may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. Moreover, as noted above, there may be existing patents that we are not aware of or that we have incorrectly concluded are invalid or not infringed by our activities. If any third-party patents were held by a court of competent jurisdiction to cover, for example, the manufacturing process of the product candidates that we may identify, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire.

Generally, conducting clinical trials and other development activities in the United States is not considered an act of infringement. If and when products are approved by the FDA, that certain third party may then seek to enforce its patents by filing a patent infringement lawsuit against us or our licensee(s). In such lawsuit, we or our licensees may incur substantial expenses defending our rights or our licensees’ rights to commercialize such product candidates, and in connection with such lawsuit and under certain circumstances, it is possible that we or our licensees could be required to cease or delay the commercialization of a product candidate and/or be required to pay monetary damages or other amounts, including royalties on the sales of such products. Moreover, any such lawsuit may also consume substantial time and resources of our management team and board of directors. The threat or consequences of such a lawsuit may also result in royalty and other monetary obligations being imposed on us, which may adversely affect our results of operations and financial condition.

Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize the product candidates that we may identify. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.

We may choose to take a license or, if we are found to infringe, misappropriate or otherwise violate a third party’s intellectual property rights, we could also be required to obtain a license from such third party to continue developing, manufacturing and marketing our technology and product candidates. 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 and other third parties access to the same technologies licensed to us and could require us to make substantial licensing and royalty payments. We could be forced, including by court order, to cease developing, manufacturing and commercializing the infringing technology or product. In addition, we could be found liable for significant monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent or other intellectual property right and could be forced to indemnify our customers or collaborators. 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. In addition, we may be forced to redesign our product candidates, seek new regulatory approvals and indemnify third parties pursuant to contractual agreements. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar material adverse effect on our business, financial condition, results of operations and prospects.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if our product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even a successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

Because most of our products have not reached ~~clinical or~~ commercial stage, we do not currently need to carry clinical trial or extensive product liability insurance. In the future, our inability to obtain additional sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop, alone or with collaborators. Such insurance policies may also have various exclusions, and we may be subject to a product liability claim for which we have no coverage.

It may be difficult to enforce a U.S. judgment against us, our officers and directors and the foreign persons named in this Annual Report on Form 10-K in the United States or in foreign countries, , or to assert U.S. securities laws claims in foreign countries or serve process on our officers and directors and these experts.

While we are incorporated in the State of Nevada, currently a majority of our directors and executive officers are not residents of the United States, and the foreign persons named in this Annual Report on Form 10-K are located ~~in Israel and Belgium.~~outside of the United States. The majority of our assets are located outside the United States. Therefore, it may be difficult for an investor, or any other person or entity, to enforce a U.S. court judgment based upon the civil liability provisions of the U.S. federal securities laws against us or any of these persons in a U.S. or foreign court, or to effect service of process upon these persons in the United States. Additionally, it may be difficult for an investor, or any other person or entity, to assert U.S. securities law claims in original actions instituted in foreign countries in which we operate. Foreign courts may refuse to hear a claim based on a violation of U.S. securities laws on the grounds that foreign countries are not necessary the most appropriate forum in which to bring such a claim. Even if a foreign court agrees to hear a claim, it may determine that foreign law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by foreign countries law. There is little binding case law in foreign countries addressing the matters described above.

We may be subject to ~~Our CDMO Business~~numerous and varying privacy and security laws, and our failure to comply could result in penalties and reputational damage.

We are subject to laws and regulations covering data privacy and the protection of personal information, including health information. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there ishas been an increasing ~~number~~focus on privacy and data protection issues which may affect our business. In the U.S., numerous federal and state laws and regulations, including state security breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of ~~product candidates~~personal information. Each of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues for us. If we fail to comply with applicable laws and regulations, we could be subject to penalties or sanctions, including criminal penalties if we knowingly obtain or disclose individually identifiable health information from a covered entity in ~~clinical trials with~~ a ~~smaller number~~manner that is not authorized or permitted by the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, or HIPAA.

Numerous other countries have, ~~reached commercial production, cell therapy is~~or are developing, laws governing the collection, use and transmission of personal information as well. The EU and other jurisdictions have adopted data protection laws and regulations, which impose significant compliance obligations. In the EU, for example, effective May 25, 2018, the GDPR replaced the prior EU Data Protection Directive (95/46) that governed the processing of personal data in the European Union. The GDPR imposes significant obligations on controllers and processors of personal data, including, as compared to the prior directive, higher standards for obtaining consent from individuals to process their personal data, more robust notification requirements to individuals about the processing of their personal data, a ~~developing industry~~strengthened individual data rights regime, mandatory data breach notifications, limitations on the retention of personal data and ~~a significant global market for manufacturing services may never emerge.~~

~~Cell therapy is in its early stages~~increased requirements pertaining to health data, and ~~is still a developing area~~strict rules and restrictions on the transfer of ~~research, with few cell therapy products approved for clinical use. Many~~personal data outside of the ~~existing cellular therapy candidates are based~~EU, including to the U.S. The GDPR also imposes additional obligations on, ~~novel cell technologies~~and required contractual provisions to be included in, contracts between companies subject to the GDPR and their third-party processors that ~~are inherently risky~~relate to the processing of personal data. The GDPR allows EU member states to make additional laws and regulations further limiting the processing of genetic, biometric or health data.

Adoption of the GDPR increased our responsibility and liability in relation to personal data that we process and may ~~not be understood~~ require us to put in place additional mechanisms to ensure compliance. Any failure to comply with the requirements of GDPR and applicable national data protection laws of EU member states, could lead to regulatory enforcement actions and significant administrative and/or ~~accepted by the marketplace, making it difficult for their own funding~~financial penalties against us (fines of up to ~~enable them~~Euro 20,000,000 or up to continue their business. In addition to providing in-house process development and manufacturing expertise for our own product candidates in development, MaSTherCell provides development and manufacturing of cell and tissue-based therapeutic products in clinical and pre-clinical trials. The number of people who may use cell or tissue-based therapies, and the demand for cell processing services, is difficult to forecast. If cell therapies under development by us or by others to treat disease are not proven safe and effective, demonstrate unacceptable risks or side effects or, where required, fail to receive regulatory approval, our manufacturing business will be significantly impaired. While the therapeutic application of cells to treat serious diseases is currently being explored by a number of companies, to date there are only a handful of approved cell therapy products in the U.S. Ultimately, our success in deriving revenue from manufacturing depends on the development and growth of a broad and profitable global market for cell-, gene- and tissue-based therapies and services and our ability to capture a share of this market through our global CDMO network.

~~MaSTherCell's revenues may vary dramatically change from period to period making it difficult to forecast future results.~~

MaSTherCell recorded revenues of approximately $10 million for the year ended November 30, 2017, representing an increase of 58% over the same period last year. The nature and duration of MaSTherCell's and our joint venture CDMO partners’ contracts with customers often involve regular renegotiation of the scope, level and price of the services we are providing. If our customers reduce the level of their spending on research and development or are unsuccessful in attaining or retaining product sales due to market conditions, reimbursement issues or other factors, our results of operations may be materially impacted. In addition, other factors, including the rate of enrollment for clinical studies, will directly impact the level and timing of the products and services we deliver. As such, the levels of our revenues and profitability can fluctuate significantly from one period to another and it can be difficult to forecast the level of future revenues with any certainty. Furthermore, a dramatic change in our future revenue may result an impairment of our goodwill.

~~The loss of one or more of MaSTherCell’s major clients or a decline in demand from one or more of these clients could harm MaSTherCell’s business.~~

~~MaSTherCell has a limited number of major clients that together account for a large percentage~~4% of the total ~~revenues earned. Over~~worldwide annual turnover of the ~~past~~preceding financial year, ~~MaSTherCell has increased its client portfolio~~whichever is higher), and ~~diversified source~~could adversely affect our business, financial condition, cash flows and results of ~~revenues, but~~operations.

We are increasingly dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity and data storage risks.

Significant disruptions to our information technology systems or breaches of information security could adversely affect our business. In the ordinary course of business, we collect, store and transmit confidential information, and it is critical that we do so in a secure manner in order to maintain the confidentiality and integrity of such confidential information. Our information technology systems are potentially vulnerable to service interruptions and security breaches from inadvertent or intentional actions by our employees, partners, vendors, or from attacks by malicious third parties. Maintaining the secrecy of this confidential, proprietary, and/or trade secret information is important to our competitive business position. While we have taken steps to protect such information and invested in information technology, there can be no assurance that ~~such clients~~our efforts will ~~continue to use MaSTherCell’s services at~~prevent service interruptions or security breaches in our systems or the ~~same level~~unauthorized or ~~at all. A reduction~~inadvertent wrongful access or ~~delay~~disclosure of confidential information that could adversely affect our business operations or result in the loss, dissemination, or misuse of critical or sensitive information. A breach of our security measures or the accidental loss, inadvertent disclosure, unapproved dissemination or misappropriation or misuse of trade secrets, proprietary information, or other confidential information, whether as a result of theft, hacking, or other forms of deception, or for any other cause, could enable others to produce competing products, use our proprietary technology and/or adversely affect our business position. Further, any such interruption, security breach, loss or disclosure of ~~MaSTherCell’s services, including reductions or delays due~~confidential information could result in financial, legal, business, and reputational harm to ~~market, economic or competitive conditions,~~us and could have a material ~~adverse~~ effect on ~~MaSTherCell’s business, operating results and financial condition.~~

~~MaSTherCell’s business is subject to risks associated with a single manufacturing facility.~~

MaSTherCell’s contract manufacturing services are dependent upon a single fully operational facility located in Gosselies (Belgium). A catastrophic loss of the use of all or a portion of MaSTherCell’s manufacturing facility due to accident, fire, explosion, labor issues, weather conditions, other natural disaster or otherwise, whether short or long-term, could have a material adverse effect on MaSTherCell’s customer relationships and financial results. While its global network partners offer alternative manufacturing sites as part of a disaster recovery plan, this may require it to invest significant time and effort in tech transfer.

~~If MaSTherCell loses electrical power at its manufacturing facility, its business operations may be adversely affected.~~

If MaSTherCell loses electrical power at its manufacturing facility for more than a few hours, MaSTherCell would be unable to continue its manufacturing operations for an extended period of time. Additionally, MaSTherCell does not have an alternative manufacturing location located nearby. While MaSTherCell implemented remediation measures to address this risk by setting up a back-up generator allowing it to provide for its manufacturing power consumption needs for a few hours and by being granted a priority access to power in case of global power outage, in the industrial park in Belgium where its premises are located, these measures may not prevent a significant disruption in MaSTherCell’s manufacturing operations which could materially and adversely affect its business operations during an extended period of power outage.

The logistics associated with the distribution of materials produced by MaSTherCell for third parties and for us are significant, complex and expensive and may negatively impact our ability to generate and meet future demand for our products and improve profitability.

Current cell therapy products and product candidates, have a limited shelf life, in certain instances limited to less than 12 hours. Thus, it is necessary to minimize the amount of time between when the cell product is extracted from a patient, arrives at our facility for processing, and is returned for infusion in the patient. To do so, we need our cell therapy facilities to be located in major population centers in which patients are likely to be located and within close proximity of major airports. In the future, it may be necessary to build new facilities or invest into new technologies enabling final formulation at point of care, which would require a significant commitment of capital and may not then be available to us. Even if we are able to establish such new facilities or technologies, we may experience challenges in ensuring that they are compliant with cGMP standards, EMEA requirements, and/or applicable state or local regulations. We cannot be certain that we would be able to recoup the costs of establishing a facility in a given market. Given these risks, we could choose not to expand our cell processing and manufacturing services into new geographic markets which will limit our future growth prospects.

~~Product liability and uninsured risks may adversely affect MaSTherCell’s continuing operations and damage its reputation.~~

MaSTherCell operates in an industry susceptible to significant product liability claims. MaSTherCell may be liable if it manufactures any product that causes injury, illness, or death for intentional or gross fault on its part. In addition, product liability claims may be brought against MaSTherCell’s clients, in which case MaSTherCell’s clients or others may seek contribution from MaSTherCell if they incur any loss or expenses related to such claims. These claims may be brought by individuals seeking relief or by groups seeking to represent a class. While MaSTherCell’s liability may be limited to instances where it was grossly negligent, nonetheless, the defense of such claims may be costly and time-consuming, and could divert the attention of MaSTherCell’s management and technical personnel.

~~A breakdown or breach of MaSTherCell’s information technology systems could subject MaSTherCell to liability.~~

MaSTherCell relies upon its information technology systems and infrastructure for its business. The size and complexity of MaSTherCell’s computer systems make it potentially vulnerable to breakdown and unauthorized intrusion. MaSTherCell could also experience a business interruption, theft of confidential information, or reputational damage from industrial espionage attacks, malware or other cyber-attacks, which may compromise MaSTherCell’s system infrastructure or lead to data leakage, either internally or at MaSTherCell’s third-party providers.

Similarly, data privacy breaches by those who access MaSTherCell’s systems may pose a risk that sensitive data, including intellectual property, trade secrets or personal information belonging to MaSTherCell or its employees, clients or other business partners, may be exposed to unauthorized persons or to the public. Even if MaSTherCell runs regular IT security audits by third-parties, there can be no assurance that MaSTherCell’s efforts to protect its data and information technology systems will prevent breakdowns or breaches in MaSTherCell’s systems that could adversely affect its business and result in financial and reputational harm to MaSTherCell.

We face competition from other third party contact manufacturers, as well as more general competition from companies and academic and research institutions that may choose to self-manufacture rather than utilize a contract manufacturer.

We face competition from companies that are large, well-established manufacturers with financial, technical, research and development and sales and marketing resources that are significantly greater than those that we currently possess. In addition, certain of our leading competitors, such as Lonza Group, WuXi AppTec and PCT have international capabilities that we do not currently possess though we are pursuing.

More generally, we face competition inherent in any third-party manufacturer’s business - namely, that potential customers may instead elect to invest in their own facilities and infrastructure, affording them greater control over their products and the hope of long-term cost savings compared to a third party contract manufacturer. To be successful, we will need to convince potential customers that our current and expanding capabilities are more innovative, of higher-quality and more cost-effective than could be achieved through internal manufacturing and that our experience and quality manufacturing and process development expertise are unique in the industry. Our ability to achieve this and to successfully compete against other manufacturers will depend, in large part, on our success in developing technologies that improve both the quality and profitability associated with cell therapy manufacturing. If we are unable to successfully compete against other manufacturers, we may not be able to develop our CDMO business plans which may harm our business, financial ~~condition and~~position, results of ~~operations.~~

Extensive industry regulation has had, and will continue to have, a significant impact on our CDMO business, and it may require us to substantially invest in our development, manufacturing and distribution capabilities and may negatively impact our ability to generate and meet future demand for our products and improve profitability.

Although we seek to conduct our business in compliance with applicable governmental healthcare laws and regulations, these laws and regulations are exceedingly complex and often subject to varying interpretations. The cell therapy industry is the topic of significant government interest, and thus the laws and regulations applicable to our business are subject to frequent changeoperations and/or ~~reinterpretation. As such, there~~cash flow.

There can be no assurance that we will be able to develop in-house sales and commercial distribution capabilities or ~~will have~~establish or maintain relationships with third-party collaborators to successfully commercialize any product in the ~~resources, to maintain compliance with all such healthcare laws~~United States or overseas, and ~~regulations. Failure to comply with such healthcare laws and regulations could~~as a result, in significant enforcement actions, civil or criminal penalties, which along with the costs associated with such compliance or with enforcement of such healthcare laws and regulations, may have a material adverse effect on our operations or may require restructuring of our operations or impair our ability to operate profitably.

Joint-venture partnerships integration into our global CDMO network would be subject to various risks and uncertainties and may involve significant time and attention, all of which could disrupt or adversely affect our business and harm our reputation

We need our cell therapy facilities to be located in major population centers in which patients are likely to be located and within close proximity of major airports. To do so, we intend to build up a global CDMO network partnership offering alternative manufacturing sites for our third-party clients currently operating out of Belgium, Korea and Israel. The failure to provide harmonized manufacturing quality standards between the current and any future sites to our clients and compliance with local regulatory agencies requirements could have a material adverse effect on our reputation, business, operating results and financial condition.

~~We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualified personnel,~~ we may not be able to ~~successfully implement~~generate product revenue.

A variety of risks associated with operating our business ~~strategy~~internationally could materially adversely affect our business. We plan to seek regulatory approval of our product candidates outside of the United States and, accordingly, we expect that we, and any potential collaborators in those jurisdictions, will be subject to additional risks related to operating in foreign countries, including:

These and other risks associated with our planned international operations may materially adversely affect our ability to attain or maintain profitable operations.

If we are unable to integrate acquired businesses effectively, our operating results may be adversely affected.

From time to time, we seek to expand our business through acquisitions. We may not be able to successfully integrate acquired businesses and, where desired, their product portfolios into ours, and therefore we may not be able to realize the intended benefits. If we fail to successfully integrate acquisitions or product portfolios, or if they fail to perform as we anticipate, our existing businesses and our revenue and operating results could be adversely affected. If the due diligence of the operations of acquired businesses performed by us and by third parties on our behalf is inadequate or flawed, or if we later discover unforeseen financial or business liabilities, acquired businesses and their assets may not perform as expected. Additionally, acquisitions could result in difficulties assimilating acquired operations and, where deemed desirable, transitioning overlapping products into a single product line and the diversion of capital and management’s attention away from other business issues and opportunities. The failure to integrate acquired businesses effectively may adversely impact our business, results of operations or financial condition.

We may not be able to operate our OMPULs in all cities or desired locations and the sizes and use of our laboratories in such OMPULs may be restricted due to zoning, environmental, medical waste, or other licensing regulations.

We may be subject to local zoning ordinances or other similar restrictions that may limit where the OMPULs can be located and the extent of their size and use. In addition, international, federal, state and local environmental and other administrative and licensing regulations could restrict the ability of the OMPULs to connect with local power, water, sewer, and other infrastructure. Our success depends on our ability to develop and roll out our OMPULs which may become more difficult or more expensive by such applicable regulations. Changes in any of these regulations could require us to close or move our OMPULs which would affect our ability to conduct and grow our business.

If our existing OMPULs facilities become damaged or inoperable or if we are required to vacate our existing facilities, our ability to perform our tests and pursue our research and development efforts may be jeopardized.

We currently perform a majority of tests relating to our POCare Services out of our OMPULs. Our facilities and equipment could be harmed or rendered inoperable by natural or man-made disasters, including war, fire, earthquake, power loss, communications failure or terrorism, which may render it difficult or impossible for us to operate for some period of time. In addition, since there is no lengthy history of use of OMPULs and the OMPULs are still in the development stage, we are unable to predict the normal wear and tear on such OMPULs or how many years each OMPUL will remain operational.

The inability to perform our tests or to reduce the backlog that could develop if our facilities are inoperable, for even a short period of time, may result in the loss of customers or harm to our reputation, and we may be unable to regain those customers or repair our reputation. Furthermore, our OMPUL facilities and the equipment we use to perform our research and development work could be unavailable or costly and time-consuming to repair or replace. It would be difficult, time-consuming and expensive to rebuild our facilities, or to locate and qualify new facilities.

We carry insurance for damage to our property and disruption of our business, but this insurance may not cover all of the risks associated with damage or disruption to our facility and business, may not provide coverage in amounts sufficient to cover our potential losses and may not continue to be available to us on acceptable terms, if at all.

Changes in the price and availability of our raw materials could be detrimental to our OMPUL operations.

Supply chain issues, including limited supply of certain raw material or supply interruptions, delays or shortages of material may disrupt our daily operations as the OMPULs may be unable to retain an inventory of materials required to maintain operations or to build or repair OMPULs.

Our ability to ~~compete~~innovate and execute is dependent on the ability to hire, replace, and train skilled personnel. The employment market suffers from shortage of candidates that may continue in future years and cause delays and inabilities to execute our plans. Additionally, based on current trends in the US labor market, there could be a shortage of available trained staff for the OMPULs in the United States. Staff retention could also be a significant operational issue.

If we are unable to successfully secure our locations and premises, we may be unable to operate out of our OMPULs or keep our employees and laboratory equipment safe.

In certain cities and urban markets, homelessness, rising crime rates and decreased police funding, could impact the security of the OMPULs and the safety of employees and patients. If we are unable to successfully secure our OMPULs, our research and development could be negatively impacted.

Our OMPULs are operated in a heavily regulated industry, and changes in regulations or violations of regulations may, directly or indirectly, reduce our revenue, adversely affect our results of operations and financial condition, and harm our business.

The clinical laboratory testing industry is highly ~~competitive biotechnology~~regulated, and ~~pharmaceutical industries depends upon~~there can be no assurance that the regulatory environment in which we operate will not change significantly and adversely to us in the future. Areas of the regulatory environment that may affect our ability to ~~attract, motivate and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on~~conduct our management and on our trained staff turnover. If the staff turnover increases, it could result in additional hiring and training expenses, potentially delays in product development and manufacturing and harm ourOMPUL business ~~and our growth. Competition for skilled personnel is intense and the turnover rate can be high, which may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all.~~include, without limitation:

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided stock option grants that vest over time. The value to employees of these equity grants that vest over time may be significantly affected by movements in our stock price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies. Although we have employment agreements with our key employees, some of these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice. We do not maintain “key man” insurance policies on the lives of all of these individuals or the lives of any of our other employees.

Risks Related to Our Trans-Differentiation Technologies for Diabetes and the THM License Agreement

Pursuant to the terms of the THM License Agreement with THM, Orgenesis Ltd, the Israeli Subsidiary, must develop, manufacture, sell and market the products pursuant to the milestones and time schedule specified in the development plan. In the event the Israeli Subsidiary fails to fulfill the terms of the development plan under the THM License Agreement, THM shall be entitled to terminate the THM License Agreement by providing the Israeli Subsidiary with written notice of such a breach and if the Israeli Subsidiary does not cure such breach within one year of receiving the notice. ~~If THM cancels the License Agreement, our CT business may be materially adversely affected.~~ THM may also terminate the THM License Agreement if the Israeli Subsidiary breaches an obligation contained in the THM License Agreement and does not cure it within 180 days of receiving notice of the breach. ~~Any termination~~We also run the risk that THM may attempt cancel or, at the very least challenge, the License Agreement with the Israeli Subsidiary as we continue to expand our focus to other therapies and business activities. While we have not received any notice of cancellation of the THM License Agreement, ~~is likely~~we have received an allegation regarding the scope of the rights by THM that may present future challenges for our Israeli Subsidiary to ~~materially adversely affect our business and prospects.~~

~~Our success will depend on strategic collaborations with third parties~~continue to develop, manufacture, sell and ~~commercialize~~market the products pursuant to the milestones and time schedule specified in the development plan of the THM License Agreement. In addition, THM has filed a complaint against us in the Tel Aviv District Court relating to the scope of such THM license and the royalties and other payments that THM is entitled to thereunder. See “Legal Proceedings” in this Annual Report on Form 10-K. Such complaint may lead to further risk of cancellation of the THM License Agreement.

The Israeli Subsidiary is a licensed technology that demonstrates the capacity to induce a shift in the developmental fate of cells from the liver and differentiating (converting) them into “pancreatic beta cell-like” insulin-producing cells for patients with diabetes. Our intention is to develop our technology to the clinical stage for regeneration of functional insulin-producing cells, thus enabling normal glucose regulated insulin secretion, via cell therapy. By using therapeutic agents that efficiently convert a sub-population of liver cells into pancreatic islets phenotype and function, this approach allows the diabetic patient to be the donor of his/her own therapeutic tissue and to start producing his/her own insulin in a glucose-responsive manner, thereby eliminating the need for insulin injections. Because this is a new approach to treating diabetes, developing and commercializing our product candidates ~~and we may not have control over~~subjects us to a number of ~~key elements relating to the development and commercialization of any such product candidate.~~challenges, including:

A key aspect of our strategy is to seek collaboration with a partner, such as a large pharmaceutical organization, that is willing to further develop and commercialize a selected product candidate. To date, we have not entered into any such collaborative arrangement. By entering into any such strategic collaboration, we may rely on our partner for financial resources and for development, regulatory and commercialization expertise. Our partner may fail to develop or effectively commercialize our product candidate because they:

Risks Related to ~~enter into a collaboration on acceptable terms, if at all. We face competition in our search for partners from other organizations worldwide, many~~Development and Regulatory Approval of ~~whom are larger~~Our Therapies and ~~are able to offer more attractive deals in terms of financial commitments, contribution of human resources, or development, manufacturing, regulatory or commercial expertise~~Product Candidates

Research and ~~support. If we are not successful in attracting a partner and entering into a collaboration on acceptable terms, we may not be able to complete~~ development of or commercialize any product candidate. In such event, our ability to generate revenues and achieve or sustain profitability would be significantly hindered and we may not be able to continue operations as proposed, requiring us to modify our business plan, curtail various aspects of our operations or cease operations.biopharmaceutical products is inherently risky.

~~Third parties to whom we may license or transfer development and commercialization rights for products covered by intellectual property rights~~

We may not be successful in ~~their~~our efforts to use and asenhance our technology platform to create a ~~result,~~pipeline of product candidates and develop commercially successful products. Furthermore, we may expend our limited resources on programs that do not ~~receive future royalty~~yield a successful product candidate and fail to capitalize on product candidates or ~~other milestone payments relating to those products~~diseases that may be more profitable or ~~rights.~~

for which there is a greater likelihood of success. If we ~~are unable~~fail to ~~successfully acquire,~~ develop ~~or commercialize new products,~~additional product candidates, our operating results will suffer. Our future results of operations will depend to a significant extent upon our ability to successfully develop and commercialize our technology and businesses in a timely manner. There are numerous difficulties in developing and commercializing new technologies and products, including:

As a result of these and other difficulties, products in development by us may or may not receive timely regulatory approvals, or approvals at all, necessary for marketing by us or other third-party partners. If any of our future products are not approved in a timely fashion or, when acquired or developed and approved, cannot be successfully manufactured, commercialized or reimbursed, our operating results could be adversely affected. We cannot guarantee that any investment we make in developing productcommercial opportunity will be ~~recouped, even~~limited. Even if we are successful in continuing to build our pipeline, obtaining regulatory approvals and commercializing ~~these products.~~

~~Our research and development programs are based on novel technologies~~additional product candidates will require substantial additional funding and are ~~inherently risky.~~

~~We are subject~~prone to the risks of failure inherent in medical product development. Investment in biopharmaceutical product development involves significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, and become commercially viable. We cannot provide you any assurance that we will be able to successfully advance any of these additional product candidates through the development of products based on new technologies. The novel nature of our cell therapy technology creates significant challenges with respect to product development and optimization, manufacturing, government regulation and approval, third-party reimbursement and market acceptance. For example, the FDA and EMA have relatively limited experience with the development and regulation of cell therapy products and, therefore, the pathway to marketing approval for our cell therapyprocess. Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development or commercialization for many reasons, including the following:

If any of these events occur, we may ~~accordingly~~ be ~~more complex, lengthy and uncertain than~~forced to abandon our development efforts for a ~~more conventional product candidate. The indications of use for which~~program or programs, or we choose to pursue development may have clinical effectiveness endpoints that have not previously been reviewed or validated by the FDA or EMA, which may complicate or delay our effort to ultimately obtain FDA or EMA approval. Our efforts to overcome these challenges may not prove successful, and any product candidate we seek to develop may not be ~~successfully developed~~able to identify, discover, develop, or ~~commercialized.~~commercialize additional product candidates, which would have a material adverse effect on our business and could potentially cause us to cease operations.

Extensive industry regulation has had, and will continue to have, a significant impact on our business, especially our product development, manufacturing and distribution capabilities.

All pharmaceutical companies are subject to extensive, complex, costly and evolving government regulation. For the U.S., this is principally administered by the FDA and to a lesser extent by the Drug Enforcement Administration (“DEA”) and state government agencies, as well as by varying regulatory agencies in foreign countries where products or product candidates are being manufactured and/or marketed. The Federal Food, Drug and Cosmetic Act, the Controlled Substances Act and other federal statutes and regulations, and similar foreign statutes and regulations, govern or influence the testing, manufacturing, packing, labeling, storing, record keeping, safety, approval, advertising, promotion, sale and distribution of our future products. Under these regulations, we may become subject to periodic inspection of our facilities, procedures and operations and/or the testing of our future products by the FDA, the DEA and other authorities, which conduct periodic inspections to confirm that we are in compliance with all applicable regulations. In addition, the FDA and foreign regulatory agencies conduct pre-approval and post-approval reviews and plant inspections to determine whether our systems and processes are in compliance with current ~~good manufacturing practice (“cGMP”)~~GMP and other regulations. Following such inspections, the FDA or other agency may issue observations, notices, citations and/or warning letters that could cause us to modify certain activities identified during the inspection. FDA guidelines specify that a warning letter is issued only for violations of “regulatory significance” for which the failure to adequately and promptly achieve correction may be expected to result in an enforcement action. We may also be required to report adverse events associated with our future products to FDA and other regulatory authorities. Unexpected or serious health or safety concerns would result in labeling changes, recalls, market withdrawals or other regulatory actions.

The range of possible sanctions includes, among others, FDA issuance of adverse publicity, product recalls or seizures, fines, total or partial suspension of production and/or distribution, suspension of the FDA’s review of product applications, enforcement actions, injunctions, and civil or criminal prosecution. Any such sanctions, if imposed, could have a material adverse effect on our business, operating results, financial condition and cash flows. Under certain circumstances, the FDA also has the authority to revoke previously granted drug approvals. Similar sanctions as detailed above may be available to the FDA under a consent decree, depending upon the actual terms of such decree. If internal compliance programs do not meet regulatory agency standards or if compliance is deemed deficient in any significant way, it could materially harm our business.

The European Medicines Agency (“EMA”) will regulate our future ~~products.~~products in Europe. Regulatory approval by the EMA will be subject to the evaluation of data relating to the quality, efficacy and safety of our future products for its proposed use. The time taken to obtain regulatory approval varies between countries. Different regulators may impose their own requirements and may refuse to grant, or may require additional data before granting, an approval, notwithstanding that regulatory approval may have been granted by other regulators.

Regulatory approval may be delayed, limited or denied for a number of reasons, including insufficient clinical data, the product not meeting safety or efficacy requirements or any relevant manufacturing processes or facilities not meeting applicable requirements.

Further trials and other costly and time-consuming assessments of the product may be required to obtain or maintain regulatory approval. Medicinal products are generally subject to lengthy and rigorous pre-clinical and clinical trials and other extensive, costly and time-consuming procedures mandated by regulatory authorities. We may be required to conduct additional trials beyond those currently planned, which could require significant time and expense. In addition, even after the technology approval, both in the U.S. and Europe, we will be required to maintain post marketing surveillance of potential adverse and risk assessment programs to identify adverse events that did not appear during the clinical studies and drug approval process. All of the foregoing could require an investment of significant time and expense.

We have ~~never~~ generated ~~any~~limited revenue from therapeutic product sales, and our ability to generate any significant revenue from product sales and become profitable depends significantly on our success in a number of factors.

We have noa limited number of therapeutic products approved for commercial sale, and we have ~~not~~ generated ~~any~~only limited revenue from product ~~sales, and do not anticipate generating any revenue from product sales until sometime after we have received regulatory approval for the commercial sale of a product candidate.~~sales. Our ability to generate revenue of more significant scale and achieve profitability depends significantly on our success in many factors, including:

Even if ~~one or~~ more of the product candidates that we develop isare approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate. Our expenses could increase beyond expectations if we are required by the U.S. Food and Drug Administration, or the FDA, or other regulatory agencies, domestic or foreign, to change our manufacturing processes or assays, or to perform clinical, nonclinical, or other types of studies in addition to those that we currently anticipate. If we are successful in obtaining regulatory approvals to market ~~one or~~ more of our product candidates, our revenue will be dependent, in part, upon the size of the markets in the territories for which we gain regulatory approval, the accepted price for the product, the ability to get reimbursement at any price, and whether we own the commercial rights for that territory. If the number of our addressable disease patients is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products, even if approved. If we are not able to generate revenue from the sale of any approved products, we may never become profitable.

We have concentrated our research and development efforts on technology using cell-based therapy, and our future success is highly dependent on the successful development of that technology for diabetes.

We have developed a technology that demonstrates the capacity to induce a shift in the developmental fate of cells from the liver and differentiating (converting) them into “pancreatic beta cell-like” insulin-producing cells for patients with diabetes. Based on licensed know-how and patents, our intention is to develop our technology to the clinical stage for regeneration of functional insulin-producing cells, thus enabling normal glucose regulated insulin secretion, via cell therapy. By using therapeutic agents (i.e., PDX-1, and additional pancreatic transcription factors in an adenovirus-vector) that efficiently convert a sub-population of liver cells into pancreatic islets phenotype and function, this approach allows the diabetic patient to be the donor of his own therapeutic tissue and to start producing his/her own insulin in a glucose-responsive manner, thereby eliminating the need for insulin injections. Because this is a new approach to treating diabetes, developing and commercializing our product candidates subjects us to a number of challenges, including:

When we commence ~~our~~any clinical trials, we may not be able to conduct our trials on the timelines we expect.

Clinical testing is expensive, time consuming, and subject to uncertainty. We cannot guarantee that any clinical studies will be conducted as planned or completed on schedule, if at all. We ~~expect that our early clinical work will help support the filing with the FDA of an IND for our product in 2018. However, we~~ cannot be sure that we will be able to submit an IND, ~~in this time-frame,~~ and we cannot be sure that submission of an IND will result in the FDA allowing clinical trials to begin. Moreover, even if these trials begin, issues may arise that could suspend or terminate such clinical trials. A failure of one or more clinical studies can occur at any stage of testing, and our future clinical studies may not be successful. Events that may prevent successful or timely completion of clinical development include:

Any inability to successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to generate revenue. In addition, if we make manufacturing or formulation changes to our product candidates, we may be required to, or we may elect to conduct additional studies to bridge our modified product candidates to earlier versions. Clinical study delays could also shorten any periods during which our products have patent protection and may allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.

Our clinical trial results may also not support approval, whether accelerated approval, conditional marketing authorizations, or regular approval. The results of preclinical and clinical studies may not be predictive of the results of later-stage clinical trials, and product candidates in later stages of clinical trials may fail to show the desired safety and efficacy despite having progressed through preclinical studies and initial clinical trials. In addition, our product candidates could fail to receive regulatory approval for many reasons, including the following:

Further, failure to obtain approval for any of the above reasons may be made more likely by the fact that the FDA and other regulatory authorities have very limited experience with commercial development of our cell therapy for the treatment of Type 1 Diabetes.

Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences.

As with most biological drug products, use of our product candidates could be associated with side effects or adverse events which can vary in severity from minor reactions to death and in frequency from infrequent to prevalent. Any of these occurrences may materially and adversely harm our business, financial condition and prospects.

~~Research and development of biopharmaceutical products is inherently risky.~~

We may not be successful in our efforts to use and enhance our technology platform to create a pipeline of product candidates and develop commercially successful products, or we may expend our limited resources on programs that do not yield a successful product candidate and fail to capitalize on product candidates or diseases that may be more profitable or for which there is a greater likelihood of success. If we fail to develop additional product candidates, our commercial opportunity will be limited. Even if we are successful in continuing to build our pipeline, obtaining regulatory approvals and commercializing additional product candidates will require substantial additional funding and are prone to the risks of failure inherent in medical product development. Investment in biopharmaceutical product development involves significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, and become commercially viable. We cannot provide you any assurance that we will be able to successfully advance any of these additional product candidates through the development process. Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development or commercialization for many reasons, including the following:

If any of these events occur, we may be forced to abandon our development efforts for a program or programs, or we may not be able to identify, discover, develop, or commercialize additional product candidates, which would have a material adverse effect on our business and could potentially cause us to cease operations.

Our product candidates are biologics, and the manufacture of our product candidates is complex, and we may encounter difficulties in production, particularly with respect to process development or scaling-out of our manufacturing capabilities.

If we encounter such difficulties, our ability to provide supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or stopped, or we may be unable to maintain a commercially viable cost structure. Our product candidates are biologics and the process of manufacturing our products is complex, highly regulated and subject to multiple risks. The manufacture of our product candidates involves complex processes, including the biopsy of tissue from a patient’s liver, propagation of the patient’s liver cells from that liver tissue to obtain the desired dose, trans-differentiating those cells into insulin-producing cells ex vivo and ultimately infusing the cells back into a patient’s body. As a result of the complexities, the cost to manufacture biologics is generally higher than traditional small molecule chemical compounds, and the manufacturing process is less reliable and is more difficult to reproduce.

Our manufacturing process will be susceptible to product loss or failure due to logistical issues associated with the collection of liver cells, or starting material, from the patient, shipping such material to the manufacturing site, shipping the final product back to the patient, and infusing the patient with the product, manufacturing issues associated with the differences in patient starting materials, interruptions in the manufacturing process, contamination, equipment or reagent failure, improper installation or operation of equipment, vendor or operator error, inconsistency in cell growth, failures in process testing and variability in product characteristics. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects, and other supply disruptions. If for any reason we lose a patient’s starting material or later-developed product at any point in the process, the manufacturing process for that patient will need to be restarted and the resulting delay may adversely affect that patient’s outcome. If microbial, viral, or other contaminations are discovered in our product candidates or in the manufacturing facilities in which our product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. Because our product candidates are manufactured for each particular patient, we will be required to maintain a chain of identity and tractability of all reagents and viruses involved in the process with respect to materials as they move from the patient to the manufacturing facility, through the manufacturing process, and back to the patient. Maintaining such a chain of identity is difficult and complex, and failure to do so could result in adverse patient outcomes, loss of product, or regulatory action including withdrawal of our products from the market. Further, as product candidates are developed through preclinical to ~~late stage~~late-stage clinical trials towards approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, are altered along the way in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives, and any of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials.

Although we are working to develop commercially viable processes, doing so is a difficult and uncertain task, and there are risks associated with scaling to the level required for advanced clinical trials or commercialization, including, among others, cost overruns, potential problems with process scale-out, process reproducibility, stability issues, lot consistency, and timely availability of reagents or raw materials. We may ultimately be unable to reduce the cost of goods for our product candidates to levels that will allow for an attractive return on investment if and when those product candidates are commercialized.

We expect that continued development of our manufacturing facility via MaSTherCell and our global CDMO network will provide us with enhanced control of material supply for both clinical trials and the commercial market, enable the more rapid implementation of process changes, and allow for better long-term margins. We may establish multiple manufacturing facilities as we expand our commercial footprint to multiple geographies, which may lead to regulatory delays or prove costly. Even if we are successful, our manufacturing capabilities could be affected by cost-overruns, unexpected delays, equipment failures, labor shortages, natural disasters, power failures and numerous other factors that could prevent us from realizing the intended benefits of our manufacturing strategy and have a material adverse effect on our business.

In addition, the manufacturing process for any products that we may develop is subject to FDA and foreign regulatory authority approval process, and we will need to contract with manufacturers who can meet all applicable FDA and foreign regulatory authority requirements on an ongoing basis. If we are unable to reliably produce products to specifications acceptable to the FDA or other regulatory authorities, we may not obtain or maintain the approvals we need to commercialize such products. Even if we obtain regulatory approval for any of our product candidates, there is no assurance that either we or our ~~CDMO~~ subsidiaries and joint ventures will be able to manufacture the approved product to specifications acceptable to the FDA or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the product, or to meet potential future demand. Any of these challenges could delay completion of clinical trials, require bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidate, impair commercialization efforts, increase our cost of goods, and have an adverse effect on our business, financial condition, results of operations and growth prospects.

The manufacture of biological drug products is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of biologic products often encounter difficulties in production, particularly in scaling up or out, validating the production process, and assuring high reliability of the manufacturing process (including the absence of contamination). These problems include logistics and shipping, difficulties with production costs and yields, quality control, including stability of the product, product testing, operator error, availability of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations. Furthermore, if contaminants are discovered in our supply of our product candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. We cannot assure you that any stability failures or other issues relating to the manufacture of our product candidates will not occur in the future. Additionally, our manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments. If our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide our product candidate to patients in clinical trials would be jeopardized. Any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to begin new clinical trials at additional expense or terminate clinical trials completely.

Cell-based therapies rely on the availability of reagents, specialized equipment, and other specialty materials, which may not be available to us on acceptable terms or at all. For some of these reagents, equipment, and materials, we rely or may rely on sole source vendors or a limited number of vendors, which could impair our ability to manufacture and supply our products.

Manufacturing our product candidates will require many reagents and viruses, which are substances used in our manufacturing processes to bring about chemical or biological reactions, and other specialty materials and equipment, some of which are manufactured or supplied by small companies with limited resources and experience to support commercial biologics production. We currently depend on a limited number of vendors for certain materials and equipment used in the manufacture of our product candidates. Some of these suppliers may not have the capacity to support commercial products manufactured under GMP by biopharmaceutical firms or may otherwise be ill-equipped to support our needs. We also do not have supply contracts with many of these suppliers and may not be able to obtain supply contracts with them on acceptable terms or at all. Accordingly, we may experience delays in receiving key materials and equipment to support clinical or commercial manufacturing.

For some of these reagents, viruses, equipment, and materials, we rely and may in the future rely on sole source vendors or a limited number of vendors. An inability to continue to source product from any of these suppliers, which could be due to regulatory actions or requirements affecting the supplier, adverse financial or other strategic developments experienced by a supplier, labor disputes or shortages, unexpected demands, or quality issues, could adversely affect our ability to satisfy demand for our product candidates, which could adversely and materially affect our product sales and operating results or our ability to conduct clinical trials, either of which could significantly harm our business.

As we continue to develop and scale our manufacturing process, we expect that we will need to obtain rights to and supplies of certain materials and equipment to be used as part of that process. We may not be able to obtain rights to such materials on commercially reasonable terms, or at all, and if we are unable to alter our process in a commercially viable manner to avoid the use of such materials or find a suitable substitute, it would have a material adverse effect on our business.

We currently have no marketing and sales organization and have no experience in marketing therapeutic products. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to generate product revenue.

We currently have no sales, marketing, or commercial therapeutic product distribution capabilities and have no experience in marketing products. We intend to develop an in-house marketing organization and sales force, which will require significant capital expenditures, management resources, and time. We will have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train, and retain marketing and sales personnel. If we are unable or decide not to establish internal sales, marketing and commercial distribution capabilities for any or all products we develop, we will likely pursue collaborative arrangements regarding the sales and marketing of our products. However, there can be no assurance that we will be able to establish or maintain such collaborative arrangements, or if we are able to do so, that they will have effective sales forces. Any revenue we receive will depend upon the efforts of such third parties, which may not be successful. We may have little or no control over the marketing and sales efforts of such third parties, and our revenue from product sales may be lower than if we had commercialized our product candidates ourselves. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our product candidates.

There can be no assurance that we will be able to further develop in-house sales and commercial distribution capabilities or establish or maintain relationships with third-party collaborators to successfully commercialize any product in the United States or overseas, and as a result, we may not be able to generate product revenue.

A variety of risks associated with operating our business internationally could materially adversely affect our business. We plan to seek regulatory approval of our product candidates outside of the United States and, accordingly, we expect that we, and any potential collaborators in those jurisdictions, will be subject to additional risks related to operating in foreign countries, including:

These and other risks associated with our planned international operations may materially adversely affect our ability to attain or maintain profitable operations.

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

The biopharmaceutical industry, and the rapidly evolving market for developing cell-based therapies is characterized by intense competition and rapid innovation. Our competitors may be able to develop other compounds or drugs that are able to achieve similar or better results. Our potential competitors include major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, and other research institutions. Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations as well as established sales forces. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer, more easily commercialized, or less costly than our product candidates or may develop proprietary technologies or secure patent protection that we may need for the development of our technologies and products.

Specifically, we face significant competition from companies in the insulin therapy market. Insulin therapy is widely used for Insulin-Dependent Diabetes Mellitus (IDDM) patients who are not controlled with oral medications. The global diabetes market comprising the insulin, insulin analogues and other anti-diabetic drugs has been evolving rapidly. A look at the diabetes market reveals that it is dominated by a handful of participants such as Novo Nordisk A/S, Eli Lilly and Company, Sanofi-Aventis, Takeda Pharmaceutical Company Limited, Pfizer Inc., Merck KgaA, and Bayer AG. Even if we obtain regulatory approval of our product candidates, we may not be the first to market and that may affect the price or demand for our product candidates. Additionally, the availability and price of our competitors’ products could limit the demand and the price we are able to charge for our product candidates. We may not be able to implement our business plan if the acceptance of our product candidates is inhibited by price competition or the reluctance of physicians to switch from existing methods of treatment to our product candidates, or if physicians switch to other new drug or biologic products or choose to reserve our product candidates for use in limited circumstances. Additionally, a competitor could obtain orphan product exclusivity from the FDA with respect to such competitor’s product. If such competitor product is determined to be the same product as one of our product candidates, that may prevent us from obtaining approval from the FDA for such product candidate for the same indication for seven years, except in limited circumstances.

We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract, motivate and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on our senior management, particularly our ~~chief science officer, Prof. Sarah Ferber and our chief executive officer,~~Chief Executive Officer, Vered Caplan. The loss of the services of any of our executive officers, other key employees, and other scientific and medical advisors, and our inability to find suitable replacements, could result in delays in product development and harm our business. Competition for skilled personnel is intense and the turnover rate can be high, which may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all.

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided stock option grants that vest over time. The value to employees of these equity grants that vest over time may be significantly affected by movements in our stock price that are beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies. Although we have employment agreements with our key employees, most these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice. We do not maintain “key man” insurance policies on the lives of all of these individuals or the lives of any of our other employees.

We may fail to comply with the continued listing requirements of the Nasdaq Capital Market, such that our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.

Our common stock is listed for trading on the Nasdaq Capital Market. We must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share for 30 consecutive business days (the “Minimum Bid Price Requirement”). If a company trades for 30 consecutive business days below the $1.00 minimum closing bid price requirement, Nasdaq will send a deficiency notice to the company advising that it has been afforded a “compliance period” of 180 calendar days to regain compliance with the applicable requirements. We received such a notice on September 27, 2023 and thus risk delisting unless we are able to regain compliance in a timely fashion.

In accordance with Nasdaq Listing Rules, we were provided an initial period of 180 calendar days to regain compliance with the Minimum Bid Price Requirement. The initial compliance period ended on March 25, 2024 and we did not evidence compliance with the Minimum Bid Price Requirement during the initial compliance period. On March 26, 2024, we received a new letter from the Staff stating that it had determined to grant the Company an extension through September 23, 2024 to evidence compliance with the Minimum Bid Price Requirement. If at any time before September 23, 2024, the closing bid price of our common stock is at least $1.00 per share for a minimum of 10 consecutive business days, the Staff will provide written notification that we have achieved compliance with the Minimum Bid Price Requirement and the common stock will continue to be eligible for listing on the Nasdaq Capital Market. If, however, compliance with the Minimum Bid Price Requirement cannot be demonstrated by September 23, 2024, the Staff will provide written notification that our common stock will be subject to delisting. At that time, we may appeal the Staff’s delisting determination to a Panel. There can be no assurance that, if we do appeal the Staff’s delisting determination to the Panel, such appeal would be successful.

There can be no assurance that we will regain compliance with the Minimum Bid Price Requirement, that we will maintain compliant with other Nasdaq listing requirements or that we will be granted a second compliance period. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.

If we issue additional shares in the future, it will result in the dilution of our existing stockholders.

Our articles of incorporation authorizes the issuance of up to 145,833,334 shares of our common stock with a par value of $0.0001 per share. Our Board of Directors may choose to issue some or all of such shares to acquire one or more companies or products and to fund our overhead and general operating requirements. The issuance of any such shares will reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current stockholders. Further, such issuance may result in a change of control of our company.

Our stock price and trading volume may be volatile, which could result in losses for our stockholders.

The equity trading markets have recently experienced high volatility resulting in highly variable and unpredictable pricing of equity securities. If the turmoil in the equity trading markets continues, the market for our common stock could change in ways that ~~may or~~ may not be related to our business, our industry or our operating performance and financial condition. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include:

Many of these factors are beyond our control, and we cannot predict their potential effects on the price of our common stock. In addition, the stock market is subject to extreme price and volume fluctuations. During the ~~past~~ 52 weeks ended ~~November 30, 2017,~~December 31, 2023, our stock price has fluctuated from a low of ~~$2.76~~$1.23 to a high of ~~$11.76 (adjusted to account for the 1:12 reverse split implemented in November 2017).~~$3.74. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

No assurance can be provided that a purchaser of our common stock will be able to resell their shares of common stock at or above the price that they acquired those shares. We can provide no assurances that the market price of common stock will increase or that the market price of common stock will not fluctuate or decline significantly.

We do not intend to pay dividends on any investment in the shares of stock of our company.

We have never paid any cash dividends, and currently do not intend to pay any dividends for the foreseeable future. The Board of Directors has not directed the payment of any dividends and does not anticipate paying dividends on the shares for the foreseeable future and intends to retain any future earnings to the extent necessary to develop and expand our business. Payment of cash dividends, if any, will depend, among other factors, on our earnings, capital requirements, and the general operating and financial condition, and will be subject to legal limitations on the payment of dividends out of paid-in capital. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen, and investors may lose all of their investment in our company.

We have identified a material weakness in our internal control over financial reporting. Failure to achieve and maintain effective internal controls over financial reporting could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner, which could have an adverse impact on our business.

Ensuring that we have adequate internal financial and accounting controls and procedures in place to produce accurate financial statements on a timely basis has been, and will continue to be, costly and a time-consuming effort. In addition, the rapid changes in our operations and corporate structure have created a need for additional resources within the accounting and finance functions in order to produce timely financial information and to ensure the level of segregation of duties customary for a U.S. public company.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States (“GAAP”). Our management is also required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weakness identified. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement in our annual or interim consolidated financial statements might not be prevented or detected on a timely basis, as occurred with certain of our interim consolidated financial statements in 2023, which were then restated and corrected in amended Quarterly Reports on Form 10-Q prior to the filing of this Annual Report on Form 10-K. As described in Item 9A of this Annual Report on Form 10-K, there was a material weakness identified in our internal control over financial reporting.

We are working to remediate our material weakness as soon as practicable. Our remediation plan, which is continuing to be developed, can only be accomplished over time, and these initiatives may not accomplish their intended effects. Failure to maintain our internal control over financial reporting could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis or result in misstatements. Likewise, if our financial statements are not filed on a timely basis, we could be subject to regulatory actions, legal proceedings or investigations by Nasdaq, the SEC or other regulatory authorities, which could result in a material adverse effect on our business and/or we may not be able to maintain compliance with certain of our agreements. Ineffective internal controls could also cause investors to lose confidence in our financial reporting, which could have a negative effect on our stock price, business strategies and ability to raise capital.

Even after the remediation of our material weakness, our management does not expect that our internal controls will ever prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. No evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the business will have been detected.

We recognize the critical importance of maintaining the trust and confidence of customers, clients, patients, business partners and employees toward our business and are committed to protecting the confidentiality, integrity and availability of our business operations and systems. Our board of directors is actively involved in oversight of our risk management activities, and cybersecurity represents an important element of our overall approach to risk management. Our cybersecurity policies, standards, processes and practices are based on recognized frameworks established by our cybersecurity consultants and other applicable industry standards. In general, we seek to address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security and availability of the information that we collect and store by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.

We face risks related to cybersecurity such as unauthorized access, cybersecurity attacks and other security incidents, including as perpetrated by hackers and unintentional damage or disruption to hardware and software systems, loss of data, and misappropriation of confidential information. To identify and assess material risks from cybersecurity threats, we maintain a comprehensive cybersecurity program to ensure our systems are effective and prepared for information security risks, including regular oversight of our programs for security monitoring for internal and external threats to ensure the confidentiality and integrity of our information assets. We consider risks from cybersecurity threats alongside other company risks as part of our overall risk assessment process. We employ a range of tools and services, including regular network and endpoint monitoring, audits, vulnerability assessments, penetration testing, threat modeling and tabletop exercises to inform our risk identification and assessment. As discussed in more detail under “Cybersecurity Governance” below, our board of directors provides oversight of our cybersecurity risk management and strategy processes, which are led by our Chief Executive Officer.

We also identify our cybersecurity threat risks by comparing our processes to standards set by the Center for Internet Security (CIS) as well as by engaging experts to attempt to infiltrate our information systems. To provide for the availability of critical data and systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against and respond to cybersecurity incidents, we undertake the following activities:

● monitor emerging data protection laws and implement changes to our processes that are designed to comply with such laws and implement latest Center for Internet Security benchmarks to comply with up-to-date requirements;

● through our policies, practices and contracts (as applicable), require employees, as well as third parties that provide services on our behalf, to treat confidential information and data with care, including using policies “right to know” and “right to access” with granular access to confidential information;

● employ technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence, including active threat hunting and alerts monitoring by cyber security operators, threat analytics, endpoint management and application evaluations;

● provide regular, mandatory training for our employees and contractors regarding cybersecurity threats as a means to equip them with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices;

● conduct regular phishing email simulations for all employees and contractors with access to our email systems to enhance awareness and responsiveness to possible threats, including built-in tools for phishing campaigns and attack simulators and usage of sandbox environment to evaluate threats;

● conduct annual cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data;

● run tabletop exercises to simulate a response to a cybersecurity incident and use the findings to improve our processes and technologies;

● leverage the NIST incident handling framework to help us identify, protect, detect, respond and recover when there is an actual or potential cybersecurity incident; and

● carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident.

Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including our suppliers and manufacturers or who have access to patient and employee data or our systems. In addition, cybersecurity considerations affect the selection and oversight of our third-party service providers. We perform diligence on third parties that have access to our systems, data or facilities that house such systems or data, and continually monitor cybersecurity threat risks identified through such diligence. Additionally, we generally require those third parties that could introduce significant cybersecurity risk to us to agree by contract to manage their cybersecurity risks in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate.

We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “We are increasingly dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity and data storage risks.” which disclosures are incorporated by reference herein.

In the last three fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial. This includes penalties and settlements, of which there were none.

Cybersecurity is an important part of our risk management processes and an area of focus for our board of directors and management. In general, our board of directors oversees risk management activities designed and implemented by our management, and considers specific risks, including, for example, risks associated with our strategic plan, business operations, and capital structure. Our board of directors executes its oversight responsibility for risk management both directly and through delegating oversight of certain of these risks to its committees, and our board of directors has authorized our audit committee to oversee risks from cybersecurity threats.

Our board of directors receives an annual update, and more often if required, from management of our cybersecurity threat risk management and strategy processes covering topics such as data security posture, results from third-party assessments, progress towards pre-determined risk-mitigation-related goals, our incident response plan, and material cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks. In such sessions, our board of directors generally receives a report that details includes cybersecurity details and other materials discussing current and emerging material cybersecurity threat risks, and describing our ability to mitigate those risks, as well as recent developments, evolving standards, technological developments and information security considerations arising with respect to our peers and third parties, and discusses such matters with our Chief Executive Officer and also receive prompt and timely information regarding any cybersecurity incident that meets establishing reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed.

Members of board of directors are also encouraged to regularly engage in conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs. Material cybersecurity threat risks are also considered during separate board meeting discussions of important matters like enterprise risk management, operational budgeting, business continuity planning, mergers and acquisitions, brand management, and other relevant matters.

Our cybersecurity risk management and strategy processes, which are discussed in greater detail above, are led by our Chief Executive Officer and our external cybersecurity consultants. These are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan. As discussed above, these consultants report to management about cybersecurity threat risks, among other cybersecurity related matters, at least annually.

We do not own any real property. A description of the leased premises we utilize in several of our facilities is as follows:

We believe that our facilities are generally in good condition and suitable to carry on our business. We also believe that, if required, suitable alternative or additional space will be available to us on commercially reasonable terms.

See note 22 of Item 8 of this Annual Report on Form 10-K for details of pending legal proceedings.

Except as described therein, we are not involved in any pending material legal ~~proceedings that we anticipate would result in a material adverse effect on our business or operations.~~proceedings.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Since March 13, 2018, our common stock has been listed for trading on the ~~OTCQB~~Nasdaq Capital Market (“Nasdaq CM”) under the ~~trading~~ symbol “ORGS.”

The following table shows the quarterly high and low bid prices or sales prices for our common stock over the last two completed fiscal years and subsequent interim periods, as quoted on the OTCQB Platform. The prices represent quotations by dealers without adjustments for retail mark-ups, mark-downs or commissions and may not represent actual transactions.

~~The prices have been adjusted to reflect the 1 for 12 reverse stock split of our common stock that became effective on November 16, 2017.~~

As of ~~February 28, 2018,~~April 12, 2024, there were 76346 holders of record of our common stock, and the last reported sale price of our common stock on the ~~OTCQB~~NasdaqCM on ~~February 27, 2018~~April 12, 2024 was ~~$8.09.~~$0.49. A significant number of shares of our common stock are held in either nominee name or street name brokerage accounts, and consequently, we are unable to determine the total number of beneficial owners of our common stock.

To date, we have paid no dividends on our common stock and do not expect to pay cash dividends in the foreseeable future. We plan to retain all earnings to provide funds for the operations of our company. In the future, our Board of Directors will decide whether to declare and pay dividends based upon our earnings, financial condition, capital requirements, and other factors that our Board of Directors may consider relevant. We are not under any contractual restriction as to present or future ability to pay dividends.

~~During the three months ended November 30, 2017, our financing activities consisted of the following:~~

Between September and November 2017, we issued in private placement to accredited or offshore investors 160,265 shares of common stock and three-year common stock purchase warrants for an additional 160,265 shares of our common stock, exercisable at a per share exercise price of $6.24 for aggregate gross proceeds of $1,000,053.None.

Between September and November 2017, we issued in private placement to accredited or offshore investors our convertible promissory notes in the aggregate principal amount of $1.1 million which are convertible into closing on $1.1 million, in private placement debt offerings through the issuance our convertible promissory notes with maturity dates of twenty-four months, convertible as of November 30, 2017 into 176,282 shares of our common stock and 176,282 three-year warrants to purchase up to an additional 176,282 shares of our common stock at a per share exercise price of $6.24.

All of the securities issued in the transactions described above were issued without registration under the Securities Act in reliance upon the exemptions provided in Section 4(2) of the Securities Act or Regulation S under such Securities Act. Except with respect to securities sold under Regulation S, the recipients of securities in each such transaction acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof. Appropriate legends were affixed to the share certificates issued in all of the above transactions. Each of the recipients represented that they were “accredited investors” within the meaning of Rule 501(a) of Regulation D under the Securities Act, or had such knowledge and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in its common stock. All recipients had adequate access, through their relationships with the Company and its officers and directors, to information about the Company. None of the transactions described above involved general solicitation or advertising.

~~We do not have a stock repurchase program for our common stock and have not otherwise purchased any shares of our common stock.~~

ITEM 7. 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, 2023 and December 31, 2022 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, 2023, as compared to the year ended December 31, 2022.

This discussion should be read in conjunction with our consolidated financial statements for the years ended December 31, 2023 and ~~the~~December 31, 2022 and related notes ~~related to those statements. Some~~included elsewhere in this Annual Report on Form 10-K. These historical financial statements may not be indicative of our ~~discussion is~~future performance. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains numerous forward-looking ~~and involves risks and uncertainties. For information regarding risk factors that could have a material adverse effect~~statements, all of which are based on our ~~business, refer~~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)

We are a global biotech company working to unlock the ~~“risk factors” section~~potential of CGTs in an affordable and accessible format. CGTs can be centered on autologous (using the patient’s own cells) or allogenic (using master banked donor cells) and are part of a class of medicines referred to as advanced therapy medicinal products, or ATMPs. We are mostly focused on autologous therapies that can be manufactured under processes and systems that are developed for each therapy using a closed and automated approach that is validated for compliant production near the patient for treatment of the patient at the point of care, or POCare. This approach has the potential to overcome the limitations of traditional commercial manufacturing methods that do not translate well to commercial production of advanced therapies due to their cost prohibitive nature and complex logistics to deliver such treatments to patients (ultimately limiting the number of patients that can have access to, or can afford, these therapies).

To achieve these goals, we have developed a collaborative worldwide network of research institutes and hospitals who are engaged in the POCare model, or our POCare Network, and a pipeline of licensed POCare advanced therapies that can be processed and produced under such closed and automated processes and systems, or POCare Therapies. We are developing our pipeline of advanced therapies and with the goal of entering into out-licensing agreements for these therapies.

Following the Metalmark Investment in November 2022, we separated our operations into two operating segments namely 1) Octomera and 2) Therapies. Prior to that, we conducted all of our operations as one single segment. The Octomera operations includes mainly POCare Services, and include the results of the subsidiaries transferred to Octomera. The Therapies segment includes our therapeutic development operations. The segment information presented in note 5 of Item 8 of this ~~annual report.~~Annual Report on Form 10-K reflects the results of the subsidiaries that were transferred to Octomera.

While the ~~state~~biotech industry struggles to determine the best way to lower cost of ~~Nevada on June 5, 2008 under~~goods and enable CGTs to scale, the ~~name Business Outsourcing Services, Inc. Effective August 31, 2011, we completed a merger with our subsidiary, Orgenesis Inc., a Nevada corporation, which was incorporated solely~~scientific community continues to ~~effect a change in its name. As a result, the Company changed its name from “Business Outsourcing Services, Inc.” to “Orgenesis Inc.”~~

~~Our strategy is to accelerate~~advance and push the development of ~~breakthrough life-improving medical treatments through~~such therapies to new heights. Clinicians and researchers are excited by all the new tools (new generations of industrial viruses, big data analysis for genetic and molecular data) and technologies (CRISPR, mRNA, etc.) available, often at a ~~hybrid business model combining proprietary technologies~~low cost, to perform advanced research in ~~our CT and CDMO businesses.~~

~~On October 11, 2011, we incorporated Orgenesis Ltd. as our wholly-owned subsidiary under~~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 ~~laws of Israel. On February 2, 2012, Orgenesis Ltd. signed and closed a definitive agreement~~resources to ~~license from Tel Hashomer - Medical Research, Infrastructure and Services Ltd. (“THM”), a private company duly incorporated under the laws of Israel, patents and know-how related to~~continue the development of ~~AIP (Autologous Insulin Producing) cells. Through Orgenesis Ltd., we became engaged~~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 built. Further the cost of production during the clinical stage is extremely expensive, and the cost of the clinical trial itself is very high. Given these financial restraints, researchers and institutes hope to out-license their therapeutic products to large biotech companies or spin-out new companies and raise large fundraising rounds. However, in ~~our CT business.~~many cases they lack the resources and the capability to de-risk their therapeutic candidates enough to be attractive for such fundings or partnership.

~~On November 6, 2014 we entered into~~Our POCare Network is an ~~agreement~~alternative to the traditional pathway of drug development. We collaborate with the shareholders of MaSTherCell S.A. to acquire MaSTherCell S.A. On March 2, 2015, we closed on the acquisition of MaSTherCell whereby it became a wholly-owned subsidiary of Orgenesis. Through MaSTherCell, we became engaged in the CDMO business. Currently, the Company’s revenues are generated through MaSTherCell.

academic institutions and entities that have been spun out from such institutions. We are ~~a service and research company~~in close contact with researchers who are experts in the field of the drug and also partners with leading hospitals and research institutes. Based on such collaborations, we enter into in-licensing agreements with relevant institutions for promising therapies with the aim of adapting them to a point-of-care setting through regional or strategic biological partnerships. Based on the results of the collaboration, we are then able to out-license our own therapeutic developments, as well as those therapies developed from in-licensing agreements to out-licensing partners at preferred geographical regions.

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. The POCare Therapies division reviews many therapies available for out licensing and select the ones which they believe have the highest market potential, can benefit the most from a point of care approach and have the highest chance of clinical success. It assesses such issues by utilizing its global POCare Network and its internal knowhow accumulated over a decade of involvement in the field.

The goal of this in-licensing is to quickly adapt such therapies to a point-of-care approach through regional partnerships, and to out-license the products 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.

Octomera LLC (“Octomera” or “Morgenesis”) is responsible for most of our POCare services platform. The POCare Services platform is utilized by parties such as biotech companies and hospitals for the supply of their products. Octomera’s services include adapting the process to the platform and supplying the products, or POCare Services. These are services for third party companies and for CGTs that are not necessarily based on our POCare Therapies. POCare services that we and our affiliated entities perform include:

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 ~~focus on cell therapy~~goal of achieving standardized, regulated clinical development and manufacturing for advanced medicinal products serving the regenerative medicine industry. In addition, we are focused on developing novel and proprietary cell therapy trans-differentiation technologies for the treatment of diabetes, with a revenue generating contract development and manufacturing service business to serve the regenerative medicine industry.

Our vertically integrated manufacturing capabilities are being used to serve to emerging technologies of other cell therapy markets in such areas as cell-based cancer immunotherapies and neurodegenerative diseases and also to optimize our abilities to scale-up our technologies for clinical trials and eventual commercialization of our proposed diabetes treatment. Our hybrid business model of combining our own proprietary cell therapy trans-differentiation technologies for the treatment of diabetes and a revenue-generating contract development and manufacturing service business provides us with unique capabilities and supports our mission of accelerating the development and ultimate marketing of breakthrough life-improving medical treatments.

We seek to differentiate our company from other cell therapy companies through MaSTherCell and a world-wide network of CDMO joint venture partners who have built a unique and fundamental base platform of know-how and expertise for manufacturing in a multitude of cell types. The goal is to industrialize cell therapy for fast, safe and cost-effective production in order to provide rapid therapies for any market around the world. All these services are already compliant with GMP requirements, ensuring identity, purity, stability, potency and robustness of cell therapy products for clinical phase I, II, III through commercialization.

We have leveraged the recognized expertise and experience in cell process development and manufacturing of MaSTherCell, and our international joint ventures, in Israel and Korea, to build a global and fully integrated bio-pharmaceutical company in the cell therapy development and manufacturing area. We believe that cell therapy companies need to be global in order to truly succeed. In furtherance of that belief, we intend to expand our establishment of CDMO facilities to the United States and other international markets. We target the international manufacturing market as a key priority through joint-venture agreements that provide development capabilities, along with manufacturing facilities and experienced staff. All of these capabilities offered to third-parties will be mobilized for our internal development projects, allowing us to be in a position to bring new products to the patients faster and in a cost-effective way.

Our trans-differentiation technologies for treating diabetes, which we refer to as our cellular therapy (“CT”) business, is based on a technology licensed by our Israeli Subsidiary, that demonstrates the capacity to induce a shift in the developmental fate of cells from the liver and transdifferentiating them into “pancreatic beta cell-like” Autologous Insulin Producing (“AIP”) cells for patients with Type 1 Diabetes. Moreover, those cells were found to be resistant to autoimmune attack and to produce insulin in a glucose-sensitive manner in relevant animal models which significantly broadens the potential of the technology for other therapeutics areas. Our trans-differentiation technology for diabetes is from the work of Prof. Sarah Ferber, our Chief Science Officer and a researcher at Tel Hashomer Medical Research Infrastructure and Services Ltd. (“THM”) in Israel. Our development plan calls for conducting additional preclinical safety and efficacy studies with respect to diabetes and other potential indications prior to initiating clinical trials. In parallel, we work on establishing the GMP manufacturing process which development is already accomplished.

~~Companies developing cell therapies need to make a decision early on in their approach to the transition from the lab to the clinic regarding the manufacturing~~ and production of therapies.

We conduct our core POCare operations through our wholly-owned subsidiary Octomera which was a consolidated subsidiary of the ~~cells necessary~~Company until June 30, 2023 and which became a consolidated subsidiary again effective January 29, 2024. Octomera’s subsidiaries which are all wholly owned except as otherwise stated below (collectively, the “Subsidiaries”) include:

During 2023, we and MM invested $660 and $6,500 respectively into Octomera in exchange for ~~their respective treatments. Of~~Octomera preferred shares.

During 2023, we and MM loaned $276 and $2,475 respectively to Octomera’s subsidiary, Orgenesis Maryland LLC. The loans bear 10% annual interest and were originally scheduled to be repaid during 2024. Pursuant to an extension agreement signed between us and MM on January 28, 2024, the ~~companies active in this market, only~~maturity date of the MM loans was extended to January 28, 2034.

On February 23, 2023, we entered into a ~~small number have established their own GMP manufacturing facilities due~~securities purchase agreement with certain institutional and accredited investors (the “Purchaser”) relating to the ~~high costs~~issuance and ~~expertise required to develop~~sale of 1,947,368 shares of our common stock, and maintain such production centers. In addition to the limitations imposed by a limited number of trained personnel and high infrastructure/operational costs, we believe that the industry faces a need for custom innovative process development and manufacturing solutions. In this context, we have grown total revenue from $6.4 million in our fiscal year 2016 to $10.1 million for fiscal year 2017. The increased revenues derive from an increase in the volume of the services provided by our CDMO segment, namely our Belgian-based subsidiary, MaSTherCell, through its customer service contracts with existing customers and the entry into new customer service contracts with leading biotech companies, as well as from revenues generated from existing manufacturing agreements.

~~We define our backlog as products that we are obligated to deliver or services to be rendered based on firm commitments relating~~warrants to purchase ~~orders received from customers. As~~up to 973,684 shares of November 30, 2017, MaSTherCell had backlog of approximately $9.5 million, consisting of services that we expect to deliver into fiscal year 2018. However, no assurance can be provided that such contracts will not be cancelled, in which case we will not be authorized to deliver and record the anticipated revenues.

~~Following the SFPI investment in MaSTherCell in November 2017, MaSTherCell decided to expand its facilities with~~common stock (the “Warrants”) at a dedicated, late-stage clinical and commercial unit, anticipated to be operational by the end of 2018. This new asset will provide the most up-to-date commercial capabilities in Europe with five state-of-the-art advanced therapy manufacturing units and extended Good Manufacturing Practice (GMP)-accredited quality control (QC) laboratories.

Additionally, we announced a strategic organizational regrouping of our CDMO global manufacturing services offerings. The planned CDMO regrouping will utilize the global MaSTherCell brand, except for At-Vio Biotech Ltd. (“At-Vio”), for its unique technology and innovation activity located in Israel and serving the global cell and gene therapy markets. The primary purpose of the strategic regrouping is to create a more efficient CDMO corporate organization that can optimally utilize resources from the parent, Orgenesis Inc., and more efficiently broaden, streamline and harmonize the CDMO service offerings on a global basis utilizing the quality and standards of our flagship Belgian-based subsidiary, MaSTherCell S.A.

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, bad debts, investments, intangible assets and income taxes. Our estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

~~We have identified the accounting policies below as critical to our business operations and the understanding of our results of operations.~~

~~We allocated the~~ purchase price of ~~the business we acquired to the tangible~~$1.90 per share of common stock and ~~intangible assets acquired~~accompanying Warrants in a registered direct offering (the “February 2023 Offering”). The February 2023 Offering closed on February 27, 2023.

The Warrants have an exercise price of $1.90 per share, were exercisable immediately and liabilities assumed based upon their estimated fair values on the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. Acquired in-process backlog, customer relations, brand name and know how are recognized at fair value. The purchase price allocation process requires from us to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets. Direct transaction costs associated with the business combination are expensed as incurred. The allocation of the consideration transferred in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. We included the results of operations of the business that we acquired in the consolidated results prospectively fromwill expire five years following the date of ~~acquisition when control was obtained.~~issuance. The Warrants had an alternate cashless exercise option (beginning on or after the earlier of (a) the thirty-day anniversary of the date of the Purchase Agreement and (b) the date on which the aggregate composite trading volume of Common Stock following the public announcement of the pricing terms exceeds 13,600,000 shares), to receive an aggregate number of shares equal to the product of (x) the aggregate number of shares of Common Stock that would be issuable upon a cash exercise and (y) 1.0. The aggregate gross proceeds to us from the February 2023 Offering were $3,700, before deducting placement agent cash fees equal to 7.0% of the gross proceeds received and other expenses from the Offering payable by us.

~~Intangible assets are recorded at acquisition cost less accumulated amortization and impairment. Definite lived intangible assets are amortized over their estimated useful life~~As of September 30, 2023, all of the Warrants were exercised using the ~~straight-line method over their estimated period~~alternate cashless exercise option described above.

On August 31, 2023, we entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which we agreed to issue and sell, in a private placement (the “August 2023 Offering”), 2,000,000 shares of ~~useful life, which is determined by identifying the period over which the cash flows are expected to be generated.~~

~~Goodwill represents the excess of the~~our common stock at a purchase price of $0.50 per share. We received proceeds of $1,000. The August 2023 Offering closed on August 31, 2023.

On November 8, 2023, we entered into a Securities Purchase Agreement with an ~~acquired business over~~institutional investor named therein, pursuant to which we agreed to issue and sell, in a registered direct offering directly to the ~~estimated fair value~~investor (the “November 2023 Offering”), (i) 1,410,256 shares of our common stock and (ii) warrants exercisable for 1,410,256 shares of common stock. The combined offering price for each share and accompanying warrant was $0.78. The warrants were exercisable immediately following the ~~identifiable net assets acquired. Goodwill is not amortized but is tested~~date of issuance and may be exercised for ~~impairment~~a period of five years from the initial exercisability date at ~~least annually (at~~an exercise price of $0.78 per share. We received proceeds of $1,100. The November ~~30), at~~2023 Offering closed on November 9, 2023.

On July 25, 2023, the ~~reporting unit level or more frequently if events or changes~~Israeli subsidiary received a loan from an offshore investor in circumstances indicate that the goodwill might be impaired. The goodwill impairment test is applied by performing a qualitative assessment before calculating the fair value of the reporting unit. If, on the basis of qualitative factors, it is considered not more likely than not that the fair value of the reporting unit is less than the carrying amount, further testing of goodwill for impairment would not be required. Otherwise, goodwill impairment is tested using a two-step approach.

The first step involves comparing the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit is determined to be greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount is determined to be greater than the fair value, the second step must be completed to measure the amount of ~~impairment, if any.~~$175. The ~~second step involves calculating~~loan bears 8% annual interest and is repayable on January 1, 2024. During 2024, the implied fair value of goodwill by deducting the fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the fair value of the reporting unit as determined in step one. The implied fair value of the goodwill in this step is compared to the carrying value of goodwill. If the implied fair value of the goodwill is less than the carrying value of the goodwill, an impairment loss equivalent to the difference is recorded.

As of November 30, 2017, the fair value of the reporting unit, our CDMO, exceeded the carrying value by approximately $10.4 million. A decrease in the terminal year growth rate of 1% and an increase in the discount rate of 1% would reduce the fair value of the reporting unit by approximately $1.1 million and $2.3 million, respectively. These changes would not result in an impairment. Given the small amount that the fair value exceeded the carrying value of the reporting unit, a negative change in the future to the income approach based on discounted cash flows of a number of assumptions (including the expected cash flows, discount rate, growth rate and terminal rate) will result in an impairment. Given that the reporting unit is still in its growth stage, there can be no assurance that an impairment may not occur in the near future.

We are reviewing the property and equipment, intangible assets subject to amortization and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset class may not be recoverable. Indicators of potential impairment include an adverse change in legal factors or in the business climate that could affect the value of the asset; an adverse change in the extent or manner in which the asset is used or is expected to be used, or in its physical condition; and current or forecasted operating or cash flow losses that demonstrate continuing losses associated with the use of the asset. If indicators of impairment are present, the asset is tested for recoverability by comparing the carrying value of the asset to the related estimated undiscounted future cash flows expected to be derived from the asset. If the expected cash flows are less than the carrying value of the asset, then the asset is considered to be impaired and its carrying value is written down to fair value, based on the related estimated discounted cash flows. There were no indicators for impairment charges in 2017 and 2016 and, therefore, no fair value assessment was performed.

We recognize the revenue for services linked to cell process development and cell manufacturing services based on individual contracts in accordance with Accounting Standards Codification (“ASC”) 605,~~Revenue Recognition~~, when the following criteria have been met: persuasive evidence of an arrangement exists; delivery of the processed cells has occurred or the services that are milestones based have been provided; the price is fixed or determinable and collectability is reasonably assured. We determine that persuasive evidence of an arrangement exists based on written contracts that define the terms of the arrangements. In addition, we determine that services have been delivered in accordance with the arrangement. We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. Service revenues are recognized as the services are provided.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”) "Revenue from Contracts with Customers." ASU 2014-09 will supersede most current revenue recognition guidance, including industry-specific guidance. The underlying principle is that an entity will recognize revenue upon the transfer of goods or services to customers in an amount that the entity expects to be entitled to in exchange for those goods or services. On July 9, 2015, the FASB deferred the effectivematurity date of the ~~standard~~loan was extended by ~~one year, which results~~a year.

On August 15, 2023, the Company received a loan from an investor in the ~~new standard being effective for~~amount of $250. The loan bears 8% annual interest and is repayable on January 1, 2024.

During October and November 2023, the ~~Company at~~Israeli subsidiary received loans in the ~~beginning~~amount of ~~its first quarter~~$150. The loans are interest free and repayable between November 30, 2023 and January 1, 2024. During 2024, the maturity date of ~~fiscal year 2018.~~ the loans was extended by a year.

During October through December 2023, Orgenesis Maryland, LLC received $2,726 of loans which bear 10% annual interest and were originally scheduled to be repaid during 2024. Pursuant to an extension agreement signed between us and MM on January 28, 2024, the maturity dates of the MM loans were extended to January 28, 2034

In addition, during ~~March, April~~2023, we continued the development of license agreements previously entered into, as described more fully in notes 12 and May 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, respectively, which clarified the guidance13 to our consolidated financial statements included in Item 8 of this Annual Report on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability and presentation of sales taxes. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. As applicable for the Company, the effective date for adopting the ASU is for the year ending November 30, 2019. The Company is currently evaluating the impact of adopting ASU 2014-09 on its financial position, results of operations and related disclosures and has not yet determined whether the effect of the revenue portion will be material.Form 10-K.

We also incur revenue from selling of some consumables which are incidental to the services provided as foreseen in the clinical services contracts. Such revenue is recognized upon delivery of the processed cells in which they were consumed.

Comparison of the Year Ended ~~November 30, 2017~~December 31, 2023 to the Year Ended ~~November 30, 2016~~December 31, 2022.

Our ~~loss before income tax~~financial results for the year ended ~~November 30, 2017~~December 31, 2023 are summarized as follows in comparison to ~~our expenses for~~ the year ended ~~November 30, 2016:~~December 31, 2022:

Our revenues for the year ended ~~November 30, 2017 are summarized~~December 31, 2023 were $530, as ~~follows in comparison~~compared to ~~its revenues~~$36,025 for the year ended ~~November~~December 31, 2022, representing a decrease of 99%. This was attributable failure of customers to timely pay for services received and to the deconsolidation of Octomera at June 30, ~~2016:~~

All revenues were derived from our subsidiary, MaSTherCell. Manufacturing activities increased by $3,692 thousand, or 58%, reflecting our revenue diversification by source in the CDMO segment. We believe this reflects the market recognition2023. Almost all of our ~~CDMO business and our expertise and responsiveness to industry needs. Considering~~potential revenues was from Octomera. During the ~~vertical integration~~year ended December 31, 2023, the Octomera segment completed revenue performance obligations but did not recognize revenue for such completed performance obligations because certain revenue recognition conditions under ASC 606 were not satisfied.

A breakdown of ~~research and manufacturing segments,~~ the revenues ~~from other group companies related to manufacturing activities for its CT business were $1,395 thousand.~~per customer that constituted at least 10% of revenues is as follows:

In 2017, MaSTherCell benefited from the extension of manufacturing activities with its existing clients, together with agreements with leading pharmaceutical companies like Servier and CRISPR. In January 2017, MaSTherCell signed a master service agreement with Servier for the development of a manufacturing platform for allogeneic cell therapies. Under the master service agreement, MaSTherCell is developing a CAR-T cell therapy manufacturing platform, which will enable industrial and commercial manufacturing of Servier's cell therapy products. This is a critical step in the development of these products for later stage clinical trials.

In June 2017, MaSTherCell signed an agreement with CRISPR to develop and manufacture allogeneic CAR-T therapies. MaSTherCell will be responsible for the development and cGMP manufacturing of CTX101 for use in clinical studies. CTX101 is an allogeneic CAR T-cell therapy currently in development by CRISPR Therapeutics for the treatment of CD19 positive malignancies.Expenses

~~As with our revenues, all costs of revenues are derived from our Belgian Subsidiary, MaSTherCell.~~

Cost of revenues for the year ended ~~November 30, 2017 decreased by 11%, or $850 thousand,~~December 31, 2023 were $6,255, as compared to ~~2016. This decrease is driven by the salaries and related expenses~~$5,133 for the year ended ~~November 30, 2017 in~~December 31, 2022, representing an ~~amount~~increase of ~~$2,624 thousand,~~22%. This was due to increased costs including additional salaries, professional fees, and depreciation expenses incurred as ~~compared to $3,356 thousand during the same periods in 2016. It is primarily attributable to~~ a ~~decrease in salaries~~result of increased process development and ~~related expenses associated with an internal transformation program implemented in MaSTherCell~~cell processing revenues mainly in the ~~second quarter~~Octomera segment, which were incurred until the date of ~~2017 to evolve from an organization based on project to a matrix organization supported by transversal departments focusing on value creation. As part~~deconsolidation.

Cost of ~~the program, we changed the business positions~~development services and research and development expenses

Cost of certain employees from laboratory managers to general manager positions in order to reflect the current period’s business activity. Subsequently, these changes in business positions resulted in a shift of costs into generaldevelopment services and ~~administration expenses.~~

~~Raw materials~~research and development for the year ended ~~November 30, 2017 increased by 52%, or $923 thousand,~~December 31, 2023 were $10,623, as compared to ~~the year ended November 30, 2016. This was due to the increase in the volume of our manufacturing and process development services.~~

~~Amortization and depreciation expenses~~$21,933 for the year ended ~~November 30, 2017 decreased by 24%, or $313 thousand, as compared to the year ended November 2016. This~~December 31, 2022, representing a decrease of 52%. The decrease was ~~primarily~~mainly attributable to the ~~increase~~deconsolidation of the Octomera segment at June 30, 2023, and our decision to reduce investing in ~~the production facility useful life from 10 to 20 years~~subcontracting, professional and ~~due to an increase in the classification of depreciation expenses to~~consulting service fees and other research and development expenses related to assets used in our CT business. We increased the level of investment in tangible assets of MaSTherCell in 2017 by $1,038 thousand, including $326 thousand in assets related to the expansion plan of its facilities.this year.

We are a vertically integrated biopharmaceutical company combining proprietary technologies and manufacturing services. If process development and manufacturing activities are primarily reflected in revenues and costs of revenues, the research and development of our proprietary technologies are accounted as specific expenses. Our research and development expenses for the year ended November 30, 2017 are summarized as follows in comparison to our research and development expenses for the year ended November 30, 2016:

The increase in research and development expenses reflects management’s determination to move transdifferentiating technology to the next the stage towards clinical studies. In the year ended 2017, we focused our CT business on two major developments of our proprietary technology platform: (i) three-dimensional (3D) cell culture systems and (ii) process development of our technology for the sourcing of the starting material (liver sampling and cell collection) for the development of the autologous insulin producing (AIP) cells. In furtherance of these two developments, salaries and related expenses increased for the year ended November 30, 2017 compared to 2016, primarily due to the expansion of our development team in Israel and Belgium.

Our success depends substantially on the efforts and abilities of our senior management and certain key personnel. The competition for qualified management and key personnel, especially engineers, is intense. We believe that we will be able to retain qualified personnel through, among other things, the issuance of stock-based compensation. Stock-based compensation for the year ended November 30, 2017 increased by $384 thousand compared to the same period in 2016, due to new grants of stock options to employees during fiscal year 2017.

Selling, general and administrative expenses for the year ended ~~November 30, 2017 are summarized~~December 31, 2023 were $35,134, as ~~follows~~compared to $15,589 for the year ended December 31, 2022, representing an increase of 125%.

The increase was mainly due to increased expenses in ~~comparison to our~~the Octomera segment, where selling, general and administrative expense (excluding depreciation) for the year ended December 31, 2023 were $37,878 as compared to $7,762 for the year ended December 31, 2022, representing an increase of 388%. The increase was mainly as a result of an increase of credit losses in the amount of $29,774 included in other general and administrative expenses.

Share in net loss of associated company for the year ended December 31, 2023 was $ 734, as compared to $ 1,508 for the year ended December 31, 2022, representing an decrease of 51%. The decrease in Share in net loss of associated company in the year ended December 31, 2023 compared to the year ended December 31, 2022 is primarily attributable to a decline in Octomera revenues, and credit losses in the year ended December 31, 2023 resulting from higher than previously expected credit losses related to a group of customers that are significantly overdue in Octomera.

~~Selling, general and administrative expenses increased by $2,949, or 47%, in year ended November 30, 2017, primarily attributable~~December 31, 2023 were $699, as compared to (i) a decrease in stock based compensation in the 2017 periods attributable to the termination of the vesting period of options and shares awarded to executive officers and consultants in 2016; (ii) an increase in corporate governance costs in order to remediate specific material weaknesses; (iii) an increase in salaries and related expenses resulting from the retention of new senior management at our Belgian Subsidiary and new accounting staff in our financial department in our Israeli Subsidiary; (iv) an increase in professional fees resulting from the appointment of an independent third party to assess our risk management framework to manage enterprise risk and work on corporate governance; (v) and increase in accounting and legal expenses associated with exploring new strategic collaboration arrangements, new capital raising initiatives, repayment of bonds issued by MaSTherCell; (vi) an increase in legal expenses associated with the preparation of applications for new patents under our CT business; (vii) an increase in expenses related to expanding our CDMO network, namely expenses related to a joint venture which primarily consisted of salary expenses and set up related cost of the new production facility in Korea under our joint venture with CureCell Co. Ltd.

~~Financial income~~$1,061 for the year ended ~~November 30, 2017 increased by $1,188 thousand or 94%,~~December 31, 2022. These were attributable to the write-off of assets purchased in previous years.

The credit loss for the year ended December 31, 2023 was $2,688 compared to $0 for the ~~same period in 2016.~~year ended December 31, 2022. This was attributable to a provision created for a credit loss on a loan.

Financial expenses, net for the year ended December 31, 2023 were $2,499, as compared to $1,971 for the year ended December 31, 2022, representing an increase of 27%. The increase ~~in financial~~was mainly attributable to increased interest and related expenses on new and existing convertible loans.

Tax income, net for the year ended December 31, 2023 were $473, as compared to $209 for the year ended December 31, 2022, representing an increase of 126%. The increase is mainly attributable to ~~an increase (i) of $1.3 million~~increased tax liabilities in the ~~Stock-based compensation related to restricted shares~~U.S. Effective for years beginning after December 31, 2021, Internal Revenue Code Section 174 changed the tax treatment of research and ~~warrants issued~~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 ~~accordance with~~ the ~~terms~~United States and 15 years for R&E paid or incurred outside of the United States.

Current assets decreased by $42,242 between December 31, 2022 and December 31, 2023, due mainly to the deconsolidation of Octomera. The majority of cash and cash equivalents, restricted cash, and accounts receivable at December 31, 2022 were part of Octomera. Receivables from related parties in the amount of $458 are receivables from Octomera subsidiaries, that were consolidated at December 31, 2022 but not at December 31, 2023. Octomera became a consolidated subsidiary again effective January 29, 2024. In addition we provided a credit loss for a convertible loan ~~agreements (ii)~~in the amount of ~~0.5 million in interest expense on loans and convertible loans due~~$2,688 that was not yet repaid to $6.2 million new convertible loans invested in our company during the year ended 2017. In addition, the increase was partly offset due to a decrease in fair value of embedded derivative following total repayments of $1.8 million principal amount and accrued interest of convertible loan during the year ended 2017.us.

Current assets increased by $3 million, which was primarily attributable to an increase of $2.3 million in cash mainly derived from SFPI investment and $0.7 million in receivables from a related party due to advance payments under services agreements for virus production by Atvio.

Current liabilities increased by ~~$2.4 million, which was~~$497 between December 31, 2022 and December 31, 2023, primarily ~~attributable~~due to an increase ~~(i) of $1.5 million~~ in advanced payments on account of grant in connection with the new grant approved by the DGO6 to support a clinical study in Germany and Belgium (ii) of $2.3 million in deferred income paid upfront by our customers under new agreements signedaccounts payable in the ~~CDMO segment. The increase in deferred income is~~amount of $2,022 as a result of a ~~greater number~~shortage of ~~customer contracts during~~funds; an increase in tax payable in the ~~fiscal year and,~~amount of $451 as a result of increased tax in the US; and grants payable in the amount of $602 as a ~~greater number~~result of ~~required upfront payments from customers. The increase was partly~~a grant received. These increases were offset by ~~(i)~~ a ~~net decrease~~decline in short-term and current maturities of ~~$2.5 million~~convertible loans in the amount of $1,834 due to ~~repayments~~the extension of the maturity date of convertible loans ~~and convertible bonds and loans received (ii) a decrease of $0.5 million in accounts payable due~~ to ~~repayments to old debtors and (iii) $1.3 million in employees and related payables.~~2026 (see Note 10)

During year ended December 31, 2023, we ~~have~~ funded our operations ~~primarily through the sale of our securities~~from operations as well as from proceeds raised from equity and more recently, through revenue generated from the activities of MaSTherCell, our Belgian Subsidiary. As of November 30, 2017, we had negative working capital of $9.6 million, including cash and cash equivalents of $3.5 million.debt offerings.

Net cash used in operating activities ~~was approximately $3.8 million~~ for the year ended ~~November 30, 2017, we successfully expanded our global activity of the CDMO division while maintaining the same level of~~December 31, 2023 was approximately $14,837, as compared to net cash used in operating activities of approximately $24,924 for the year ended December 31, 2022. The decline was mainly as a result of

a loss of $64,918 for the ~~increased revenues at our subsidiary, MaSTherCell, thereby significantly increasing gross profit and generating cash~~year ended December 31, 2023 compared to ~~pay our ongoing operating expenses.~~a loss of $12,169 for the year ended December 31, 2022, which is mainly related a decline in activity in Octomera.

Net cash used in investing activities for the year ended ~~November 30, 2017 increased by $1.9 million, or 122%,~~December 31, 2023 was approximately $3,707, as compared to net cash used in investing activities of approximately $14,133 for the ~~same period in 2016,~~year ended December 31, 2022. The decrease was mainly due to ~~completion~~loans granted to associated entities last year not granted this year, reduced investments in OMPULs, and the deconsolidation of Octomera.

Net cash provided by financing activities for the year ended December 31, 2023 was approximately $13,618, as compared to net cash provided by financing activities of approximately $39,578 for the year ended December 31, 2022. During the year ended December 31, 2023 we raised equity investments in the net amount of 5,732, raised proceeds from loans in the amount of 635, raised proceeds from MM in the amount of $5,000 and repaid convertible loans in the amount of $3,000.

As of December 31, 2023, we had an accumulated deficit of $176,622 and for the year ended December 31, 2023 incurred negative operating cashflows of $14,837. Our activities have been funded by generating revenue, through offerings of our ~~obligation under the JV’s agreements with Atvio~~securities, and ~~CureCell in total amount of $2.4 million.~~

~~During the fiscal year ended November 30, 2017, our financing activities consisted of (i) closing on $5.3 million net of transaction costs in private placement equity offerings~~ through ~~the issuance of 828,409 units. Each unit~~proceeds from loans. There is comprised of (i) one share of the Company’s common stock and (ii) three-year warrant to purchase up to an additional one share of the Company’s Common Stock at a per share exercise price of $6.24 or $7.68 and (ii) closing on $5.9 million in private placement debt offerings consisting of convertible promissory notes with maturity dates of between six and twenty-four months.

~~We believe~~no assurance that our business ~~plan~~ will ~~provide sufficient liquidity~~generate sustainable positive cash flows to fund our ~~operating needs for~~business.

We will need to use mitigating actions such as to seek additional financing, refinance or amend the ~~next 12 months. However, there~~terms of existing loans or postpone expenses that are ~~factors that can impact our ability continue~~not based on firm commitments. In order to fund our ~~operating needs, including:~~

If we ~~cannot effectively manage these factors,~~can generate sustainable positive cash flows, we ~~may~~will need to raise additional ~~capital in order to fund our operating needs.~~

~~From~~funds. For the year ended December ~~1, 2017 to~~31, 2023 and as of the date of this report, we assessed our financial condition and concluded that based on ~~Form 10-K,~~our current and projected cash resources and commitments, as well as other factors mentioned above, there is a substantial doubt about our ability to continue as a going concern. We are planning to raise additional capital to continue our operations and to repay our outstanding loans when they become due, as well as to explore additional avenues to increase revenues and reduce expenditures. There can be no assurance that we ~~raised an aggregate~~will be able to raise additional capital on acceptable terms, or at all.

Our common stock is listed for trading on the Nasdaq Capital Market. We must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of ~~$3 million~~$1.00 per share for 30 consecutive business days (the “Minimum Bid Price Requirement”). If a company trades for 30 consecutive business days below the $1.00 minimum closing bid price requirement, Nasdaq will send a deficiency notice to the company advising that it has been afforded a “compliance period” of 180 calendar days to regain compliance with the applicable requirements. We received such a notice on September 27, 2023 and thus risk delisting unless we are able to regain compliance in a timely fashion.

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 ~~placements~~placement, 2,272,719 shares of our ~~securities with accredited investors. In addition, $720,000 was raised through convertible loans which are convertible at any time by the holders into units of our securities~~common stock, par value $0.0001 per share, at a ~~conversion~~purchase price ~~per unit~~ of ~~$6.24, with each unit comprised of one share of common stock and a warrant for an additional share of common stock exercisable for three years from the date of issuance at a~~$1.03 per share and warrants to purchase up to 2,272,719 shares of Common Stock at an exercise price of ~~$6.24.~~

~~For~~$1.50 per share and warrants to purchase up to 2,272,719 shares of Common Stock at an exercise price of $2.00 per share (collectively, the fiscal year ended November 30, 2017, we had been funding operations primarily from the proceeds from private placements of our convertible debt and equity securities and from revenues generated by MaSTherCell. From December 2016 through November 2017, we“Warrants”). We received ~~through MaSTherCell,~~gross proceeds of approximately ~~$8.9~~$2.3 million in revenues and accounts receivable from customers and $11.4 million from the private placement to accredited investors of our equity and equity linked securities and convertible loans, out of which $4.5 million is from the institutional investor with whombefore deducting related offering expenses.

On April 5, 2024, we entered into ~~definitive agreements in January 2017~~an Asset Purchase and Strategic Collaboration Agreement (the “Purchase Agreement”) with Griffin Fund 3 BIDCO, Inc., (“Germfree”), for the ~~private placement~~sale by us of ~~units of our securities for aggregate subscription proceeds~~five OMPULs to Germfree, which will be incorporated into Germfree’s lease fleet and leased back to us or third-party lessees designated by Orgenesis. Pursuant to the Purchase Agreement, and upon the terms and subject to the conditions set forth therein, in consideration for the purchase of ~~$16 million. The subscription proceeds are payable~~the OMPULs, the Orgenesis Quality Management Systems Framework (“OQMSF”) and related intellectual property rights, Germfree will pay us an aggregate purchase price of $8,340 subject to any final adjustment through the verification mechanism as set forth in the Purchase Agreement.

Pursuant to the Agreement, Germfree paid us $750 on ~~a periodic basis through August 2018.~~February 27, 2024 and $5,538 during April 2024.

The equity investment in November 2017 by SFPI in MaSTherCell of €5.9 million (approximately $6 million), which includes the conversion of €1 million in an outstanding loan by SFPI to MaSTherCell, will cover costs associated with an expansion of MaSTherCell’s manufacturing and production capabilities.

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

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, 2023. We believe that the accounting policies below are critical for one to fully understand and evaluate our financial condition and results of operations.

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.

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.

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

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 judgment is required toidentifying 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.

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.

Revenues from POCare Cell processing representperformance 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).

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 the 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.

The information called for by Item 8 is included following the “Index to Financial Statements” on page F-1 contained in this ~~annual report~~Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act ~~reports~~ is recorded, processed, summarized and reported within the time periods specified in the ~~SEC's~~SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our ~~chief executive and financial officers (our~~ principal executive officer and principal financial ~~and accounting~~ officer, ~~respectively)~~as appropriate, to allow timely decisions regarding required ~~disclosure based on the definition of "disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of November 30, 2017.~~disclosures. In designing ~~and evaluating the Company’s~~ disclosure controls and procedures, ~~the Company’s~~our management recognizes that controls and procedures are designed on a risk-based approach and, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The Company’s management isnecessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The ~~continuous improvement~~design of ~~the Company’s~~any disclosure controls and procedures also is based ~~on material weaknesses identification~~ in part upon certain assumptions about the ~~Company’s internal control over financial reporting.~~

~~Management recognizes~~likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving ~~their objectives~~the desired control objectives.

Our management, with the participation of our principal executive officer and ~~management necessarily applies its judgment in evaluating~~principal financial officer, has evaluated the ~~cost-benefit relationship~~effectiveness of ~~possible controls~~the design and ~~procedures. Based on the evaluation~~operation of our disclosure controls and procedures as of ~~November 30, 2017,~~the end of the period covered by this Annual Report. Based upon that evaluation and subject to the foregoing, our principal executive officer and principal financial officer concluded that, as of ~~such date,~~the end of the period covered by this Annual Report, the design and operation of our disclosure controls and procedures were not effective ~~at reasonable assurance level~~ due to athe material weakness in our internal control over financial reporting ~~as further~~ described below.

Management’s ~~Annual~~ Report on Internal ~~Controls Over~~Control over Financial Reporting

Our management, under the supervision of the Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting ~~as such term is defined in Exchange Act Rule 13a-15(f). Our internal~~for our company. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed ~~to provide reasonable assurance regarding~~by, or under the ~~reliability~~supervision of, our principal executive and principal financial ~~reporting~~officers and ~~the preparation~~effected by our board of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 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.

~~Our system of internal control over financial reporting is designed~~directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting ~~principles. Because~~principles, and that receipts and expenditures of ~~its inherent limitations,~~our company are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our company’s assets that could have a material effect on the financial statements.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting may not prevent or detect misstatements. This assessment included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation.

We conducted risk assessment on five corporate criteria – Strategic, management, regulatory, IT, operational and financial – resulting in a risk-based management of the company and establishment of a remediation plan based on company risk aversion. This plan is designed to strengthen the effectiveness of our internal controls over financial reporting as of ~~November 30, 2017. Based on~~December 31, 2023. In making this evaluation, ~~which is based on~~our management used the criteria set forth in the Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway ~~Commission (COSO) in Internal Control Integrated Framework (2013), management concluded~~Commission.

Management has determined that we had the following material weakness in ~~internal control over financial reporting described below existed as of November 30, 2017.~~

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The limitation of the Company’s internal control over financial reporting was due to the applied risk-based approach which is indicative of many small companies with limited number of staff in corporate functions implying:

~~Our management believes the weaknesses identified above have not had any material effect on our financial results.~~

During the fiscal year ended November 30, 2017, we continued to expand upon our implementation of a risk management, resource planning and internal control system, which are all intended to strengthen our overall control environment. Management has taken additional steps to address the causes of the above weaknesses and to improve our internal control over financial reporting ~~including the re-design~~as of December 31, 2023:

We did not perform appropriate analyses related to our ~~accounting processes and~~internal control ~~procedures and the identification of gaps in our skills base and the expertise of our staff as required to meet the~~over financial reporting ~~requirements of a public company. In particular, during~~in the first quarter of fiscal year 2017, we retained qualified independent third-party personnel, to conduct a comprehensive review of our internal controls and formalization of our review and approval processes in order. The appointed qualified independent third party assessed the Company’s risk management framework to manage enterprise risk. During the third quarter, the appointed qualified independent third party designed a remediation plan which, among other things, is designed to prevents fraudulent transaction. The risk based approach identified by the Company reflects the awareness of an acceptable level of risk to manage the Company, considering the strategy, resources and regulatory environment.

~~This measure led to an overarching remediation plan and program brief to be followed by a detailed action plan~~accounting for ~~each major risk selected. Subsequently,~~whether it is ~~expected~~probable we will collect substantially all the consideration to ~~lead to an improvement in our internal controls~~ which will enable us to expedite our month-end close process, thereby facilitating the timely preparation of financial reports and to strengthen our segregation of duties at the Company. We are also hired a full time Chief Financial Officer at MaSTherCell in September 2017 and a full-time controller in our Israeli subsidiary. Finally, we are ~~exploring implementing~~entitled for revenue services provided, as well as our estimated credit losses during 2023. As a ~~new initiative to ease and automate data gathering from all affiliated companies (data warehousing) and implement quantitative and qualitative controls.~~

~~We are committed to maintaining~~result, we identified a ~~strong internal control environment, and believe that these remediation efforts will represent significant improvements~~deficiency in ~~our control environment. Our management will continue to monitor and evaluate~~ the ~~relevance of our risk-based approach and the~~operating effectiveness of our internal ~~controls and procedures~~control over financial reporting related to our accounting for revenues, credit losses and the related impacts related to that, which resulted in the restatement of our unaudited condensed consolidated financial statements for the three months ended March 31, 2023, the three and six months ended June 30, 2023 and the three and nine months ended September 30, 2023.

As of December 31, 2023, such weakness has not been remediated. Management’s plans for remediation, which will occur during 2024, include a thorough credit assessment of all new customers, analysis of payment history for existing customers as well as an analysis on expected credit losses by customer.

This Annual Report on Form 10-K does not include an ~~ongoing basis~~attestation report of our registered public accounting firm on internal control over financial reporting because we are a smaller reporting company and ~~is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.~~non-accelerated filer.

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities

Except as ~~implementing new, more efficient systems, consolidating activities, and migrating processes.~~

~~Other than these changes mentioned, during the quarter ended November 30, 2017,~~described above, there were no changes in our internal control over financial reporting that occurred during the fourth quarter of the year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The following table sets forth certain information regarding our each of our current Directors and Executive ~~Officers. The age of each Director and Executive Officer listed below is given~~Officers as of ~~February 28, 2018.~~April 15, 2024.

~~Set forth below are brief accounts of the business experience during the past five years of each of our directors and executive officers of the Company.~~

Vered Caplan ~~- Chairman~~– Chief Executive Officer and Chairperson of the Board of Directors ~~Chief Executive Officer and President~~

Ms. Caplan has ~~been the Chairman~~served as our CEO and Chairperson of the Board of Directors ~~and Chief Executive Officer~~ since August 14, 2014, prior to which she ~~was~~served as Interim President and CEO ~~since~~commencing on December 23, 2013. ~~Since 2008, Ms. Caplan~~She joined our Board of Directors in February 2012. She has ~~been Chief Executive Officer~~26 years of industry experience, previously holding positions as CEO of Kamedis Ltd.from 2009 to 2014, ~~a company focused on utilizing plant extracts for dermatology purposes. From 2004 to 2007, Ms. Caplan was Chief Executive Officer~~CEO of GammaCan International Inc.~~, a company focused on the use of immunoglobulins for treatment of cancer. During the previous five years, Ms. Caplan has been~~ from 2004 to 2007. She also served as a director of the following companies: Opticul Ltd., ~~a company involved with optic based bacteria classification;~~ Inmotion Ltd., ~~a company involved with self-propelled disposable colonoscopies;~~ Nehora Photonics Ltd., ~~a company involved with noninvasive blood monitoring;~~ Ocure Ltd., ~~a company involved with wound management;~~ Eve Medical Ltd., ~~a company involved with hormone therapy for Menopause and PMS;~~ and Biotech Investment Corp.~~, a company involved with prostate cancer diagnostics.~~ Ms. Caplan ~~has~~holds a M.Sc. in biomedical engineering from Tel Aviv University specializing in signal processing; management for engineers from Tel Aviv University specializing in business development; and a B.Sc. in mechanical engineering from the Technion– Israel Institute of Technology specialized in software and cad systems.

We believe that Ms. Caplan’s significant experience relating to our industry and a deep knowledge of our business, based on her many years of involvement with our company, makes her suitable to serve as a director of our company.

~~Neil Reithinger -~~Victor Miller – Chief Financial Officer, Secretary and Treasurer

On December 28, 2023, we appointed Victor Miller as our Chief Financial Officer, Secretary and Treasurer ~~on August 1, 2014.~~effective January 2, 2024. Mr. ~~Reithinger is the Founder~~Miller previously served as Chief Financial Officer and ~~President~~Secretary at Hycor Biomedical LLC. (“HYCOR”), an in vitro allergy diagnostic company, from 2014 to May 2023. Mr. Miller has over 30 years of ~~Eventus Advisory Group, LLC, a private, CFO-services firm incorporated in Arizona, which specializes in capital advisory~~healthcare and ~~SEC compliance for publicly-traded and emerging growth~~finance industry experience, including 14 years leading finance functions at early-stage life science companies. ~~He is also the President of Eventus Consulting, P.C., a registered CPA firm in Arizona. Prior to forming Eventus, Mr. Reithinger was COO & CFO from March~~From 2009 to ~~December~~2014, prior to joining HYCOR, Mr. Miller led the Finance function at Neos Therapeutics, an early-stage specialty pharmaceutical company. From 2000 to 2009, Mr. Miller developed broad healthcare functional experience with roles in Corporate Development, Business Development, Marketing and Strategy while working for Baxter Healthcare and Giles & Associates. From 1996 to 2000, Mr. Miller gained significant transaction experience as an investment banker in London for Bankers Trust and Merrill Lynch. Mr. Miller holds a Bachelor of ~~New Leaf Brands, Inc., a branded beverage company, CEO of Nutritional Specialties, Inc.~~Science in Economics from April 2007 to October 2009, a nationally distributed nutritional supplement company that was acquired by Nutraceutical International, Inc., Chairman, CEO, President and director of Baywood International, Inc. from January 1998 to March 2009, a publicly-traded nutraceutical company and Controller of Baywood International, Inc. from December 1994 to January 1998. Mr. Reithinger earned a B.S. in Accounting from theThe Wharton School, University of ~~Arizona~~Pennsylvania and is a ~~Certified Public Accountant. He is a Member of the American Institute of Certified Public Accountants and the Arizona Society of Certified Public Accountants.~~

Prof. Ferber was appointed Chief Scientific Officer on February 2, 2012. Since 2017, Prof. Ferber has been the Principal Investigator of cell therapy for TMU DiaCure. From 2012 to present, she has been the Chief Scientific Offer of the Company. Prof. Ferber studied biochemistry at the Technion under the supervision of Professor Avram Hershko and Professor Aharon Ciechanover, winners of the Nobel Prize in Chemistry in 2004. Most of the research was conducted in Prof. Ferber’s Endocrine Research Lab. Prof. Ferber received Teva, Lindner, Rubin and Wolfson awards for this research. Prof. Ferber’s research work has been funded over the past 15 years by the JDRF, the Israel Academy of Science foundation (ISF), BIODISC and DCure. Prof. Ferber earned her B.Sc. from Technion-Haifa, a M.Sc. in Biochemistry from Technion-Haifa and a Ph.D. in Medical Sciences from Technion-Haifa. She also holds a Post Doctorate degree in Molecular Biology from Harvard and a degree in Cell Therapy Sciences from UTSW, Dallas,

Dr. Bedoret was appointed General Manager of MaSTherCell on July 6, 2017. Dr. Bedoret joined MaSTherCell in October 2016 as Chief Business and Administration Officer. Prior to joining MaSTherCell, from January 2014 to September 2016, he held the position of Chief Operations Officer at Quality Assistance, a leading European analytical CRO where he was also member of the board of directors. Between September 2011 and January 2014, Dr. Bedoret served as Engagement Manager at McKinsey & Company, focusing on bio-pharmaceutical projects. Through those experiences, he gained a strong expertise in biologicals, FDA and EMA regulations, as well as team management. He holds a degree in Veterinary Medicine, a Ph.D. in Life Sciences from ULg and a post-doctorate degree in Immunology from Harvard Medical School.

Dr. Sidransky ~~was appointed~~has served as a director since his appointment on July 18, 2013. Dr. Sidransky is a renowned oncologist and research scientist named and profiled by TIME magazine in 2001 as one of the top physicians and scientists in America, recognized for his work with early detection of cancer. Since 1994, Dr. Sidransky has been the Director of the Head and Neck Cancer Research Division at Johns Hopkins University School of Medicine’s Department of Otolaryngology and Professor of Oncology, Cellular & Molecular Medicine, Urology, Genetics, and Pathology at the John Hopkins University School of Medicine. Dr. Sidransky is one of the most highly cited researchers in clinical and medical journals in the world in the field of oncology during the past decade, with over ~~460~~600 peer reviewed publications. Dr. Sidransky is a founder of a number of biotechnology companies and holds numerous biotechnology patents. Dr. Sidransky has served as Vice Chairman of the board of directors, and was, until the merger with Eli Lilly, a director of ImClone Systems, Inc., a global biopharmaceutical company committed to advancing oncology care. He is ~~serving, or has served on, the scientific advisory boards of MedImmune, LLC, Roche, Amgen Inc. and Veridex, LLC (a Johnson & Johnson diagnostic company), among others and is~~ currently on the board of Directors of Ascentage Pharma, Galmed and ~~Rosetta Genomics Ltd.~~Champions Oncology. and chairs the board of directors of Advaxis and ~~Champions Oncology, Inc.~~Ayala. Dr. Sidransky served as Director from 2005 until 2008 of the American Association for Cancer Research (AACR). He was the chairperson of AACR International Conferences during the years 2006 and 2007 on Molecular Diagnostics in Cancer Therapeutic Development: Maximizing Opportunities for Personalized Treatment. Dr. Sidransky is the recipient of a number of awards and honors, including the 1997 Sarstedt International Prize from the German Society of Clinical Chemistry, the 1998 Alton Ochsner Award Relating Smoking and Health by the American College of Chest Physicians, and the 2004 Richard and Hinda Rosenthal Award from the American Association of Cancer Research. Dr. Sidransky received his BS in Chemistry from Brandies University and his medical degree from Baylor College of medicine where he also completed his residency in internal medicine. His specialty in Medical Oncology was completed at Johns Hopkins University and Hospital.

We believe Dr. Sidransky is qualified to serve on our Board of Directors because of his education, medical background, experience within the life science industry and his business acumen in the public markets.

Mr. Yachin has served as a director since his appointment on April 2, 2012. Mr. Yachin isserves, since November 2020, as the executive chairman of Xerient Pharma which develops a drug for the treatment of abdominal cancers. He served as the President and CEO of Serpin Pharma, a clinical stage Virginia-based company focused on the development of anti-inflammatory drugs, from April 2013 until October 2020. Prior to that, Mr. Yachin was the CEO of NasVax Ltd., a company focused on the development of improved immunotherapeutics and vaccines. Prior to joining NasVax, Mr. Yachin served as CEO of MultiGene Vascular Systems ~~Ltd.~~Ltd (a.k.a. Vessl), a cell therapy company focused on blood vessels disorders, leading the company through clinical studies in the U.S. and Israel, financial rounds, and a keystone strategic agreement with Teva Pharmaceuticals Industries Ltd. He was CEO and founder of Chiasma Inc., a biotechnology company focused on the oral delivery of macromolecule drugs, where he built the company’s presence in Israel and the U.S., concluded numerous financial rounds, and guided the company’s strategy and operation for over six years. Earlier, he was CEO of Naiot Technological Center Ltd., and provided seed funding and guidance to more than a dozen biomedical startups such as Remon Medical Technologies Ltd., Enzymotec Ltd. and NanoPass Technologies Ltd. He holds a BSc. in Industrial Engineering and Management and an MBA from the Technion – Israel Institute of Technology.

We believe Mr. Yachin is qualified to serve on our Board of Directors because of his education, experience within the life science industry and his business acumen in the public markets.

Mr. Adler ~~was appointed~~has served as a director since his appointment on April 17, 2012. Mr. Adler is the co-founder of a startup incubator, We Group Ltd. In 1999, Mr. Adler co-founded IncrediMail Ltd. and served as its ~~Chief Executive Officer~~CEO until 2008 and President until 2009. ~~In 1999, prior to founding~~After IncrediMail, Mr. Adler consulted Israeli startup companies regarding Internet products, services and technologies. Mr. Adler served as a product manager from 1997 to 1999, and as a software engineer from 1994 to 1997, at Tecnomatix Technologies Ltd., a software company that develops and markets production engineering solutions to complex automated manufacturing lines that fill the gap between product design and production, and which was acquired by UGS Corp. in April 2005. In 1993, Mr. Adler held a software engineer position at Intel Israel Ltd. He has a B.A. in computer sciences and economics from Tel Aviv University.

We believe Mr. Adler is qualified to serve on our Board of Directors because of his education, success with early-stage enterprises and his business acumen in the public markets.

Mr. ~~Bultot was appointed~~Nanda has served as a director on March 2, 2015. Mr. Bultot is a technology entrepreneur with a 10-year track record in bioprocessing. From April 2014 to July 2017, Mr. Bultot was the Chief Executive Officer of MaSTherCell, a company he co-founded in 2011. Since January 2013, Mr. Bultot is the Founder and CEO of Univercells SA, a Belgian-based company focused on the development of the implementation of disruptive manufacturing science in order to make biologics accessible and affordable. Prior to founding MaSTherCell and Univercells, Mr. Bultot founded Artelis in 2005 withsince his partner, José Castillo, a Belgian biotech company that specialized in the development of disposable bioreactors for the vaccine and monoclonal antibodies industry and for cell therapy applications. Artelis was sold to ATMI in November 2010, which was subsequently acquired by Pall Corporation (NYSE: PLL) in February 2014. From 2006 until 2009, Mr. Bultot was a director with Ascencio, a Euronext-quoted real estate company where he was the head of the Audit Committee. Mr. Bultot founded Kitozyme in 2000, a company developing vegetal chitosan-based applications for the nutrition, wine-making, cosmetics and medical device industry where he developed the entire manufacturing chain, led the strategy and the operations and concluded numerous co-development agreements and financial rounds. Between 1994 and 1999, Mr. Bultot served as investment manager and COO of Synerfi, a private equity firm affiliated with Generale de Banque, a major Belgian banking institution. In these positions, he concluded several funding rounds and exited deals for start-ups and mature companies. Mr. Bultot holds a master’s degree in law from UCL, Belgium and an executive master’s degree in business administration from Solvay Business School, Belgium and in tax management from ICHEC in Belgium. Mr. Bultot followed the advanced management program at INSEAD in 1997 and several courses in tech entrepreneurship at MIT from 2009 to 2011. Mr. Bultot is also serving on the Board of Directors of Ovizio, a company specialized in holographic microscopy and of Vivaldi Biosciences, a company developing live-attenuated influenza vaccines for pediatric and elderly segments.

We believe Mr. Bultot is qualified to serve on our Board of Directors because of his success with early-stage enterprises, and knowledge and leadership skills for his role as a former Chief Executive Officer of MaSTherCell, our subsidiary.

~~Mr. Nanda was appointed a director~~appointment on February 22, 2017. Since ~~1990,~~1998, Mr. Nanda has been the Managing Director of Innovations Group, one of the largest outsourcing companies in the financial sector that employs close to 14,000 people working across various financial sectors. ~~Prior to that, from~~Since 1992, Mr. Nanda has served as the Managing Partner of Capstone Insurance Brokers LLC and, since 2009, has served as Managing Partner of Dive Tech Marine Engineering Services L.L.C. From 1991 to 1994, Mr. Nanda held the position of Asst. Manager Corporate Banking at Emirates Banking Group where he was involved in establishing ~~relationship~~relationships with business houses owned by UAE nationals and expatriates in order to set up banking limits and also where he managed portfolios of USD $26 billion. Mr. Nanda holds a Chartered Accountancy from the Institute of Chartered Accountants from India.

We believe that Mr. Nanda is qualified to serve on our Board of Directors because of his business experience and strategic understanding of advancing the valuation of companies in emerging industries.

Pursuant to an agreement entered into between us and Image Securities fzc. (“Image”), for so long as Image’s ownership of our company is 10% or greater, it was granted the right to nominate a director to our Board of Directors. Mr. Nanda was nominated for a directorship at the 2017 annual meeting in compliance with our contractual undertakings. Although Image is no longer a beneficial owner of 10% or greater of our common stock, Mr. Nanda remains as a member of our Board of Directors.

Mr. Philips has served as a director since his appointment on January 9, 2020. Since November 2020, Mr. Philips has been Chief Executive Officer of Polyplus, a leading Biotech supplier of transfection reagents for cell & gene therapy as well as the research life sciences market. He is also chairmen of the Board of PLL Therapeutics, a drug company based in France that has developed a diagnostic platform technology for neurodegenerative diseases in combination with a therapy to cure neurodegenerative diseases such as ALS and Parkinson’s.

Prior to that, Mr. Philips acted as VP/GM for Danaher Pall Biotech business with full P&L responsibility for a $1.3 billion business unit. Mr. Philips joined Pall in February 2014, as part of the Pall acquisition of ATMI Life Sciences, and was appointed to Vice President and General Manager to lead the Single-Use Technologies BU. In this role he was responsible for leading and executing an aggressive investment and growth strategy.

Mr. Philips joined ATMI in 1999 with ATMI’s acquisition of MST Analytics, Inc., serving as European Sales Manager for ATMI Analytical Systems. In 2004, he was appointed to General Manager of ATMI Packaging, a role he held through 2010 when he was promoted to the position of Senior Vice President and General Manager, ATMI Life Sciences. In that role, he was responsible for developing and executing all business strategies, including the introduction of new products and service solutions for the Life Sciences industry. Mr. Philips also held in the past several board member positions in the life sciences industry with Clean Biologics, Austar Life Sciences (China), Disposable Lab (France) and Artelis (Belgium).

We believe that Mr. Philips is qualified to serve on our Board of Directors because of his business experience and strategic understanding of advancing the valuation of companies in emerging industries.

There are no family relationships between any of the above executive officers or directors or any other person nominated or chosen to become an executive officer or a director. Pursuant to an agreement entered into between the Company and Image Securities fzc. (“Image”), so long as Image’s ownership of the company is 10% or greater, it was granted the right to nominate a director to the Company’s Board of Directors. Mr. Nanda was nominated for a directorship at the 2017 annual meeting in compliance with our contractual undertakings.

Our Board of Directors currently consists of six ~~directors.~~(6) members. All directors hold office until the next annual meeting of stockholders. At each annual meeting of stockholders, the successors to directors whose terms then expire are elected to serve from the time of election and qualification until the next annual meeting following election.

Management has been delegated the responsibility for meeting defined corporate objectives, implementing approved strategic and operating plans, carrying on our business in the ordinary course, managing cash flow, evaluating new business opportunities, recruiting staff and complying with applicable regulatory requirements. The Board of Directors exercises its supervision over management by reviewing and approving long-term strategic, business and capital plans, material contracts and business transactions, and all debt and equity financing transactions and stock issuances.

Our Board of Directors is comprised of a majority of independent directors. In determining director independence, we use the definition of independence in Rule 5605(a)(2) of the listing standards of The Nasdaq Stock Market.

The Board has concluded that each of Dr. Sidransky, and Messrs. Yachin, Adler, Philips and Nanda is “independent” based on the listing standards of the Nasdaq Stock Market, having concluded that any relationship between such director and our company, in its opinion, does not interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Our Board of Directors has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, with each comprised of independent ~~directors. Our Board~~directors in accordance with the rules of ~~Directors has~~The Nasdaq Stock Market and applicable federal securities laws and regulations. The members of the Audit Committee are Dr. Sidransky and Messrs. Yachin and Philips. The members of the Compensation Committee are Dr. Sidransky and Messrs. Adler and Yachin. The members of the Nominating and Corporate Governance Committee are Messrs. Nanda, Adler and Yachin. We have also established a ~~Finance~~Research and Development Committee. The members of the Research and Development Committee are Mr. Yachin and Dr. Sidransky.

Each committee operates under a written charter that has been approved by our Board of Directors. Copies of our committee charters are available on the investor relations section of our website, which is located at http://www.orgenesis.com.

The ~~members~~Audit Committee (a) assists the Board of Directors in fulfilling its oversight of: (i) the quality and integrity of our financial statements; (ii) our compliance with legal and regulatory requirements relating to our financial statements and related disclosures; (iii) the qualifications and independence of our independent auditors; and (iv) the performance of our independent auditors; and (b) prepares any reports that the rules of the SEC require be included in our proxy statement for our annual meeting.

The Audit Committee ~~are Messrs.~~held 4 meetings in 2023. In addition, the Audit Committee reviewed and approved various corporate items by way of written consent during the year 2023. The Board has determined that each member of the Audit Committee is an independent director in accordance with the rules of The Nasdaq Stock Market and applicable federal securities laws and regulations. In addition, the Board has determined that Dr. Sidransky ~~Adler~~is an “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation S-K and ~~Yachin. Mr. Yachin~~has designated him to fill that role. See “Directors, Executive Officers and Corporate Governance – Directors” above for descriptions of the relevant education and experience of each member of the Audit Committee.

At no time since the commencement of our most recently completed fiscal year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board of Directors.

The Audit Committee is ~~also~~responsible for the oversight of our financial reporting process on behalf of the Board of Directors and such other matters as specified in the Audit Committee’s charter or as directed by the Board of Directors. Our Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged by us for the purpose of preparing or issuing an ~~“Audit~~audit report or performing other audit, review or attest services for us (or to nominate the independent registered public accounting firm for stockholder approval), and each such registered public accounting firm must report directly to the Audit Committee. Our Audit Committee ~~financial expert,”~~must approve in advance all audit, review and attest services and all non-audit services (including, in each case, the engagement and terms thereof) to be performed by our independent auditors, in accordance with applicable laws, rules and regulations.

The Compensation Committee (i) assists the Board of Directors in discharging its responsibilities with respect to compensation of our executive officers and directors, (ii) evaluates the performance of our executive officers, and (iii) administers our stock and incentive compensation plans and recommends changes in such plans to the Board as ~~defined~~needed.

The Compensation Committee held 4 meetings in 2023. In addition, the Compensation Committee reviewed and approved various corporate items by way of written consent during the year ended December 31, 2023. The Board of Directors has determined that each member of the Compensation Committee is an independent director in accordance with the rules of The Nasdaq Stock Market and applicable ~~SEC rules.~~federal securities laws and regulations.

The Nominating and Corporate Governance Committee assists the Board in (i) identifying qualified individuals to become directors, (ii) determining the composition of the Board and its committees, (iii) developing succession plans for executive officers, (iv) monitoring a process to assess Board effectiveness, and (v) developing and implementing our corporate governance procedures and policies.

The Nominating and Corporate Governance Committee held 2 meetings in 2023. In addition, the Nominating and Corporate Governance Committee reviewed and approved various corporate items by way of written consent during the year ended December 31, 2023. The Board has determined that each member of the Nominating and Corporate Governance Committee is an independent director in accordance with the rules of The Nasdaq Stock Market and applicable federal securities laws and regulations.

The Research and Development Committee assists the Board in fulfilling the Board’s responsibilities to oversee our research and development programs, and strategies.

The Research and Development Committee was established in January 2021. The Research and Development approved various corporate items by way of written consent during the year ended December 31, 2023.

DELINQUENT SECTION 16(a) ~~BENEFICIAL OWNERSHIP REPORTING COMPLIANCE~~REPORTS

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our officers and directors ~~of the Company~~ and persons who beneficially own more than ten percent (10%) of the Common Stock outstanding to file initial statements of beneficial ownership of Common Stock (Form 3) and statements of changes in beneficial ownership of Common Stock (Forms 4 or 5) with the SEC. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish ~~the Company~~us with copies of all such forms they file.

Our records reflect that all reports which were required to be filed pursuant to Section 16(a) of the ~~copies~~Securities Exchange Act of ~~such forms received by the Company with respect to 2017, or written representations from certain reporting persons, each of Ashish Nanda and Denis Bedoret did not~~1934, as amended, were filed on a timely ~~file a Form 3.~~basis.

Our Board of Directors has adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Copies of our corporate code of ~~business~~ conduct and ethics are available, without charge, upon request in writing to Orgenesis Inc., 20271 Goldenrod Lane, Germantown, MD, 20876, Attn: Secretary and are posted on the investor relations section of our website, which is located at www.orgenesis.com. The inclusion of our website address in this ~~prospectus~~Annual Report on Form 10-K does not include or incorporate by reference the information on our website into this ~~prospectus.~~Annual Report on Form 10-K. We also intend to disclose any amendments to the Corporate Code of ~~Business~~ Conduct and Ethics, or any waivers of its requirements, on our website.

The following table ~~sets forth information~~shows the total compensation paid or accrued during the years ended December 31, 2023 and 2022. Our named executive officers consist of (1) our Chief Executive Officer, (2) our former Chief Financial Officer and (3) our former Chief Development Officer. As of December 31, 2023, there were no other executive officers who earned more than $100,000 during the year ended December 31, 2023 and were serving as executive officers as of such date. The table includes two additional executive officers who would have been among the three most highly compensated executive officers except for the ~~last two completed fiscal years concerning compensation~~fact that they were not serving as executive officers of the ~~officers identified below (the “Named Executive Officers”):~~Company as of the end of 2023.

The following table provides information regarding each component of compensation for ~~2017~~the years ended December 31, 2023 and ~~2016~~2022 included in the All Other Compensation column in the Summary Compensation Table above. Represents amounts paid in New Israeli Shekels (NIS) or Swiss Franks and converted at average exchange rates for the year.

The following table summarizes the outstanding equity awards held by each named executive officer of our company as of ~~November 30, 2017.~~December 31, 2023.

The following table shows information regarding exercises of options to purchase our common stock and vesting of stock awards held by ~~our~~each executive officer named ~~executive officers~~in the Summary Compensation Table during ~~our fiscal~~the year ended ~~November 30, 2017.~~December 31, 2023.

(1) Amounts shown in this column do not necessarily represent actual value realized from the sale of the shares acquired upon exercise of options because in many cases the shares are not sold on exercise but continue to be held by the executive officer exercising the option. The amounts shown represent the difference between the option exercise price and the market price on the date of exercise, which is the amount that would have been realized if the shares had been sold immediately upon exercise.

~~Employment/Consulting~~Narrative Disclosure to Summary Compensation Table and Employment Agreements

On August 14, 2014, our Board of Directors confirmed that Ms. Vered Caplan, who ~~has~~had served as our President and Chief Executive Officer on an interim basis since December 23, 2013, was appointed as our President and Chief Executive Officer. In connection with her appointment as our President and Chief Executive Officer, on August 22, 2014, our wholly-owned Israeli Subsidiary, Orgenesis Ltd., entered into a Personal Employment Agreement with Ms. Caplan (the “Caplan Employment Agreement”). The Caplan Employment Agreement replaces a previous employment agreement with Ms. Caplan dated April 1, 2012 pursuant to which she had served as Vice President.

On ~~March 30, 2017,~~November 19, 2020, we and Ms. Caplan entered into an executive directorship agreement, effective as of October 1, 2020 (the “Executive Directorship Agreement”), that superseded and replaced a previous employment agreement ~~replacing the Caplan Employment Agreement~~ (the ~~“Amended Caplan Employment~~“Prior Agreement”). ~~Under~~Pursuant to the Amended Caplan Employment Agreement, which took effect April 1, 2017, Ms. Caplan's annual salary continues at $160,000 per annum, subject to adjustment to $250,000 per annum upon the listing of the Company’s securities on an Exchange. Ms. Caplan is also entitled to an annual cash bonus with a target of 25% of base salary, provided that the actual amount of such bonus may be greater or less than the target amount. Ms. Caplan is entitled to a signing bonus of $150,000 upon execution of the Amended Caplan Employment Agreement. Ms. Caplan continues to have the social benefits described above. Under the Amended Caplan EmploymentExecutive Directorship Agreement, Ms. Caplan ~~is entitled~~will continue to ~~the following social benefits typically provided to Israeli employees, computed on the basis of her base salary (i) Manager's Insurance under Israeli law pursuant to which~~serve the Company ~~contributes between 6.5%~~as its Chairperson of the Board of Directors (the “Board”) and ~~7.5% (and Ms. Caplan contributes~~shall receive in consideration for her serving as Chairperson of the Board an ~~additional 6%) (ii) severance pay under Israeli law pursuant to which~~annual regular Board fee in the amount of $75,000 payable by the Company ~~contributes 8 1/3% (iii) Education fund pursuant to which the Company continues to contribute $3,677 a year.~~in equal quarterly installments in advance. In addition, Ms. Caplan ~~is also entitled to paid annual vacation days, annual recreation allowance, sick leave~~may be eligible for non-recurring special Board fees as reviewed and ~~expenses reimbursement.~~approved by the Compensation Committee of the Board (the “Compensation Committee”) and then reviewed and ratified by the Board. In addition, ~~we provide Ms. Caplan with a leased company car and a mobile phone.~~

~~Either we or~~ Ms. Caplan may ~~terminate~~be granted option awards from time to time at the ~~employment~~discretion of the Compensation Committee.

Ms. Caplan’s position as Chairperson of the Board under the ~~Amended~~Executive Directorship Agreement may be terminated for any reason by either Ms. Caplan ~~Employment Agreement~~or the Company upon ~~six months~~90 days prior written ~~notice.~~notice (the “Notice Period”), provided that the Company may terminate such appointment as Chairperson at any time during the Notice Period subject to certain conditions. Such termination as Chairperson of the Board will be deemed a termination even if Ms. Caplan remains as a regular director of the Board. Upon termination by usthe Company of Ms. Caplan’s employment ~~without~~other than for cause ~~(as defined therein)~~ or by Ms. Caplan for any reason whatsoever, in addition to any ~~accrued but unpaid base salary and expense reimbursement,~~Accrued Obligations (as defined therein) she shall be entitled to receive ~~an amount~~a lump sum payment equal to ~~12 months~~the sum of ~~base salary at~~(i) the ~~highest annualized rate in effect at any time before~~annual regular Board fee (the “Board Fee”) and (ii) the ~~employment terminates payable in substantially equal installments. Upon~~greater of actual or target annual performance bonus to which she may have been entitled to as of the termination ~~of by us~~ date (in each case, less all customary and required taxes and related deductions).

Ms. Caplan’s ~~employment without cause~~position under the Executive Directorship Agreement may be terminated in the event of a Change of Control (as defined therein) by the Company other than for cause or by Ms. Caplan for any reason whatsoever. In the event of a Change of Control and if, within one year following such Change of Control, employment under the Executive Directorship Agreement is terminated by the Company other than for cause or by Ms. Caplan for any reason whatsoever, in addition to any Accrued Obligations, she shall be entitled to receive a lump sum payment equal to one and a half times the sum of (i) the Board Fee and (ii) the target annual performance remuneration to which she may have been entitled as of the termination date (in each case, less all customary and required taxes and related deductions).

In addition, on November 19, 2020, Orgenesis Services Sàrl, a Swiss corporation and wholly-owned, direct subsidiary of the Company (“Orgenesis Services”), and Ms. Caplan entered into a personal employment agreement (the “Swiss Employment Agreement” and together with the Executive Directorship Agreement, the “Agreements”), pursuant to which Ms. Caplan will serve as Chief Executive Officer, President and Chairperson of the Board of Directors of Orgenesis Services and will be a material provider of services to the Company pursuant to a services agreement between the Company and Orgenesis Services. The Swiss Employment Agreement provides that Ms. Caplan is entitled to a monthly base salary of CHF 13,345.05 (equivalent to $14,583 based on the current exchange rate at signing), and an annual representation fee of CHF 24,000 (equivalent to $26,226 based on the current exchange rate at signing), payable in monthly installments of CHF 2,000. Ms. Caplan is eligible to receive a bonus at the absolute discretion of Orgenesis Services and its compensation committee. Ms. Caplan may also be granted option awards from time to time, as per the recommendation of the compensation committee of Orgenesis Services as reviewed and approved by the Compensation Committee. Under the Swiss Employment Agreement, Ms. Caplan is entitled to be paid annual vacation days, monthly travel allowance, sick leave, expenses reimbursement and a mobile phone. The Swiss Employment Agreement had an effective date as of October 1, 2020.

Employment under the Swiss Employment Agreement may be terminated for any reason by Ms. Caplan or by Orgenesis Services other than for just cause (as defined therein) upon six months prior written notice or by Orgenesis Services other than for just cause in the event of a Change of Control (as defined therein), of the Company upon at least 12 months prior written notice. Upon termination by Orgenesis Services of Ms. Caplan’s employment without just cause or by Ms. Caplan for any reason whatsoever, in addition to any ~~accrued but unpaid base salary and expense reimbursement,~~Accrued Obligations (as defined therein), she shall be entitled to receive ~~an amount~~a lump sum payment equal to ~~18 months~~the sum of (i) her Base Salary (as defined therein) at the rate in effect as of the termination date and (ii) the greater of actual or target annual performance bonus to which she may have been entitled to for the year in which employment terminates (in each case, less all customary and required taxes and employment-related deductions). In the event of a Change of Control and if, within one year following such Change of Control, employment is terminated by Orgenesis Services other than for cause or by Ms. Caplan for any reason whatsoever, in addition to any Accrued Obligations she shall be entitled to receive a lump sum payment equal to one and a half times the sum of (i) her Base Salary and (ii) the target annual ~~base salary at~~performance bonus to which she may have been entitled to for the ~~highest annualized rate~~year in ~~effect at any time before the~~which employment terminates ~~payable in substantially equal installments.~~(in each case, less all customary and required taxes and employment-related deductions).

The Swiss Employment Agreement pursuant to which Ms. Caplan is entitled to a grant under the 2017 of options (the “Initial Option”) to purchase 1,000,000 shares of the Company’s common stock at a per share exercise price equal to the Fair Market Value (as defined in the 2017 Plan) of the Company’s common stock on the date of grant. The amendment further provides that beginning in fiscal 2018, subject to approval by the compensation committee, Ms. Caplan is entitled to an additional option (the “Additional Option”; together with the Initial Option, the “Options”) under the 2017 Plan for up to 3,000,000 shares of common stock (on a pre-split basis) of the Company to be awarded in such amounts per fiscal year as shall be consistent with the Plan, in each case at a per share exercise price equal to the Fair Market Value (as defined in the Plan) of the Company’s common stock on the date of grant.

The Initial Option shall vest in two equal tranches upon the six and twelve month anniversary of the grant date. The Additional Option shall vest in tranches of 500,000 shares of common stock (on a pre-split basis) every six months from the date of grant, provided that Ms. Caplan remains employed by Company on the vesting date; provided, further, however, that the Options shall vest fully immediately prior to a Change of Control (as defined in the 2017 Plan), or as otherwise provided for in the 2017 Plan.

~~The employment agreement also contains restrictive covenants~~ for customary protections of ~~the Company's~~Orgenesis’ confidential information and intellectual property.

Ms. Caplan received an aggregate salary and board fee of $259,029 during 2023. As of December 31, 2023, the $150,000 chairperson fee for 2022 and 2023 was unpaid, but accrued, per agreement by Ms. Caplan. In addition, in 2022 Ms. Caplan was awarded options to purchase 85,000 shares of common stock.

Ms. Caplan received reimbursement for automobile and communication related expenses in the amount of $2,627 in 2023 and $2,536 in 2022. In addition, the Company contributed to savings, health, severance, pension, disability and insurance plans generally provided in Switzerland, including health, education, managerial insurance funds, and redeemed vacation pay in an amount equivalent to $79,728 in 2023 and $89,564 in 2022. These amounts represent Swiss severance fund payments, managerial insurance funds, disability insurance, supplemental education fund contribution and social securities.

Mr. ~~Reithinger~~Maltz was appointed Chief Financial Officer, Treasurer and Secretary on ~~August~~September 1, ~~2014.~~2023. Pursuant to Mr. ~~Reithinger’s~~Maltz’s personal employment agreement ~~stipulates~~(the “Employment Agreement”) with the Company he is entitled to receive an annual base salary of $335,000 and an annual cash bonus of up to 40% of his then-current base salary (the “Annual Performance Bonus”). The Annual Performance Bonus, if any, will be based upon the achievement of certain corporate and individual performance objectives. Additionally, pursuant to the Employment Agreement Mr. Maltz was granted 200,000 stock options (the “Stock Award”). The Stock Award will vest quarterly from the grant date over four years subject to Mr. Maltz’s continued employment through each such vesting date. Mr. Maltz resigned his position at the Company effective December 31, 2023. Mr. Maltz base salary of $111,667 earned during 2023 was paid to him as per his employment and we have no further obligations due to him.

Ms. Assa-Kunik was appointed Chief Development Officer in December 2021. According to the terms of Ms. Assa-Kunik’s Employment Agreement, Ms. Assa Kunik is entitled to a monthly salary of 45 thousand New Israeli Shekels, customary contributions to a pension and training fund, participation in cellphone expenses, and annual leave of 24 days. In 2022, Ms. Assa-Kunik was awarded options to purchase 15,000 shares of common stock. Ms. Assa Kunik resigned her position at the Company effective August 2023.

Ms. Assa-Kunik received an aggregate salary of ~~$1,500; payment~~$126,933 during 2023 and $162,316 in 2022. In addition, in 2022 Ms. Assa-Kunik was awarded options to purchase 15,000 shares of ~~an annual bonus as determined by the Company in its sole discretion, participation~~common stock.

Ms. Assa-Kunik received reimbursement for automobile and communication related expenses in the ~~Company’s pension plan; grant~~amount of ~~stock options as determined by the Company;~~$377 in 2023 and ~~reimbursement of expenses. As of November 30, 2017, Mr. Reithinger is owed $22,610~~$436 in ~~accrued salary.~~2022. In addition, on August 1, 2014, the Company entered into a financial consulting agreement with Eventus Consulting, P.C., an Arizona professional corporation, of which Mr. Reithinger is the sole shareholder, (“Eventus”) pursuant to which Eventus has agreed to provide financial consulting services to the Company. In consideration for Eventus’s services, the Company agreed to pay Eventus according to its standard hourly rate structure. The term of the consulting agreement was for a period of one year from August 1, 2014 and automatically renews for additional one-year periods upon the expiration of the term unless otherwise terminated. Eventus is owned and controlled by Neil Reithinger. As of November 30, 2017, Eventus was owed $89,203 for accrued and unpaid services under the financial consulting agreement.

Our wholly-owned Israeli Subsidiary, Orgenesis Ltd., entered into a Personal Employment Agreement with Prof. Ferber February 2, 2012 to serve as Chief Scientific Officer (the “Ferber Employment Agreement”) on a part time basis. Under the Ferber Employment Agreement, Prof. Ferber earned an annual salary of the current New Israeli Shekel equivalent of $232,000 since September, 2013. However, in order to reduce operating expenses and conserve cash, Prof. Ferber has been deferring a part of her salary and social benefits due thereon until such time as our cash position permits payment of salary in full without interfering with our ability to pursue our plan of operations, and, as of November 30, 2017, such deferred amount totaled an aggregate of $582,371. Under the Ferber Employment Agreement, Prof. Ferber is entitled to the following social benefits out of her base salary typically provided to Israeli employees, (i) Manager’s Insurance under Israeli law pursuant to which the Company contributes 2.5% (and Prof. Ferber contributes an additional 3.5% ) and in addition, the Company ~~contributes 1.25 % towards loss of working capacity~~contributed to savings, health, severance, pension, disability and insurance plans generally provided in Israel, including health, education, managerial insurance funds, and redeemed vacation pay in an amount equivalent to $18,313 in 2023 and $44,031 in 2022. These amounts represent Israeli severance fund payments, managerial insurance funds, disability insurance, (ii) pension plan to which the Company contributes 3.75% (and Prof. Ferber contributes an additional 3.5% ) or (ii) Severance pay under Israeli law pursuant to which the Company contributes 8 1/3% (iii) Educationsupplemental education fund pursuant to which the Company contributes 7.5 % (with Prof. Farber contributing an additional 2.5%) . In addition, Prof. Ferber is also entitled to paid annual vacation days, annual recreation allowance, sick leavecontribution and ~~expenses reimbursement. In addition, we provide Prof. Ferber with a mobile phone.~~social securities.

The Ferber Employment Agreement does not specify a stated term and either we or Ms. Ferber are entitled to terminate Prof. Ferber’s employment upon four months’ notice other than in the case of a termination for cause. The Ferber Employment contains customary provisions regarding confidentiality of information, non-competition and assignment of inventions.

Effective October 24, 2017, our subsidiary, MaSTherCell, entered into a management agreement with BM&C SPRL/BVBA, a Belgian company owned by Denis Bedoret, for certain services to be performed by Dr. Bedoret on an exclusive and full-time basis (the “Bedoret Agreement”). The agreement appoints Dr. Bedoret as General Manager of MaSTherCell, requires him to work 220 days annually and stipulates compensation based on revenue with (i) a daily rate of Euro 800 until such time that MaSTherCell’s annual revenue reaches Euro 10 million, (ii) a daily rate of Euro 850 until such time that MaSTherCell’s annual revenue reaches Euro 15 million and (iii) a daily rate of Euro 900 until such time that MaSTherCell’s annual revenue exceeds Euro 15 million. Dr. Bedoret is also entitled to expense reimbursement and a bonus equivalent to up 15% of the annual fees approved by MaSTherCell’s Board of Directors subject to goals and achievements to be agreed by the parties. Dr. Bedoret is also entitled to participation in Orgenesis’s equity incentive plan after six months after the effective date. The Bedoret Agreement also contains customary termination clauses.

Potential Payments upon Change of Control or Termination following a Change of Control

Our employment agreements with our named executive officers provide incremental compensation in the event of termination, as described herein. Generally, we currently do not provide any severance specifically upon a change in control nor do we provide for accelerated vesting upon change in control. Termination of employment also impacts outstanding stock options.above.

Due to the factors that may affect the amount of any benefits provided upon the events described below, any actual amounts paid or payable may be different than those shown in this table. Factors that could affect these amounts include the basis for the termination, the date the termination event occurs, the base salary of an executive on the date of termination of employment and the price of our common stock when the termination event occurs.

The following table sets forth the compensation that would have been received by each of ~~the Company’s~~our executive officers had they been terminated as of ~~November 30, 2017.~~December 31, 2023.

The following table sets forth for each non-employee director ~~certain information concerning his compensation for~~that served as a director during the year ended ~~November 30, 2017:~~December 31, 2023:

All directors receive reimbursement for reasonable out of pocket expenses in attending Board of Directors meetings and for participating in our business.

On February 2, 2012, we entered into a compensation agreement with Ms. Vered Caplan (the “Caplan Compensation Agreement”). Pursuant to the Caplan Compensation Agreement, Ms. Caplan will serve as a director of our company for a gross salary of NIS (Israeli Shekel) 10,000 per month, which is approximately $2,689.

On April 2, 2012, we entered into an agreement with Guy Yachin to serve as a member of our Board of Directors for a consideration of $2,500 per month and an additional payment for every Board of Directors’ meeting at the rate of $300 for the first hour of attendance and $200 for each additional hour or portion of an hour.

On April 17, 2012, we entered into an agreement with Yaron Adler to serve as a member of our Board of Directors. In consideration for Dr. Sidransky’s services, we pay for his attendance at Board of Directors’ meetings at the rate of $300 for the first hour of attendance and $200 for each additional hour or portion of an hour.

On July 17, 2013 we entered into an agreement with Dr. David Sidransky to serve as a member of our Board of Directors. In consideration for Dr. Sidransky’s services, we pay for his attendance at Board of Directors’ meetings at the rate of $300 for the first hour of attendance and $200 for each additional hour or portion of an hour.

On June 18, 2015, we entered into an agreement with Hugues Bultot to serve as a member of our Board of Directors. In consideration for Mr. Bultot’s services, we will pay for his attendance at Board of Directors’ meetings at the rate of $300 for the first hour of attendance and $200 for each additional hour or portion of an hour.

In January 2021, the Board of Directors adopted aan updated compensation policy for non-employee directors which ~~is intended to replace~~replaced the previous non-employee director compensation terms, ~~discussed above. By its terms, the policy becomes~~and which became effective ~~when (and if) the Company uplists its securities to a National Exchange in the United States.~~January 2021. Under the ~~newly adopted~~ policy, each director is to receive an annual cash compensation of ~~$30,000~~$40,000 and the Chairman ~~and Vice Chairman~~or lead director is paid an additional ~~$15,000~~$20,000 per annum. Each committee member will be paid an additional ~~$7,500~~$10,000 per annum and ~~each~~the committee chairman of the Audit and Research and Development committees is to receive $20,000 per annum while the chairman of the other committees is to receive $15,000 per annum. Cash compensation will be made on a quarterly basis.

All newly appointed directors also receive options to purchase up to 6,250 shares of ~~the Company’s~~our common stock. All directors are entitled onto an annual bonus of options for 12,500 shares and each committee member is an entitled to a further option to purchase up to 1,250 shares of common stock and each committee chairperson to options for an additional ~~2,083~~2,100 shares of common stock. In addition, the Chairman and Vice Chairman shall be granted an option to purchase 4,200 shares of our common stock. In all cases, the options are granted at a per share exercise price equal to the closing price of ~~the Company’s~~our publicly traded stock on the date of grant and the vesting schedule is determined by the compensation committee at the time of grant. All of the foregoing share amounts have been adjusted to post-split amounts. Once the new policy becomes effective, such policy will replace the compensation currently paid to the directors and non –employee directors will no longer receive any payment on respect of service on the Board of Directors.

None of our executive officers has served as a member of the Board of Directors, or as a member of the compensation or similar committee, of any entity that has one or more executive officers who served on our Board of Directors or Compensation Committee during the ~~fiscal~~ year ended ~~November 30, 2017.~~December 31, 2023.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth ~~as of February 27, 2018,~~certain information with respect to the ~~number of shares~~beneficial ownership of our common stock ~~owned by (i) each person who is known by us to own~~as of ~~record or beneficially five percent (5%) or more of our outstanding shares, (ii) all five percent (5%) or greater shareholders as a group, (iii)~~April 15, 2024 for (a) the named executive officers, (b) each of our directors, ~~(iv) each~~(c) all of our ~~executive officers and (v) all of our~~current directors and executive officers as a ~~group. Unless otherwise indicated,~~group and (d) each stockholder known by us to own beneficially more than 5% of our common stock. Beneficial ownership is determined in accordance with the rules of the ~~persons listed below has~~SEC and includes voting or investment power with respect to the securities. We deem shares of common stock that may be acquired by an individual or group within 60 days of April 15, 2024 pursuant to the exercise of options or warrants to be outstanding for the purpose of computing the percentage ownership of such individual or group but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Except as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with respect to ~~the~~all shares of ~~our~~ common stock shown to be beneficially ~~owned. The address~~owned by them based on information provided to us by these stockholders. Percentage of ~~our directors and officers~~ownership is ~~c/o Orgenesis Inc., at 20271 Goldenrod Lane, Germantown, MD 20876.~~based on 34,338,782 shares of common stock outstanding on April 15, 2024.

The following table summarizes certain information regarding our equity compensation plans as of ~~November 30, 2017:~~December 31, 2023:

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND ~~DIRECTORS~~DIRECTOR INDEPENDENCE

Except as set out below, as of ~~November 30, 2017,~~December 31, 2023, there have been no transactions, or currently proposed transactions, in which we were or are to be a participant and the amount involved exceeds 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 any of the following persons had or will have a direct or indirect material interest:

On September 15, 2014, the Company received a loan in the principal amount of $100,000 from Yaron Adler Investments (1999) Ltd., an entity of which Mr. Yaron Adler, one of the Company’s non-employee director, is the sole shareholder. The loan, with an original interest rate of 6% per annum, was repayable on or before March 15, 2015. The Loan currently bears a default interest rate of 24% per annum and, as of November 30, 2017, the outstanding balance on the note was $166,581.

In January 2017, the Company entered into definitive agreements with Image Securities fzc. (“Image”) for the private placement of 2,564,115 units of the Company’s securities for aggregate subscription proceeds to the Company of $16 million at $6.24 price per unit. Each unit is comprised of one share of the Company’s Common Stock and a warrant, exercisable over a three-years period from the date of issuance, to purchase one additional share of Common Stock at a per share exercise price of $6.24. The subscription proceeds are payable on a periodic basis through August 2018. Each periodic payment of subscription proceeds will be evidenced by the Company’s standard securities subscription agreement. During the year ended November 30, 2017, Image remitted to the Company $4.5 million, in consideration of which, the investor received 721,160 shares of the Company’s Common Stock and three-year warrants to purchase up to an additional 721,160 shares of the Company’s Common Stock at a per share exercise price of $6.24. Pursuant to an agreement entered into between the Company and Image, so long as Image’s ownership of the company is 10% or greater, it is entitled to nominate a director to the Company’s Board of Directors. Mr. Nanda was nominated for a directorship at the 2017 annual meeting in compliance with our contractual undertakings.

Pursuant to our Audit Committee charter adopted in March 2017, the Audit Committee is responsible for reviewing and approving, prior to our entry into any such transaction, all transactions in which we are a participant and in which any parties related to us have or will have a direct or indirect material interest.

For information regarding compensation for our named executive officers and current directors, see “Executive Compensation.”

See “Directors, Executive Officers and Corporate Governance – Director Independence” and “Directors, Executive Officers and Corporate Governance – Board of Directors has determined that four of our six directors are independent directors within the meaning of the independence requirements of the NASDAQ Listing Rules. The independent directors are Messrs. Adler, Sidransky, Yachin and NandaCommittees” in Item 10 above.

Our Board of Directors ~~of the Company~~ has appointed Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited (“PwC”) as our independent registered public accounting firm ~~(the “Independent Auditor”)~~ for the ~~fiscal year ending November 30, 2017.~~years ended December 31, 2023 and 2022. The following table sets forth the fees billed to ~~the Company~~us for professional services rendered by PwC for the years ended ~~November 30, 2017~~December 31, 2023 and ~~2016:~~December 31, 2022:

Policy on Audit ~~Fees~~Committee Pre-Approval of Audit and Permissible Non-audit Services of Independent Public Accountant

Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the ~~audit services~~work of our ~~annual and quarterly reports.~~

~~Our~~independent registered public accounting firm. In recognition of this responsibility, the Audit Committee ~~preapproves~~has established a policy to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm. ~~All~~

Prior to engagement of an independent registered public accounting firm for the ~~above~~next year’s audit, management will submit an aggregate of services expected to be rendered during that year for each of four categories of services to the Audit Committee for approval.

1. Audit services include audit work performed in the preparation of financial statements, as well as work that generally only an independent registered public accounting firm can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and ~~fees were reviewed~~consultation regarding financial accounting and/or reporting standards.

2. Audit-Related services are for assurance and ~~approved~~related services that are traditionally performed by ~~the Board of Directors before the respective~~ an independent registered public accounting firm, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements.

3. Tax services ~~were rendered. Our Board of Directors has considered the nature and amount of fees billed~~include all services performed by ~~PwC and believes that the provision of~~an independent registered public accounting firm’s tax personnel except those services ~~for activities unrelated~~specifically related to the audit of the financial statements, and includes fees in the areas of tax compliance, tax planning, and tax advice.

4. Other Fees are those associated with services not captured in the other categories. We generally do not request such services from our independent registered public accounting firm.

Prior to engagement, the Audit Committee pre-approves these services by category of service. The fees are budgeted, and the Audit Committee requires our independent registered public accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage our independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging our independent registered public accounting firm.

The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is ~~compatible with maintaining their respective independence.~~delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting.

~~Registrants may voluntarily include a summary of information required by Form 10-K under this Item 16. We have elected not to include such summary.~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

CONSOLIDATED FINANCIAL STATEMENTS AS OF ~~NOVEMBER 30, 2017~~DECEMBER 31, 2023

	Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB name: Kesselman & Kesselman C.P.A.s; PCAOB ID: 1309)	F-2

CONSOLIDATED FINANCIAL STATEMENTS:

Consolidated Balance Sheets	~~F-3~~F-4

Consolidated Statements of Comprehensive Loss (Income)	~~F-5~~F-6

Consolidated Statements of Changes in Equity	~~F-6~~F-7

Consolidated Statements of Cash Flows	~~F-7~~F-9

Notes to Consolidated Financial Statements	~~F-7 to~~ ~~F-42~~F-10

F-1

~~F-1~~

~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~Report of Independent Registered Public Accounting Firm

To the ~~Shareholders~~Board of

~~ORGENESIS INC.~~ Directors and shareholders of Orgenesis Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Orgenesis ~~Inc.~~Inc and its subsidiaries (the “Company”) as of ~~November 30, 2017~~December 31, 2023 and ~~2016,~~2022, and the related consolidated statements of comprehensive loss (income), changes in equity ~~(capital deficiency)~~ and 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 December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the ~~two~~ years then ended in conformity with accounting principles generally accepted in the ~~period ended November 30, 2017.~~ United States of America.

Changes in Accounting Principle

As discussed in note 2(x) to the consolidated financial statements, the Company changed the manner in which it accounts for credit losses.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1b to the consolidated financial statements, the Company has suffered recurring losses from operations and has incurred cash outflows from operating activities that 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 1b. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the ~~Company's~~Company’s management. Our responsibility is to express an opinion on ~~these~~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 ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the ~~audit~~audits to obtain reasonable assurance about whether the consolidated financial statements are free of material ~~misstatement. An~~misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit ~~includes~~of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to 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 ~~supporting~~regarding the amounts and disclosures in the consolidated financial statements. ~~An audit~~Our audits also ~~includes assessing~~included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial ~~statement presentation.~~statements. We believe that our audits provide a reasonable basis for our opinion.

~~In our opinion,~~

F-2

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue recognition and accounts receivables – collectability criteria

As described in note 2 and 17 of the consolidated financial statements, total revenue recognized for the year ended December 31, 2023 was $530 thousand. The Company’s account receivable balance as of December 31, 2023 was $88 thousand and the related credit losses for the year then ended was $24,388 thousand. The Company recognizes revenue from services to its customers when control of the services is transferred to the customer for an amount, referred to ~~above present fairly,~~as the transaction price, which reflects the consideration to which the Company is expected to be entitled in ~~all material respects,~~exchange for those goods or services. The Company applies the ~~financial position~~revenue guidance to contracts when it is probable that the Company will collect substantially all of the consideration to which it is entitled to in exchange for the goods and services it transfers to the customer. The Company ~~and its subsidiaries as of November 30, 2017 and 2016, and the results of their operations and cash flows~~considers historical collection experience for each of its customers and when revenue and accounts receivable are recorded. The Company also recognizes estimated expected credit losses over the ~~two years~~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.

The principal considerations for our determination that performing procedures relating to revenue recognition and accounts receivables – collectability criteria are a critical audit matter are the high degree of auditor judgement and effort in performing procedures to evaluate management’s assumptions of the ~~period ended November 30, 2017,~~collectability criteria.

Addressing the matter involved performing procedures and evaluating audit evidence in ~~conformity~~connection with ~~accounting principles generally accepted~~forming our overall opinion on the consolidated financial statements. These procedures included, among others, testing management’s process for evaluating the collectability criteria, and the relevance of historical billing and collection data as an input to the analysis as well as current and future economic conditions and events; testing the accuracy of a sample of revenue transactions and a sample of cash collections from the historical billing data and the historical collection which is used in management’s analysis; and performing a retrospective comparison of actual cash collected to the ~~United States~~prior year estimate of ~~America.~~
net accounts receivable.

~~Tel-Aviv, Israel~~	~~/s/~~ Kesselman & Kesselman

~~February 28, 2018~~	Certified Public Accountants (Isr.)
	A member ~~firm~~ of PricewaterhouseCoopers International Limited

~~F-2~~

Haifa, Israel

April 15, 2024

We have served as the Company’s auditor since 2012.

Kesselman & Kesselman, Building 25, MATAM, P.O BOX 15084 Haifa, 3190500, Israel,
Telephone: +972 -4- 8605000, Fax: +972 -4- 8605001, www.pwc.com/il

F-3

ORGENESIS INC.

CONSOLIDATED BALANCE SHEETS

(U.S. Dollars, in ~~thousands)~~thousands, except share and per share amounts)

November 30,
2017 2016
Assets
CURRENT ASSETS:
Cash and cash equivalents $ 3,519 $ 891
Accounts receivable, net 1,336 1,229
Prepaid expenses and other receivables 841 779
Receivables from related party 691 -
Grants receivable 183 906
Inventory 725 400
Total current assets 7,295 4,205
NON CURRENT ASSETS:
Call option derivative 339 -
Investments in associates, net 1,321 -
Property and equipment, net 5,104 4,573
Intangible assets, net 15,051 15,050
Other assets 78 75
Goodwill 10,684 9,584
Total non current assets 32,577 29,282
TOTAL ASSETS $ 39,872 $ 33,487

~~F-2~~

	2023		2022
	December 31,
	2023		2022
Assets
CURRENT ASSETS:
Cash and cash equivalents	$	837	$	5,311
Restricted cash		642		1,058
Accounts receivable, net of credit losses of $0		88		36,183
Prepaid expenses and other receivables		2,017		958
Receivables from related parties		458		-
Convertible loan		-		2,688
Inventory		34		120
Total current assets		4,076		46,318
NON CURRENT ASSETS:
Deposits	$	38	$	331
Equity investees		8		39
Loans to associates		-		96
Property, plants and equipment, net		1,475		22,834
Intangible assets, net		7,375		9,694
Operating lease right-of-use assets		351		2,304
Goodwill		1,211		8,187
Deferred tax		-		103
Other assets		18		1,022
Total non-current assets		10,476		44,610
TOTAL ASSETS	$	14,552	$	90,928

F-4

ORGENESIS INC.

CONSOLIDATED BALANCE SHEETS

(U.S. Dollars, in ~~thousands)~~thousands, except share and per share amounts)

November 30,
2017 2016
Liabilities and equity
CURRENT LIABILITIES:
Short term bank credit - 21
Accounts payable 3,914 4,554
Accrued expenses and other payables 1,435 1,205
Employees and related payables 2,961 1,680
Related parties 116 42
Advance payments on account of grant 1,719 243
Short-term loans and current maturities of long term loans 378 11, 11
Deferred income 3,611 1,273
Current maturities of convertible loans 2,780 2,541
Convertible bonds - 1,818
Investments in associate, net - 12
TOTAL CURRENT LIABILITIES 16,914 14,500

LONG-TERM LIABILITIES:
Loans payable 2,118 3,291
Convertible loans 2,415 1,059
Retirement benefits obligation 6 5
Put option derivative - 273
Deferred taxes 690 1,862
TOTAL LONG-TERM LIABILITIES 5,229 6,490
TOTAL LIABILITIES 22,143 20,990
COMMITMENTS
REDEEMABLE NON CONTROLLING INTEREST 3,606 -
EQUITY:
Common stock of $0.0001 par value, 145,833,334 shares authorized, 9,872,659 and 9,508,068 shares issued and outstanding as of November 30, 2017 and November 30, 2016, respectively 1 1
Additional paid-in capital 55,334 45,454
Receipts on account of shares to be allotted 1,483 -
Accumulated other comprehensive income (loss) 1,425 (1,205 )
Accumulated deficit (44,120 ) (31,753 )

TOTAL EQUITY 14,123 12,497

TOTAL LIABILITIES AND EQUITY $ 39,872 $ 33,487

	December 31,
	2023			2022
Liabilities and equity
CURRENT LIABILITIES:
Accounts payable	$	6,451		$	4,429
Accounts payable related Parties		133			-
Accounts payable		133			-
Accrued expenses and other payables		2,218			2,648
Income tax payable		740			289
Employees and related payables		1,079			1,860
Other payable related parties		52			-
Advance payments on account of grant		2,180			1,578
Short-term loans		650			-
Current maturities of finance leases		18			60
Current maturities of operating leases		216			542
Short-term and current maturities of convertible loans		2,670			4,504
TOTAL CURRENT LIABILITIES		16,407			15,910

LONG-TERM LIABILITIES:
Non-current operating leases	$	96		$	1,728
Convertible loans		18,967			13,343
Retirement benefits obligation		-			163
Finance leases		4			95
Other long-term liabilities		61			415
TOTAL LONG-TERM LIABILITIES		19,128			15,744
TOTAL LIABILITIES		35,535			31,654

REDEEMABLE NON-CONTROLLING INTEREST		-			30,203

EQUITY (CAPITAL DEFICIENCY):
Common stock of $0.0001 par value: Authorized at December 31, 2023 and December 31, 2022: 145,833,334 shares; Issued at December 31, 2023 and December 31, 2022: 32,163,630 and 25,832,322 shares, respectively; Outstanding at December 31, 2023 and December 31, 2022: 31,877,063 and 25,545,755 shares, respectively.		3			3
Additional paid-in capital		156,837			150,355
Accumulated other comprehensive income (loss)		65			(270	)
Treasury stock 286,567 shares as of December 31, 2023 and December 31, 2022		(1,266	)		(1,266	)
Accumulated deficit		(176,622	)		(121,261	)
Equity attributable to Orgenesis Inc.		(20,983	)		27,561
Non-controlling interests		-			1,510
TOTAL EQUITY (CAPITAL DEFICIENCY)		(20,983	)		29,071
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY (CAPITAL DEFICIENCY)	$	14,552		$	90,928

The accompanying notes are an integral part of these consolidated financial statements.

~~F-3~~

F-5

ORGENESIS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (INCOME)

(U.S. Dollars, in thousands, except share and per share amounts)

Year ended
November 30,
2017 2016
REVENUES $ 10,089 $ 6,397
COST OF REVENUES 6,807 7,657
GROSS PROFIT (LOSS) 3,282 1,260 ( )

RESEARCH AND DEVELOPMENT EXPENSES,net 2,478 2,157
AMORTIZATION OF INTANGIBLE ASSETS 1,631 1,620
SELLING, GENERAL AND ADMINISTRATIVEEXPENSES 9,189 6,240
SHARE IN LOSSES OF ASSOCIATED COMPANY 1,214 123
OPERATING LOSS 11,230 11,400
FINANCIAL EXPENSES,net 2,447 1,260
LOSS BEFORE INCOME TAXES 13,677 12,660
INCOME TAX BENEFIT (1,310 ) (1,547 )
NET LOSS $ 12,367 $ 11,113

LOSS PER SHARE:
Basic $ 1.28 $ 1.30
Diluted $ 1.31 $ 1.30
WEIGHTED AVERAGE NUMBER OF SHARES USEDIN COMPUTATION OF BASIC AND DILUTEDLOSS PER SHARE:
Basic 9,679,964 8,521,583
Diluted 9,714,252 8,521,583

COMPREHENSIVE LOSS -
Net loss $ 12,367 $ 11,113
Translation adjustments (2,630 ) (81 )
TOTAL COMPREHENSIVE LOSS $ 9,737 $ 11,032

	2023			2022
	Years Ended December 31,
	2023			2022
Revenues	$	530		$	34,741
Revenues from related party		-			1,284
Total revenues		-			1,284
Total revenues	$	530		$	36,025
Cost of revenues		6,255			5,133
Gross (loss) profit	$	(5,725	)	$	30,892
Cost of development services and research and development expenses		10,623			21,933
Amortization of intangible assets		721			911
Selling, general and administrative expenses included credit losses of $24,367 for the year ended December 31, 2023		35,134			15,589
Share in net loss of associated companies		734			1,508
Impairment of investment		699			-
Impairment of intangible assets		-			1,061
Operating loss	$	53,636		$	10,110
Loss from deconsolidation of Octomera (see Note 3)		5,343			-
Other income, net		(4	)		(173	)
Credit loss on convertible loan receivable		2,688			-
Loss from extinguishment in connection with convertible loan		283			52
Financial expenses, net		2,499			1,971
Loss before income taxes	$	64,445		$	11,960
Tax expense		473			209
Net loss	$	64,918		$	12,169
Net (loss) income attributable to non-controlling interests		(9,557	)		2,720
Net loss attributable to Orgenesis Inc.	$	55,361		$	14,889

Loss per share:
Basic and diluted	$	1.91		$	0.59

Weighted average number of shares used in computation of Basic and Diluted loss per share:
Basic and diluted		29,007,869			25,096,284

Comprehensive loss:
Net loss	$	64,918		$	12,169
Other Comprehensive loss – Translation adjustment		49			477
Release of translation adjustment due to deconsolidation of Octomera		(384	)		-
Comprehensive loss	$	64,583		$	12,646
Comprehensive (loss) income attributed to non-controlling interests		(9,557	)		2,720
Comprehensive loss attributed to Orgenesis Inc.	$	55,026		$	15,366

The accompanying notes are an integral part of these consolidated financial statements.

~~F-4~~

F-6

ORGENESIS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CAPITAL DEFICIENCY)~~STATEMENTS~~ OF~~CHANGES~~ IN~~EQUITY~~

(U.S.Dollars, inthousands, except shareamounts)

Common Stock Receipts on Accumulated
Additional Account of   Other
Par Paid-in   Share to be Comprehensive Accumulated
Number Value Capital Allotted Income (loss) Deficit Total
BALANCE AT DECEMBER 1, 2016 4,653,009 $ 1 $ 14,234 $ 1,251 $ (1,286 ) $ (20,640 ) $ (6,440 )
Changes during the Year ended November 30,2016:
Stock-based compensation to employees and directors 1,103 1,103
Stock-based compensation to service providers 220,836 * 1,613 1,613
Warrants and shares issued due to extinguishment of a convertible loan 24,039 * 114 114
Beneficial conversion feature of convertible loans 257 257
Issuances of shares and warrants from investments and conversion of convertible loans 1,076,707 * 6,675 (1,251 ) 5,424
Reclassification of redeemable non-controlling interest ** 3,533,477 * 21,458 21,458
Comprehensive loss for the year 81 (11,113 ) (11,032 )

BALANCE AT NOVEMBER 30, 2016 9,508,068 1 45,454 - (1,205 ) (31,753 ) 12,497
Changes during the Year ended November 30,2017:
Stock-based compensation to employees and directors 1,536 1,536
Stock-based compensation to service providers 79,167 * 1,828 1,828
Beneficial conversion feature of convertible loans and warrants issued 2,814 2,814
Issuance of shares, cancellation of contingent shares, and receipts on account of shares and warrants to be allotted and 285,424 * 3,702 1,483 5,185
Comprehensive income (loss) for the year 2,630 (12,367 ) (9,737 )
BALANCE AT NOVEMBER 30, 2017 9,872,659 $ 1 $ 55,334 $ 1,483 $ 1,425 $ (44,120 ) $ 14,123

	Number		Par Value		Additional Paid-in Capital			Other Comprehensive Income (loss)			Treasury Shares			Accumulated Deficit			to Orgenesis Inc.			Non- Controlling Interest			Total
	Common Stock							Accumulated									Equity Attributable
	Number		Par Value		Additional Paid-in Capital			Other Comprehensive Income (loss)			Treasury Shares			Accumulated Deficit			to Orgenesis Inc.			Non- Controlling Interest			Total
Balance at January 1, 2023		25,545,755	$	3	$	150,355		$	(270	)	$	(1,266	)	$	(121,261	)	$	27,561		$	1,510		$	29,071
Changes during the Year ended December 31, 2023:
Stock-based compensation to employees and directors		-		-		415			-			-			-			415			-			415
Stock-based compensation to service providers		-		-		48			-			-			-			48			-			48
Issuance of shares and warrants net of issuance costs		5,357,624		-*		5,283			-			-			-			5,283			-			5,283
Issuance of Shares due to exercise of warrants		973,684		-*		-			-			-			-			-			-			-
Issuance of warrants with respect to convertible loans		-		-		449			-			-			-			449			-			449
Extinguishment in connection with convertible loan restructuring		-		-		287			-			-			-			287			-			287
Deconsolidation of Octomera		-		-		9,406			384			-			-			9,790			(1,360	)		8,430
Adjustment to redemption value of redeemable non-controlling interest		-		-		(9,406	)		-			-			-			(9,406	)		-			(9,406	)
Comprehensive income (loss) for the period		-		-		-			(49	)		-			(55,361	)		(55,410	)		(150	)		(55,560	)
Balance at December 31, 2023		31,877,063		3		156,837			65			(1,266	)		(176,622	)		(20,983	)		-			(20,983	)

*	Represents an amount lower than $1

The accompanying notes are an ~~amount lower than $ 1 thousand~~
**Including outstanding contingentintegral part of these consolidated financial statement

F-7

ORGENESIS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(U.S. Dollars, in thousands, except share ~~see Note 11(d)~~
amounts)

	Common Stock						Accumulated Other									Equity Attributable
	Number		Par Value		Additional Paid-in Capital		Comprehensive Income (loss)			Treasury Shares			Accumulated Deficit			to Orgenesis Inc.			Non- Controlling Interest			Total
Balance at January 1, 2022		24,280,799	$	3	$	145,916	$	207		$	(1,266	)	$	(106,372	)	$	38,488		$	143		$	38,631
Balance		24,280,799	$	3	$	145,916	$	207		$	(1,266	)	$	(106,372	)	$	38,488		$	143		$	38,631
Changes during the Year ended December 31, 2022:
Stock-based compensation to employees and directors		-		-		916		-			-			-			916			-			916
Stock-based compensation to service providers		-		-		66		-			-			-			66			-			66
Exercise of options		510,017		-*		6		-			-			-			6			-			6
Issuance and modification of warrants with respect to convertible loans						950											950						950
Extinguishment in connection with convertible loan restructuring		-		-		226		-			-			-			226			-			226
Issuance of Shares		724,999		-*		2,175		-			-			-			2,175			-			2,175
Issuance of shares related to acquisition of Mida		29,940		-*		100		-			-			-			100			-			100
Non- Controlling Interest arising from a business combination		-		-		-		-			-			-			-			(1,353	)		(1,353	)
Comprehensive income (loss) for the period		-		-		-		(477	)		-			(14,889	)		(15,366	)		2,720			(12,646	)
Balance at December 31, 2022		25,545,755		3		150,355		(270	)		(1,266	)		(121,261	)		27,561			1,510			29,071
Balance		25,545,755		3		150,355		(270	)		(1,266	)		(121,261	)		27,561			1,510			29,071

*	Represents an amount lower than $1

The accompanying notes are an integral part of these consolidated financial statements.

~~F-5~~

F-8

ORGENESIS INC.

CONSOLIDATED STATEMENTS OF CASH ~~FLOWS~~FLOWS(*)

(U.S. Dollars, in thousands)

Year ended November 30,
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (12,367 ) $ (11,113 )
Adjustments required to reconcile net loss to net cash used in operating activities:
Stock-based compensation 3,364 2,869
Share in losses of associated company 1,214 123
Loss from extinguishment of a convertible loan - 229
Depreciation and amortization expenses 2,598 2,923
Change in fair value of warrants and embedded derivatives (826 ) 187
Change in fair value of convertible bonds (192 ) (84 )
          Interest expense accrued on loans and convertible loans (including amortization
              of beneficial conversion feature) 1,110 283
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable, net 33 (54 )
Increase in inventory (265 ) (101 )
Increase in other assets (3 ) (17 )
Decrease (increase) in prepaid expenses and other accounts receivable (107 ) 136
Increase in related parties, net (583 )
Increase (decrease) in accounts payable (933 ) 1,079
Increase in accrued expenses 92 399
Increase in employee and related payables 1,142 352
Increase in deferred income 1,044 53
Increase in advance payments and receivables on account of grant 2,156 499
Decrease in deferred taxes (1,310 ) (1,546 )
           Net cash used in operating activities (3,833 ) (3,783 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (975 ) (1,425 )
Investments in associates (2,429 ) (111 )
Net cash used in investing activities (3,404 ) (1,536 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term line of credit (21 ) 21
Proceeds from issuance of shares and warrants 5,297 1,488
Loans received - 1,121
Redeemable non-controlling interest 2,349 -
Repayment of short and long-term debt (1,108 ) (2,106 )
Repayment of convertible loans (4,051 )
Proceeds from issuance of convertible loans (net of transaction costs) 5,899 1,599
Net cash provided by financing activities 8,365 2,123
NET CHANGE IN CASH AND CASH EQUIVALENTS 1,128 (3,196 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH ANDCASH EQUIVALENTS 1,497 (81 )
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 891 4,168

CASH AND CASH EQUIVALENTS AT END OF YEAR $ 3,519 $ 891

SUPPLEMENTAL NON-CASH FINANCING ACTIVITY
Conversion of loans (including accrued interest) to common stock and warrantsofMaSTherCell $ 1,277 $ 1,028
Reclassification of redeemable non-controlling interest to equity $ - $ 21,458

SUPPLEMENTAL INFORMATION ON INTEREST PAID IN CASH $ 903 $ 106

	2023			2022
	Years Ended December 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(64,918	)	$	(12,169	)
Adjustments required to reconcile net loss to net cash used in operating activities:
Stock-based compensation		463			982
Capital gain, net		-			(170	)
Loss from deconsolidation of Octomera		5,343			-
Share in loss of associated companies, net		734			1,508
Depreciation and amortization expenses		1,560			1,978
Credit loss on convertible loan receivable		2,688
Impairment of investment		699			-
Impairment expenses of intangible assets		-			1,061
Effect of exchange differences on inter-company balances		227			502
Net changes in operating leases		(50	)		(61	)
Interest expense accrued on loans and convertible loans		1,508			1,372
Loss from extinguishment in connection with convertible loan restructuring		283			52
Changes in operating assets and liabilities:
Accounts receivable		30,060			(21,051	)
Prepaid expenses, other accounts receivable		432			391
Inventory		(389	)		(7	)
Other assets		13			26
Related parties, net		(439	)		-
Accounts payable		5,516			(1,321	)
Accrued expenses and other payable		1,013			2,302
Employee and related payables		411			(216	)
Deferred taxes, net		9			(103	)
Net cash used in operating activities	$	(14,837	)	$	(24,924	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Repayment of convertible loan to related party partners		-			538
Decrease in loan to associate entities		55			-
Increase in loan to associate entities		-			(4,131	)
Repayment of loan granted		-			782
Sale of property, plants and equipment		-			246
Purchase of property, plants and equipment		(2,096	)		(12,416	)
Investment in associated company		(660	)		-
Cash acquired from acquisition of Mida		-			702
Impact to cash resulting from deconsolidation (see Note 3)		(973	)		-
Increase in cash from business combinations of TLABS and Orgenesis Austria		-			160
Investment in long-term deposits		(33	)		(14	)
Net cash used in investing activities	$	(3,707	)	$	(14,133	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares due to exercise of options and warrants (net of transaction costs)		5,283			2,181
Proceeds from issuance of convertible loans		5,735			19,150
Proceeds from transaction with redeemable non-controlling interest that do not result in a loss of control, see note 3		5,000			20,000
Repayment of convertible loans and convertible bonds		(3,000	)		(2,300	)
Repayment of short and long-term debt		(35	)		(46	)
Proceeds from issuance of loans payable		635			-
Grant received in respect of third party		-			1,396
Transfer of the grant received to third party		-			(803	)
Net cash provided by financing activities	$	13,618		$	39,578
NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		(4,926	)		521
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	$	36		$	(126	)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR	$	6,369		$	5,974
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR	$	1,479		$	6,369

SUPPLEMENTAL NON-CASH FINANCING AND INVESTING ACTIVITIES
Right-of-use assets obtained in exchange for new finance lease liabilities	$	-		$	136
Right-of-use assets obtained in exchange for new operation lease liabilities	$	752		$	432
Increase (decrease) in accounts payable related to purchase of property, plant and equipment	$	14		$	(383	)
Loan conversion for Redeemable non-controlling interest (See note 3)	$	-		$	10,203
Issuance of common stocks in connection with the acquisition of Mida	$	-		$	100
Extinguishment in connection with convertible loan restructuring		287		$	226

CASH PAID DURING THE YEAR FOR:
Interest	$	785		$	458

The accompanying notes are an integral part of these consolidated financial statements.

~~F-7~~

F-9

ORGENESIS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US Dollars in Thousands~~FOR THE YEARS ENDED NOVEMBER 30, 2017 AND 2016~~)

NOTE 1 – DESCRIPTION OF BUSINESS

a. ~~General~~

General

Orgenesis Inc.~~, a Nevada corporation,~~ (the “Company”) is a ~~service~~global biotech company working to unlock the potential of Cell and ~~research company~~Gene Therapies (“CGTs”) in an affordable and accessible format. CGTs can be centered on autologous (using the patient’s own cells) or allogenic (using master banked donor cells) and are part of a class of medicines referred to as advanced therapy medicinal products (“ATMPs”). The Company is mostly focused on the development of autologous therapies that can be manufactured under processes and systems that are developed for each therapy using a closed and automated approach that is validated for compliant production near the patient for treatment of the patient at the point of care (“POCare”).

In connection with the investment by an affiliate of Metalmark Capital Partners (“Metalmark” or “MM”) in the ~~field of regenerative medicine industry with a focus on cell therapy development and manufacturing for advanced medicinal products. In addition,~~Company’s subsidiary Octomera LLC (formerly Morgenesis LLC) (“Octomera” or “Morgenesis”) in November 2022 (“the Metalmark Investment”), the Company ~~is focused on developing novel~~separated its operations into two operating segments: the operations of Octomera (the “Morgenesis” or “Octomera” segment) and ~~proprietary cell therapy trans-differentiation technologies for~~therapies related activities (the “Therapies” segment).

On June 30, 2023, in connection with an additional $1,000 investment in Octomera, the ~~treatment~~Company and MM entered into Amendment No. 1 to the Second Amended and Restated Limited Liability Company Agreement (the “LLC Agreement Amendment”) to change the name of ~~diabetes.~~Morgenesis to “Octomera LLC” and to amend Morgenesis’ board composition. Pursuant to the LLC Agreement Amendment, the board of managers of Octomera (the “Octomera Board”) will be comprised of five managers, two of which will be appointed by the Company, one of which will be an industry expert appointed by MM, and two of which will be appointed by MM. The change was effective immediately. As a result of the amendment to the composition of the Octomera Board pursuant to the LLC Agreement Amendment described above, the Company deconsolidated Octomera from its consolidated financial statements as of June 30, 2023 (“date of deconsolidation”) and recorded its equity interest in Octomera as an equity method investment, see note 3.

On January 29, 2024, the Company and MM entered into a Unit Purchase Agreement (the “UPA”), pursuant to which the Company acquired all of the preferred units of Octomera owned by MM (the “Acquisition”). Accordingly, the Company currently owns 100% of the equity interests of Octomera.

These consolidated financial statements include the accounts of Orgenesis Inc., and its subsidiaries MaSTherCell S.A (“MaSTherCell”), its Belgian-based subsidiary and a contract development and manufacturing organization, or CDMO, specialized in cell therapy development and manufacturing for advanced medicinal products; Orgenesis SPRL (the “Belgian Subsidiary”), a Belgian-based subsidiary which is engaged in development and manufacturing activities, together with clinical development studies in Europe, Orgenesis Maryland Inc. (the “U.S. Subsidiary”), a Maryland corporation, and Orgenesis Ltd., an Israeli corporation, (the “Israeli Subsidiary”).subsidiaries.

The Company’s ~~goal~~common stock, par value $0.0001 per share (the “Common Stock”), is ~~to industrialize cell therapy~~listed and traded on the Nasdaq Capital Market under the symbol “ORGS.” The Company must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share for ~~fast, safe and cost-effective production in order to provide rapid therapies~~30 consecutive business days. Because the Company’s Common Stock has traded for ~~any market around~~30 consecutive business days below the ~~world through~~$1.00 minimum closing bid price requirement, Nasdaq has sent a world-wide network of CDMOs joint venture partners. The Company’s trans-differentiation technologies for treating diabetes, which will be referred to as the cellular therapy (“CT”) business, is based on a technology licensed by Tel Hashomer Medical Research (“THM”)deficiency notice to the ~~Israeli Subsidiary~~Company, which was received on September 27, 2023, advising that ~~demonstrates~~it has been afforded a “compliance period” of 180 calendar days to regain compliance with the ~~capacity to induce a shift in the developmental fate of cells from the liver and trans-differentiating (converting) them into “pancreatic beta cell-like” insulin-producing cells.~~

applicable requirements. On March ~~14, 2016,~~26, 2024, Nasdaq extended the ~~Company and CureCell Co., Ltd. (“CureCell”) entered into a Joint Venture Agreement (the “CureCell JVA”) pursuant~~“compliance period” to ~~which the parties are collaborating in the contract development and manufacturing of cell therapy products in Korea. See also Note 5.~~September 23, 2024.

On May 10, 2016, the Company and Atvio Biotech Ltd., (“Atvio”) entered into a Joint Venture Agreement (the “Atvio JVA”) pursuant to which the parties agreed to collaborate in the contract development and manufacturing of cell and virus therapy products in the field of regenerative medicine in Israel. See also Note 5.

As used in this report and unless otherwise indicated, the term “Company” refers to Orgenesis Inc. and its ~~subsidiaries (“Subsidiaries”).~~Subsidiaries. Unless otherwise specified, all amounts are expressed in United States Dollars.

~~On November 16, 2017,~~

b.	Liquidity

Through December 31, 2023, the Company ~~implemented a reverse stock split~~had an accumulated deficit of $176,622. For the year ended December 31, 2023, the Company incurred negative cash flows from operating activities of $14,837. The Company’s activities have recently been funded primarily by offerings of its ~~outstanding shares of common stock at a ratio of 1-for-12 shares. The reverse stock split has been reflected in this Annual Report on Form 10-K. See Note 11(a).~~

b. ~~Liquidity~~

~~As of November 30, 2017, we have accumulated losses of approximately $44.1 million. Although we are now showing positive revenue~~equity securities, loans, and ~~gross profit trends in our CDMO division, we expect to incur further losses in the CT division.~~

~~The Company has been funding operations primarily from the proceeds from private placements of~~convertible loans. There is no assurance that the Company’s convertible debt and equity securities and from revenues generated by MaSTherCell. From December 1, 2016 through November 30, 2017, the Company received, through MaSTherCell, proceeds of approximately $8.9 million in revenues and accounts receivable from customers and $11.4 million from the private placementbusiness will generate sustainable positive cash flows to accredited investors of the Company's equity and equity linked securities and convertible loans, out of which $4.5 million are from the institutional investor with whom the Company entered into definitive agreements in January 2017 for the private placement of units of the Company's securities for aggregate subscription proceeds of $16 million. The subscription proceeds are payable on a periodic basis through August 2018. In addition, from December 1, 2017 through February 28, 2018, the Company raised $3.8 million from the proceeds of a private placement to certain accredited investors of equity and equity-linked securities and received, through MaSTherCell, proceeds of approximately $2.6 million in accounts receivable fromfund its ~~customers.~~business operations.

~~F-9~~

F-10

Based on its current cash resources and commitments, the Company believes it will be able to maintain its current planned development activity and corresponding level of expenditures for at least 12 months from the date of the issuance of the financial statements, although no assurance can be given that it will not need additional funds prior to such time.

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

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

The estimation and execution uncertainty regarding the Company’s future cash flows and 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.

NOTE 2 - ~~SUMMARY OF~~ SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements are prepared in accordance with accounting ~~policies adopted are~~principles generally ~~consistent with those of~~
accepted in the ~~previous financial year.~~United States (“U.S. GAAP”).

a.Use of Estimates in the Preparation of Financial Statements

The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires ~~management~~us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and ~~liabilities~~expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities atand equity, the ~~financial statement date~~amount of revenues and ~~the reported~~ expenses, ~~during the reporting periods.~~determination of loss on deconsolidation, valuation of investments, goodwill impairment, and assessment of credit losses. Actual results could differ from those estimates. As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to the valuation of stock-based compensation, valuation of financial instruments measured at fair value and valuation of impairment of goodwill and intangible assets.

b.Business Combination

The Company allocates the ~~purchase price~~fair value of anconsideration transferred in a business combination to the assets acquired, liabilities assumed, and non-controlling interests in the acquired business ~~to the tangible and intangible assets acquired and liabilities assumed~~ based ~~upon~~on their ~~estimated~~ fair values onat the acquisition date. ~~Any excess of the purchase price over the fair value of the net~~All assets ~~acquired is recorded as goodwill. Acquired in-process backlog, customer relations, brand name~~ and ~~know how~~liabilities are recognized atin fair value. The purchase price allocation process requires management to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets. Direct transaction costs associated with the business combination are expensed as incurred. The excess of the fair value of the consideration transferred plus the fair value of any non-controlling interest in the acquiree over the fair value of the assets acquired, liabilities assumed in the acquired business is recorded as goodwill. The allocation of the consideration transferred in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. The cumulative impact of revisions during the measurement period is recognized in the reporting period in which the revisions are identified. The Company includes the results of operations of the business that it has acquired in its consolidated results prospectively from the date of acquisition.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquire is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized in profit or loss.

F-11

c.Cash Equivalents

The Company considers cash equivalents to be all ~~short term,~~short-term, highly liquid investments, which include ~~short term~~money market instruments, that are not restricted as to withdrawal or use, and short-term bank deposits with original maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of ~~cash, to be cash equivalents.~~cash.

d.~~Research~~Cost of development services and ~~Development, net~~research and development expenses

~~Research~~

Cost of development services and research and development expenses include costs directly attributable to the conduct of research and development ~~programs,~~activities, including the cost of salaries, stock-based compensation expenses, payroll taxes and other ~~employees'~~employees’ benefits, lab expenses, consumable equipment, courier fees, travel expenses, professional fees and consulting fees. All costs associated with research and developments are expensed as incurred. Participation from government departments and from research foundations for development of approved projects is recognized as a reduction of expense as the related costs are incurred. Research and development in-process acquired as part of an asset purchase, which has not reached technological feasibility and has no alternative future use, is expensed as incurred.

e.Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its Subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

~~F-10~~

f.~~Non Marketable~~Non-Marketable Equity Investments

The Company’s investments in certain non-marketable equity securities in which it has the ability to exercise significant influence, but it does not control through variable interests or voting ~~interests,~~interests. These are accounted for under the equity method of accounting and presented as Investment in associates, net, in the Company’s consolidated balance sheets. Under the equity method, the Company recognizes its proportionate share of the comprehensive income or loss of the investee. The Company’s share of income and losses from equity method investments is included in share in losses of associated company.

The Company periodically reviews ~~its investments accounted for under the~~ equity method investments for ~~possible~~ impairment ~~which generally involves an analysis of the facts and~~in value whenever events or changes in circumstances ~~influencing~~indicate that the ~~investments.~~carrying amount of such investments may not be recoverable. The Company will record an impairment charge to the extent that the estimated fair value of an investment is less than its carrying value and the Company determines the impairment is other-than-temporary. Impairment charges, if applicable, are recorded in “Share in net (losses) profits of associated companies”.

For other investments, the Company applies the measurement alternative upon the adoption of ASU 2016-01 and elected to record equity investments without readily determinable fair values at cost, less impairment, adjusted for subsequent observable price changes. In this measurement alternative method, changes in the carrying value of the equity investments are reflected in current earnings. Changes in the carrying value of the equity investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer.

g.Fair value measurement

The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable inputs that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.

F-12

h.Functional Currency

The currency of the primary economic environment in which the operations of the Company and part of its Subsidiaries are conducted is the U.S. dollar (“$” or “dollar”). The functional currency of the Belgian ~~Subsidiaries~~Subsidiary is the Euro (“€” or “Euro”~~). The functional currency of CureCell is the Won (“KRW”~~). Most of the Company’s expenses are incurred in dollars, and the source of the Company’s financing has been provided in dollars. Thus, the functional currency of the Company and its other subsidiaries is the dollar. Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in foreign currencies are translated into dollars using historical and current exchange rates for nonmonetary and monetary balances, respectively. For foreign transactions and other items reflected in the statements of operations, the following exchange rates are used: (1) for transactions – exchange rates at transaction dates or average rates and (2) for other items (derived from nonmonetary balance sheet items such as depreciation) – historical exchange rates. The resulting transaction gains or losses are recorded as financial income or expenses. The financial statements of the Belgian ~~Subsidiaries and the investment in CureCell are~~Subsidiary is included in the consolidated financial statements, translated into U.S. dollars. Assets and liabilities are translated at year-end exchange rates, while revenues and expenses are translated at yearly average exchange rates during the year. Differences resulting from translation of assets and liabilities are presented as other comprehensive income.

h. ~~Inventory~~

i.Inventory

The Company’s inventory consists of raw material for use for the services provided. The Company periodically evaluates the quantities on hand. Cost of the raw materials is ~~stated~~determined using the weighted average cost method. The inventory is recorded at the lower of cost or net realizable ~~value with cost determined under the first-in-first-out (FIFO) cost method. The entire balance of inventory at November 30, 2017~~value.

j.Property, Plants and ~~2016, consists of raw material.~~Equipment

Property, ~~and Equipment~~

~~Property~~plants and equipment are recorded at cost and depreciated by the straight-line method over the estimated useful lives of the related assets.

Annual rates of depreciation are presented in the table below:

SCHEDULE OF ANNUAL DEPRECIATION RATES, PROPERTY AND EQUIPMENT

		Weighted Average
	Useful Life (Years)
Production facility	20	3 - 5
Laboratory equipment	5	1 - 7
Office equipment and computers	~~3-5~~	3 - 17

k.Intangible assets

Intangible assets and their useful lives are as follows:

SCHEDULE OF INTANGIBLE ASSETS AND THEIR USEFUL LIVE

		~~Weighted Average~~Useful Life (Years)		Amortization Recorded at
		~~Useful Life (Years)~~	Comprehensive Loss Line Item
Technology	~~Customer Relationships~~	~~7.75~~15		Amortization of intangible assets
	~~Brand~~	~~9.75~~	~~Amortization of intangible assets~~
	~~Know-How~~	~~11.75~~	~~Amortization of intangible assets~~

~~F-11~~

Intangible assets are recorded at acquisition ~~cost~~ less accumulated amortization and impairment. Definite lived intangible assets are amortized over their estimated useful life using the straight-line method, which is determined by identifying the period over which the cash flows from the asset are expected to be generated. The Company capitalizes IPR&D projects acquired as part of a business combination. On successful completion of each project, IPR&D assets are reclassified to developed technology and amortized over their estimated useful lives.

j.~~Goodwill~~

F-13

l.Goodwill

Goodwill represents the excess of ~~the purchase price of acquired business~~consideration transferred over the ~~estimated fair~~ value assigned to the net tangible and identifiable intangible assets of businesses acquired. Goodwill is allocated to reporting units expected to benefit from the ~~identifiable net assets acquired.~~business combination. Goodwill is not amortized but israther tested for impairment at least annually ~~(at November 30), at~~in the ~~reporting unit level~~fourth quarter, or more frequently if events or changes in circumstances indicate that ~~the asset might~~goodwill may be impaired. ~~The~~Before the Octomera deconsolidation, the Company reallocated its goodwill into two identified operating units: Octomera and Therapies. Subsequent to the Octomera deconsolidation, the goodwill allocated to Octomera was derecognized. As of December 31, 2023 - goodwill is solely allocated to Therapies operating unit. Goodwill impairment ~~test~~ is ~~applied by performing a qualitative~~recognized when the quantitative assessment ~~before calculating~~results in the carrying value exceeding the fair value, ofin which case an impairment charge is recorded to the reporting unit. If, on the basis of qualitative factors, it is considered not more likely than not that the fair value of the reporting unit is less than the carrying amount, further testing of goodwill for impairment would not be required. Otherwise, goodwill impairment is tested using a two-step approach.

The first step involves comparing the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit is determined to be greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount is determined to be greater than the fair value, the second step must be completed to measure the amount of impairment, if any. The second step involves calculating the implied fair value of goodwill by deducting the fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the fair value of the reporting unit as determined in step one. The implied fair value of the goodwill in this step is compared toextent the carrying value ~~of goodwill. If~~exceeds the ~~implied~~ fair ~~value of the goodwill is less than the carrying value of the goodwill, an impairment loss equivalent to the difference is recorded.~~ value.

There were no impairment charges ~~in 2017 and 2016.~~to goodwill during the periods presented.

m.Impairment of Long-lived Assets

The Company reviews its property, plants and equipment, intangible assets subject to amortization and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset class may not be recoverable. Indicators of potential impairment include: an adverse change in legal factors or in the business climate that could affect the value of the asset; an adverse change in the extent or manner in which the asset is used or is expected to be used, or in its physical condition; and current or forecasted operating or cash flow losses that demonstrate continuing losses associated with the use of the asset. If indicators of impairment are present, the asset is tested for recoverability by comparing the carrying value of the asset to the related estimated undiscounted future cash flows expected to be derived from the asset. If the expected cash flows are less than the carrying value of the asset, then the asset is considered to be impaired and its carrying value is written down to fair value, based on the related estimated discounted cash flows. ~~There were no~~For indefinite life intangible assets, the Company performs an impairment ~~charges~~test annually in ~~2017~~the fourth quarter and ~~2016.~~

l. ~~Revenue Recognition~~

~~The Company recognizes revenue for services linked to cell process development and cell manufacturing services based on individual contracts~~whenever events or changes in ~~accordance with Accounting Standards Codification (“ASC”) 605,~~~~Revenue Recognition,~~~~when~~circumstances indicate the ~~following criteria have been met: persuasive evidence~~carrying value of an arrangement exists; delivery of the processed cells has occurred or the services that are milestones based have been provided; the price is fixed or determinable and collectability is reasonably assured.asset may not be recoverable. The Company determines that persuasive evidence of an arrangement exists based on written contracts that define the terms of the arrangements. In addition, the Company determines that services have been delivered in accordance with the arrangement. The Company assesses whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. Service revenues are recognized as the services are provided.

The Company also incurs revenue from selling of some consumables which are incidental to the services provided as foreseen in the clinical services contracts. Such revenue is recognized upon delivery of the processed cells in which they were consumed.

m. ~~Financial Liabilities Measured at Fair Value~~

1) ~~Fair Value Option~~

~~F-12~~

Topic 815 provides entities with an option to report certain financial assets and liabilities at fair value with subsequent changes in fair value reported in earnings. The election can be applied on an instrument by instrument basis. The Company elected the fair value ~~option to its convertible bonds. The liability is measured both initially and in subsequent periods at fair value, with changes in fair value charged to finance expenses, net (See also Note 15).~~

2) ~~Derivatives~~

Embedded derivatives are separated from the host contract and carried at fair value when (1) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the ~~host contract~~asset based on discounted cash flows and ~~(2) a separate, standalone instrument with~~records an impairment loss if its book value exceeds fair value.

Impairment charges of IPR&D during the same terms would qualify as a derivative instrument. The derivative is measured both initially and in subsequent periods at fair value, with changes in fair value charged to finance expenses, net. As to embedded derivatives arising fromyear ended December 31, 2022 were $1,061.

Impairment charges of other investment during the ~~issuance of convertible debentures (See Note 15)~~year ended December 31, 2023 were $699.

n.Income Taxes

1) With respect to deferred taxes, income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates 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.

2) The Company follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates that it is more likely than not that the position will be sustained on examination. If this threshold is met, the second step is to measure the tax position as the largest amount that is greater than 50% likely of being realized upon ultimate ~~settlement.~~settlement.

3) Taxes that would apply in the event of disposal of investment in Subsidiaries and associated companies have not been taken into account in computing the deferred income taxes, as it is the Company’s intention to hold these investments and not realize them.

o.Stock-based Compensation

The Company ~~accounts for employee~~recognizes stock-based compensation ~~in accordance with~~for the ~~guidance of ASC Topic 718,~~~~Compensation - Stock Compensation~~~~, which requires all share based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their grant date fair values. The~~estimated fair value of ~~the equity instrument is charged to~~share-based awards. The Company measures compensation expense for share-based awards based on estimated fair values on the date of grant using the Black-Scholes option-pricing model. This option pricing model requires estimates as to the option’s expected term and ~~credited~~the price volatility of the underlying stock. The Company amortizes the value of share-based awards to ~~additional paid in capital~~expense over the vesting period ~~during which services are rendered. The Company recorded stock based compensation expenses using the straight line method.~~

~~The Company follows ASC Topic 505-50,~~~~Equity-Based Payments to Non-Employees~~, for stock options issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options issued as compensation for services provided to the Company are accounted for based upon the fair value of the options. The fair value of the options granted is measured on a ~~final basis at the end of the related service period and is recognized over the related service period using the straight line method.~~straight-line basis.

F-14

p.RedeemableNon-controlling Interest

Non-controlling interests with embedded redemption features, ~~such as an unwind option,~~ whose settlement is not at the ~~Company's~~Company’s discretion, are considered redeemable non-controlling interest. Redeemable non-controlling interests are considered to be temporary equity and are therefore presented as a mezzanine section between liabilities and equity on the ~~Company's~~Company’s consolidated balance sheets. Redeemable non-controlling interests are measured at the greater of the initial carrying amount adjusted for the non-controlling interest’s share of comprehensive income or loss or its redemption value. Subsequent adjustment of the amount presented in temporary equity is required only if the ~~Company's~~Company’s management estimates that it is probable that the instrument will become redeemable. Adjustments of redeemable non-controlling interest to its redemption value are recorded through additional paid-in capital.

~~F-13~~

q. Loss per Share of Common Stock
            ~~Net~~
Basic net loss (income) per share ~~basic and diluted,~~ is computed ~~on the basis of~~by dividing the net loss (income) for the period ~~divided~~ by the weighted average number of shares of common ~~shares~~stock outstanding ~~during the~~for each period. Diluted net ~~loss~~income per share is based upon the weighted average number of common shares and of common shares equivalents outstanding when dilutive. Common share equivalents include: (i) outstanding stock options, ~~under the Company’s Global Share Incentive Plan (2012)~~RSUs and warrants which are included under the treasury share method when dilutive, and (ii) common shares to be issued under the assumed conversion of the Company’s outstanding convertible loans and debt, which are included under the if-converted method when dilutive (See Note ~~12)~~14).
r.Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist of principally cash and cash equivalents,bank deposits and certain receivables. The Company held these instruments with highly rated financial institutions and the Company has not experienced any significant credit losses in these accounts and does not believe the Company is exposed to any significant credit risk on these instruments apart of accounts receivable. The Company performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for doubtful accounts. ~~An appropriate allowance for doubtful~~
The Company’s accounts ~~is included in~~receivable accounting policy until December 31, 2022, prior to the ~~accounts and netted against accounts receivable. In~~adoption of the ~~year ended November 30, 2017, the Company has recorded an allowance of $897 thousand ($336 in the year ended November 30, 2016).~~
            ~~Bad debt allowance is~~new Current Expected Credit Losses (“CECL”) standard, created bad debts when objective evidence ~~exists~~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, or material delays in payments ~~are~~and other objective considerations by management that indicate expected risk of payment were all considered indicative of reduced debtor balance value.
s. ~~Beneficial Conversion Feature (“BCF”)~~
           ~~When~~ Effective January 1, 2023, the Company ~~issues convertible debt, if~~adopted the ~~stock price is greater than~~new CECL standard.
The Company maintains the ~~effective conversion price (after allocation~~allowance for estimated losses resulting from the inability of the ~~total proceeds)~~Company’s customers to make required payments. The Company considers historical collection experience for each of its customers and when revenue and accounts receivable are recorded. The Company also recognizes 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.
s.Treasury shares
The Company repurchases its common stock from time to time on the ~~measurement date,~~open market and holds such shares as treasury stock. The Company presents the ~~conversion feature is considered "beneficial"~~cost to repurchase treasury stock as a reduction of shareholders’ equity. The Company did not reissue nor cancel treasury shares during the ~~holder. If there is no contingency, this difference is treated as issued equity~~year ended December 31, 2023 and ~~reduces the carrying value of the host debt; the discount is accreted as deemed interest on the debt (See Note 7).~~December 31, 2022.
F-15
t.Other Comprehensive Loss
Other comprehensive loss represents adjustments of foreign currency translation.
u.~~Recently Issued Accounting Pronouncements~~
a. ~~Recently Issued Accounting Pronouncements- adopted by the Company~~
            In July 2017, the FASB issued ASU 2017-11, "Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480; Derivatives and Hedging (Topic 815)", ("ASU 2017-11"). This update was issued to address complexities in accounting for certain equity-linked financial instruments containing down round features. The amendment changes the classification analysis of these financial instruments (or embedded features) so that equity classification is no longer precluded. The amendments in ASU 2017-11 are effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company elected to early adopt the standard effective September 1, 2017, retrospectively. Following is the results of the adoption on the Company’s consolidated financial statements previously reported:
~~F-14~~
            ~~Balance sheet and Shareholders’ equity~~
November 30, 2016
Impact
As reported of
Previously adoption As revised
In thousands

Price protection derivative $ 76 $ (76 ) $ -
Total current liabilities 14,576 (76 ) 14,500
Warrants 1,843 (1,843 ) -
Total long-term liabilities 8,333 (1,843 ) 6,490
Total liabilities 22,909 (1,919 ) 20,990
Additional paid-in capital 41,605 3,838 45,443
Accumulated deficit (29,834 ) (1,919 ) (31,753 )
Total equity $ 10,578 $ 1,919 $ 12,497
            ~~Statement of Comprehensive loss~~
Year ended November 30, 2016
Impact
As reported of
Previously adoption As revised
In thousands

Financial expenses, net $ (659 ) $ 1,919 $ 1,260
Loss before income taxes $ 10,741 $ 1,919 $ 12,660
Net loss $ 9,194 $ 1,919 $ 11,113
b. ~~Recently Issued Accounting Pronouncements- not yet adopted by the Company~~

~~In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”) "Revenue~~Revenue from Contracts with ~~Customers." ASU 2014-09 will supersede most current~~Customers

The Company’s agreements are primarily service and processing contracts, the performance obligations of which range in duration from a few months to one year. The Company applies the revenue ~~recognition~~ guidance ~~including industry-specific guidance. The underlying principle~~to contracts when control of the services is ~~that an entity will recognize revenue upon~~transferred to the ~~transfer of goods or services to customers in~~customer for an amount, ~~that~~referred to as the ~~entity expects~~transaction price, which reflects the consideration to which the Company is expected to be entitled to in exchange for those goods or ~~services. On July 9, 2015,~~services and when it is probable that the ~~FASB deferred the effective date~~Company will collect substantially all of the ~~standard~~consideration to which it is entitled in exchange for the goods and services it transfers to the customer.

The Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between the time of transfer of the promised goods or services to the customer and the time the customer pays for these goods or services to be generally one year or less. The Company’s credit terms to customers are in average between thirty and one hundred and fifty days.

Nature of Revenue Streams

The Company has four main revenue streams, which are License fees, POCare development services, cell process development services, including hospital supplies, and POCare cell processing.

License fees

Revenue recognized under license fees are recognized upon the confirmation of licensee of milestones completed and certainty of payment of the license fee.

POCare Development Services

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

The Company recognizes revenue when, or as, it satisfies a performance obligation. At contract inception, the Company determines whether the services are transferred over time or at a point in time. Performance obligations that have no alternative use and that the Company has 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 ~~one year,~~the Company at a point of time (upon completion). Revenues from support services provided to the Company’s customers are recognized as and when the services are provided, because the customer simultaneously receives and consumes the benefits provided.

Significant Judgement and Estimates

Significant judgment is required toidentifying 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 the Company, which results in revenue recognized upon completion, and which performance obligations are transferred to the customer over time, and the estimate of credit losses.

F-16

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 competitors of the Company. 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 the Company’s normal pricing practices when sold separately with consideration of market conditions and other factors, including customer demographics and geographic location.

The Company measures 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 performance of services to hospitals or other medical providers. Revenue is earned and recognized when product and services are received by the customer.

POCare Cell Processing

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

Change Orders

Changes in the scope of work are common and can result in a change in transaction price, equipment used and payment terms. Change orders are evaluated on a contract-by-contract basis to determine if they should be accounted for as a new ~~standard being effective~~contract or as part of the existing contract. Generally, services from change orders are not distinct from the original performance obligation. As a result, the effect that the contract modification has on the contract revenue, and measure of progress, is recognized as an adjustment to revenue when they occur.

v.Leases

The Company determines if an arrangement is a lease at inception. Lease classification is governed by five criteria in ASC 842-10-25-2. If any of these five criteria is met, The Company classifies the lease as a finance lease; otherwise, the Company classifies the lease as an operating lease. When determining lease classification, the Company’s approach in assessing two of the mentioned criteria is: (i) generally 75% or more of the remaining economic life of the underlying asset is a major part of the remaining economic life of that underlying asset; and (ii) generally 90% or more of the fair value of the underlying asset comprises substantially all of the fair value of the underlying asset.

Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheet.

Finance leases are included in property, plants and equipment, net and finance lease liabilities in the consolidated balance sheet.

ROU assets represent Orgenesis’ right to use an underlying asset for the ~~Company~~lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the ~~beginning~~commencement date based on the present value of lease payments over the lease term. The Company uses its ~~first quarter~~incremental borrowing rate based on the information available at the commencement date to determine the present value of ~~fiscal year 2018.~~ the lease payments.

F-17

The standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases with a term shorter than 12 months. This means that for those leases, the Company does not recognize ROU assets or lease liabilities but recognizes lease expenses over the lease term on a straight-line basis.

Lease terms will include options to extend or terminate the lease when it is reasonably certain that Orgenesis will exercise or not exercise the option to renew or terminate the lease.

w.Segment reporting

Since the Metalmark Investment, the Company’s business includes two reporting segments: Octomera and Therapies. See note 5.

x.Recently adopted accounting pronouncements

In ~~addition, during March, April and May~~June 2016, the FASB issued ASU ~~No. 2016-08,~~2016-13 “Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance will be effective for Smaller Reporting Companies (SRCs, as defined by the SEC) for the fiscal year beginning on January 1, 2023, including interim periods within that year. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08 “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with ~~Customers : Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations~~Customers. The guidance will result in the acquirer recognizing contract assets and ~~Licensing and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, respectively, which clarified~~contract liabilities at the same amounts recorded by the acquiree. The guidance should be applied prospectively to acquisitions occurring on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability and presentation of sales taxes. The FASB also agreed to allow entities to choose to adoptor after the ~~standard as of the original~~ effective date. ~~As applicable for the Company, the effective date for adopting the ASU~~The guidance is for the year ending November 30, 2019. The Company is currently evaluating the impact of adopting ASU 2014-09 on its financial position, results of operations and related disclosures and has notyet determined whether the effect of the revenue portion will be material.

~~In January 2016, the FASB issued ASU 2016-01,~~~~Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities~~. The pronouncement requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes become effective for the Company's fiscal year beginning November 30, 2019. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.

~~F-15~~

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, ~~2018 and~~2022, including interim periods within those fiscal years. Early ~~application~~adoption is permitted, including in interim periods, for all entities. As applicable for the Company, the effective date for adopting the ASU is for the year ending November 30, 2019. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief.any financial statements that have not yet been issued. The ~~Company is currently evaluating the impact~~adoption of this ~~new standard~~guidance did not have a material impact on ~~its~~the Company’s consolidated financial statements.

~~In June 2016,~~

y.Recently issued accounting pronouncements, not yet adopted

On August 23, 2023, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) "Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets heldguidance requiring a joint venture to initially measure all contributions received upon its formation at ~~amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model~~fair value. This accounting will largely be consistent with ~~an expected loss methodology, which will result in more timely recognition of credit losses. As applicable for the Company, the effective date for adopting~~ASC 805, Business Combinations, although there are some specific exceptions. Before the ASU, there was no authoritative guidance in US GAAP that addressed how a joint venture should recognize contributions received. As a result, there has been diversity in practice, with some joint ventures accounting for contributions received at carry over basis and others at fair value. This new guidance is ~~for the year ending November 30, 2020. The Company is currently~~intended to reduce diversity in ~~the process of evaluating the impact~~practice and provide users of the joint venture’s financial statements with more decision-useful information. It may also reduce the amount of basis differences that an investor in a joint venture needs to track. The new guidance should be applied prospectively and is effective for all newly-formed joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. The adoption of ~~ASU 2016-13~~this guidance will not have a material impact on ~~its~~the Company’s consolidated financial statements.

In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2017-01, "Business Combinations (Topic 805) Clarifying the Definition of a Business" ("ASU 2017-01") which amended the existing FASB Accounting Standards Codification. The standard provides additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting, including acquisitions, disposals, goodwill, and consolidation. As applicable for the Company, the effective date for adopting the ASU is for the year ending November ~~30, 2019. The Company is currently assessing the impact that this updated standard will have on the consolidated financial statements.~~

~~In January 2017,~~2023, the FASB issued ASU ~~No. 2017-04, Intangibles-Goodwill~~2023-07 “Segment Reporting: Improvements to Reportable Segment Disclosures”. This guidance expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and ~~Other (Topic 350): Simplifying the Test~~included within each reported measure of segment profit or loss, an amount and description of its composition for ~~Goodwill Impairment, which simplifies the goodwill impairment test by eliminating the need to determine the fair value of individual assets~~other segment items, and ~~liabilities~~interim disclosures of a ~~reporting unit to measure goodwill impairment.~~reportable segment’s profit or loss and assets. The same impairment assessment applies to all reporting units including those with zero or negative carrying amounts. A goodwill impairment will represent the excess of a reporting unit's carrying amount over its fair value. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment testguidance is necessary. The amendments in ASU No. 2017-04 should be applied on a prospective basis. Disclosure of the nature and reason for the change in accounting principle upon transition is required. For public business entities, the amendments in this ASU are effective for ~~annual or interim goodwill impairments tests in~~ fiscal years beginning after December 15, ~~2019. As applicable for the Company, the effective date for adopting the ASU is for the year ending November 30, 2019. Early~~2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption ~~is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.~~permitted. The amendments are required to be applied retrospectively to all prior periods presented in an entity’s financial statements. The Company is currently evaluating this guidance to determine the impact ~~of this new standard~~it may have on its consolidated financial ~~statements.~~statements related disclosures.

~~F-16~~

F-18

In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the U.S. and in foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.

NOTE 3 – REDEEMABLE NON-CONTROLLING INTEREST AND DECONSOLIDATION

Metalmark Investment in Octomera LLC

On November 4, 2022, the Company and MM OS Holdings, L.P. (“MM”), an affiliate of Metalmark Capital Partners (“Metalmark”), entered into a series of definitive agreements (“MM agreement”) intended to finance, strengthen and expand the Company’s POCare Services business (the “Metalmark Investment”).

Pursuant to the Unit Purchase Agreement (the “UPA”), MM agreed to purchase 3,019,651 Class A Preferred Units of Octomera (the “Class A Units”), which represented 22.31% of the outstanding equity interests of Octomera following the initial closing, for a purchase price of $30,196 thousand, comprised of (i) $20,000 thousand of cash consideration and (ii) the conversion of $10,200 thousand of MM’s then-outstanding senior secured convertible loans previously entered into with MM pursuant to that certain Senior Secured Convertible Loan Agreement, dated as of August 15, 2022, between MM, Octomera and the Company. The investment was made at a pre-money valuation of $125,000,000, subject to customary adjustments for debt and accounts receivable and an adjustment related to a certain intercompany loan and closed on November 14, 2022. Following the initial closing, the Company held 77.69% of the issued and outstanding equity interests of Octomera.

If (a) Octomera and its subsidiaries generate Net Revenue (as defined in the UPA) equal to or greater than $30,000,000 during the twelve month period ending December 31, 2022 (the “First Milestone”) and/or equal to or greater than $50,000,000 during the twelve month period ending December 31 2023 (the “Second Milestone”), and (b) the Company’s shareholders approve the LLC Agreement Terms (as defined below under “Principal Terms of the LLC Agreement”) on the earlier of (x) the date that is seven (7) months following the initial closing date and (y) the date of the Company’s 2023 annual meeting of its shareholders (such stockholder approval hereafter being the “Orgenesis Stockholder Approval” and such Orgenesis Stockholder Approval deadline hereafter being the “Stockholder Approval Deadline”), in accordance with applicable law and in a manner that will ensure that MM is able to exercise its rights under the LLC Agreement (as defined below) without any further action or approval by MM, then MM will pay up to $10,000,000 in cash in exchange for 1,000,000 additional Class A Units if the First Milestone is achieved and $10,000,000 in cash in exchange for 1,000,000 Class B Units Preferred Units of Octomera (the “Class B Units”) if the Second Milestone is achieved.

The Company’s stockholders approved the LLC agreement terms at its annual meeting of stockholders held in June 2023. However, Octomera and its subsidiaries did not meet the Net Revenue milestones for either of the years ended December 31, 2022 and 2023. During 2023, the Company and MM entered into various amendments to the Unit Purchase Agreement, dated November 4, 2022 (the “UPA”). Pursuant to such amendments, MM or the Company as the case may be, agreed to pay certain amounts in exchange for Class A Preferred Units of Octomera to support the continued expansion of Orgenesis’ POCare Services (the “Subsequent Investment”). In the case of MM investments, the investment amount of the First Future Investment (as defined in the UPA) was reduced by the amount of the Subsequent Investment. MM invested $6,500 for 650,000 additional Class A units during 2023, and the Company, pursuant to agreement with MM also invested $660 for 66,010 additional Class A units during 2023.

F-19

The Preferred Units have voting rights, may be converted into ordinary shares, and are prioritized over ordinary shares in case of dividend or redemption. The Company considers the provisions of Accounting Standards Codification Distinguishing Liabilities from Equity (“ASC 480”) in order to determine whether the Preferred Units should be classified as a liability. If the instrument is not within the scope of ASC 480, the Company further analyzes the instrument’s characteristics in order to determine whether it should be classified within temporary equity (mezzanine) or within permanent equity in accordance with the provisions of ASC 480-10-S99. The preferred units are not mandatorily or currently redeemable. However, they include a liquidation or deemed liquidation event that would constitute a redemption event that is outside of the Company’s control. As such, all redeemable preferred units have been presented outside of permanent equity as a redeemable non-controlling interest.

The Company further analyzed and concluded that the future Preferred Units investments are considered embedded in the initial Preferred Units that were issued and are considered clearly and closely related to the host instrument and therefore should not be bifurcated.

As a result of the deconsolidation (see Note 1a), the Company recorded a net loss of $5,343, representing the difference between the fair value of the retained interest in Octomera and the net assets deconsolidated in the transaction as follows:

SCHEDULE OF FAIR VALUE OF RETAINED EARNINGS


		(in thousands)
Fair value of the retained interest in Octomera	$	-
Net assets deconsolidated		4,959
Release of translation adjustment		384
Net profit	$	5,343

The change in board composition does not constitute a strategic shift from the Company’s perspective and therefore the Company did not treat the deconsolidation as a discontinued operation.

Following the Amendment No. 2, the Company accounted for its investment in Octomera according to the equity method in accordance with ASC Topic 323, as it has retained the ability to exercise significant influence but does not control the entity. The Company thus recognized an equity method investment in a total amount of $0 comprised of the assumed fair value of the Octomera shares held by the Company. Following the deconsolidation, the Company recognized related party balances that are disclosed on the face of the Company’s balance sheet.

In evaluating the fair value of the Octomera Equity Investment under the income approach, the Company used a discounted cash flow model of the business, adjusted to the Company’s share in the investment. Key assumptions used to determine the estimated fair value included: (a) internal cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs to produce, operating profit margins and estimated capital needs; (b) an estimated terminal value using a terminal year long-term future growth determined based on the growth prospects of the reporting units; and (c) a discount rate which reflects the weighted average cost of capital adjusted for the relevant risk associated with the Company’s reporting unit operations and the uncertainty inherent in the Company’s internally developed forecasts. The allocation of the purchase price to the net assets acquired and liabilities assumed resulted in the recognition of other intangible assets, net, which comprised of technology. The useful life of the technology for amortization purposes was determined by considering the period of expected cash flows generated by the assets used to measure the fair value of the intangible assets, adjusted as appropriate for the entity-specific factors including legal, regulatory, contractual, competitive, economic, or other factors that may limit the useful life of intangible assets.

F-20

The following table represents the deconsolidated amounts from the Company’s Balance Sheet at the date of deconsolidation:

SCHEDULE OF NET ASSETS DECONSOLIDATED


			(in thousands)
ASSETS:
Cash and cash equivalents			973
Other current assets			9,087
Non-current assets			31,935
TOTAL ASSETS			41,995

LIABILITIES:
Current liabilities			6,566
Long-term liabilities			2,313
TOTAL LIABILITIES			8,879

REDEEMABLE NON-CONTROLLING INTEREST			26,797

NON-CONTROLLING INTEREST			1,360

NET ASSETS DECONSOLIDATED			4,959

On January 29, 2024, the Company and MM entered into a Unit Purchase Agreement (the “UPA”), pursuant to which the Company acquired all of the equity interests of Octomera that were owned by MM (the “Acquisition”). In consideration for such Acquisition, the Company and MM agreed to the following consideration:

Royalty Payments: If Octomera and its subsidiaries generate Net Revenue during the three year period (2025-2027), then the Company will pay 5% of Net Revenues to MM pursuant to the UPA.

Milestone Payments: If the Company sells 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, the Company shall pay Seller 5% of the net proceeds.

Pursuant to the acquisition, MM’s designated members of the Board of Managers of Octomera resigned and the Company amended the Second Amended and Restated Limited Liability Company Agreement of Octomera to be a single member agreement to reflect the transactions contemplated by the UPA so that MM shall no longer (i) be a party to such agreement, (ii) have a right to appoint members of the board of managers of Octomera or (iii) be a member of Octomera.

In addition, the outstanding indebtedness payable from Orgenesis Maryland LLC to MM pursuant to an aggregate of 10 secured promissory notes (the “Notes”) with a collective original principal amount of $2,600, were amended to, among other things, extend the maturity thereof to January 29, 2034 and to terminate the security interest granted by Orgenesis Maryland in favor of MM that secured the obligations under the Notes.

NOTE 4 – EQUITY INVESTMENTS AND LOANS TO ASSOCIATES

As of December 31, 2023, and December 31, 2022, the balances of our equity-method investments were $8 and $39, respectively, and are as follows:

a.	Octomera LLC

The Company owned approximately 75% of Octomera as of December 31, 2023. As at the date of the filing of this report the Company owns 100% of Octomera.

As of December 31, 2023, the balance of our equity-method investment related to Octomera was approximately $0. Through December 31, 2023, the Company’s share in Octomera’s net loss was $660. The Company did not provide for additional losses once the investment was reduced to zero since the Company did not guarantee obligations of Octomera and is not otherwise committed to provide further financial support to Octomera. Losses not provided for accumulated to $9,355.

F-21

The following table presents summarized results of operations for the six months since the date of deconsolidation:

SUMMARY OF RESULTS OF OPERATIONS

	Six-Months Ended
	December 31, 2023
Total revenue	$	53
Gross loss	$	5,010
Net loss	$	20,145

b.	Butterfly Biosciences Sarl

During 2020, the Company and Kidney Cure (“KC”), pursuant to the Kidney Cure JVA incorporated the KC JV Entity known as Butterfly Biosciences Sarl (“BB”) in Switzerland. BB will be involved in the (i) implementation of a point-of-care strategy; (ii) assessment of the options for development and manufacture of various cell-based types (including kidney derived cells, MSC cells, exosomes, gene therapies) development; and (iii) development of protocols and tests for kidney therapies. The Company holds a 49% participating interest in BB and Kidney Cure holds the remaining 51%. Due to the Company’s significant influence over the JVE the Company applies the equity method of accounting. During the twelve months ended December 31, 2023, no significant developments were made under the KC JV and KC and the Company decided to terminate the KC JVA and liquidate BB. As of December 31, 2023, BB was not yet liquidated.

RevaCel

During 2021, the Company and Revatis S.A (“Revatis”), pursuant to the Revatis JVA (See Note 11) incorporated the Revatis JV Entity known as RevaCel Srl (“RevaCel”) in Belgium. RevaCel will develop products in the field of muscle-derived mesenchymal stem/progenitor cells. The Company holds a 51% participating interest in RevaCel and Revatis holds the remaining 49% and is entitled to appoint 2 of the 5 members of RevaCel’s board. Due to the Company’s significant influence over the JVE, the Company applies the equity method of accounting and is treated as an associated company. As part of the Revatis JVA, the Company and Revacel, the Company agreed to loan Revacel up to 2 million Euro at an annual interest rate of 8%. The loan is repayable in January 2025, and if not repaid, may be converted into shares of Revacel. As of the date of this Annual Report on Form 10-K, the Company had not made any transfers under the Revacel loan.

The table below sets forth a summary of the changes in the investments and loans for the years ended December 31, 2023 and December 31, 2022

SCHEDULE OF CHANGES IN INVESTMENTS AND LOAN

	2023			2022
	December 31,
	2023			2022
	(in thousands)

Opening balance	$	135		$	584
Investments during the period		660			-
Loan granted to associates		-			4,131
Repayment of loan		(55	)		-
Business Combinations		-			(3,156	)
Fair value of the retained interest in Octomera (see Note 3)		-			-
Interest from loans to associates		-			161
Share in net loss of associated companies		(734	)		(1,508	)
Exchange rate differences		2			(77	)
Total	$	8		$	135

F-22

NOTE ~~3 -~~ 5 – SEGMENT INFORMATION

The Octomera operations segment includes mainly POCare Services, while the Therapies segment includes the Company’s therapeutic development operations. The segment information includes all the results of the Octomera segment up to the effective date of deconsolidation.

Because the Company conducted all its operations as one segment prior to the Metalmark Investment, the above changes were reflected through retroactive revision of prior period segment information based on the subsidiaries that were transferred to Octomera. Certain activities of these subsidiaries have changed after they were transferred to Octomera operations segment.

The Company’s Chief Executive Officer ~~("CEO"~~(“CEO”), who is the ~~Company’s~~ chief operating ~~decision-maker ("CODM"~~decision maker (“CODM”)~~. Following the acquisition of MaSTherCell, management has determined that there are two operating segments, based~~, reviews financial information prepared on ~~the Company's organizational structure, its business activities~~a consolidated basis, accompanied by disaggregated information about revenues and ~~information reviewed~~contributed profit by the ~~CODM for~~two identified reportable segments, namely Octomera and Therapies, to make decisions about resources to be allocated to the ~~purposes of allocating resources~~segments and ~~assessing~~assess their performance.

~~CDMO~~

The CDMO activity is operated by MaSTherCell, which specializes in cell therapy development for advanced medicinal products. MaSTherCell is providing two types of services to its customers: (i) process and assay development services and (ii) GMP contract manufacturing services. The CDMO segment includes only the results of MaSTherCell.

~~CT Business~~

The CT Business activity is based on our technology that demonstrates the capacity to induce a shift in the developmental fate of cells from the liver and differentiating (converting) them into “pancreatic beta cell-like” insulin producing cells for patients with Type 1 Diabetes. This segment is comprised of all entities aside from MaSTherCell.

~~The CODM~~Company does not ~~reviews~~review assets by ~~segment, therefore~~segment. Therefore, the measure of assets has not been disclosed for each segment.

Segment data for the year ended ~~November 30, 2017~~December 31, 2023 is as follows:

Corporate
CT and
CDMO Business Eliminations Consolidated
(in thousands)
Revenues from external customers $ 11,484 $ - $ (1,395 ) $ 10,089
Cost of revenues (6,356 ) 638 (5,718 )
Gross profit 5,128 - (757 ) 4,371
Research and development expenses, net (2,517 ) 757 (1,760 )
Operating expenses (4,699 ) (3,335 ) (8,034 )
Operating profit 429 (5,852 ) - (5,423 )
Adjustments to presentation of segment
Adjusted EBIT
Depreciation and amortization (2,720 ) (6 )
Segment performance (2,291 ) (5,858 )

~~F-17~~SCHEDULE OF SEGMENT REPORTING

	Octomera			Therapies			Eliminations			Consolidated
	(in thousands)
Revenues	$	68		$	515		$	(53	)	$	530
Cost of revenues*		(9,505	)		(690	)		4,421			(5,774	)
Gross profit (loss)		(9,437	)		(175	)		4,368			(5,244	)
Cost of development services and research and development expenses*		(9,211	)		(5,811	)		4,711			(10,311	)
Operating expenses*		(37,878	)		(7,102	)		9,892			(35,088	)
Impairment of investment		-			(699	)		-			(699	)
Share in net income of associated companies		-			(74	)		(660	)		(734	)
Profit from deconsolidation		-			-			(5,343	)		(5,343	)
Other income, net		1			3			-			4
Depreciation and amortization		(1,765	)		(782	)		987			(1,560	)
Credit loss on convertible loan receivable		-			(2,688	)		-			(2,688	)
Loss from extinguishment in connection with convertible loan		-			(283	)		-			(283	)
Financial Expenses, net		(573	)		(2,004	)		78			(2,499	)
Income (loss) before income taxes	$	(58,863	)	$	(19,615	)	$	14,033		$	(64,445	)

~~Reconciliation of segment performance to loss for the year:~~

*		~~Year ended~~
		~~November 30,~~
		~~2017~~
		~~in thousands~~
~~Segment subtotal performance~~		~~(8,149~~	)
~~Stock-based compensation~~		~~(3,364~~	)
~~Financial income (expenses), net~~		~~(950~~	)
~~Share in losses of associated companies~~		~~(1,214~~	)
~~Loss before income tax~~	$	~~(13,677~~	)Excluding Depreciation, amortization and impairment expenses

F-23

Segment data for the year ended ~~November 30, 2016~~December 31, 2022 is as follows:

Corporate
and
CDMO CTB Eliminations Consolidated
(in thousands)
Revenues from external customers $ 6,853 $ - $ (456 ) $ 6,397
Cost of revenues (6,915 ) 557 (6,358 )
Gross profit (62 ) - 101 39
Research and development expenses, net (1,725 ) (101 ) (1,826 )
Operating expenses (2,239 ) (1,667 ) (3,906 )
Operating profit (2,301 ) (3,392 ) - (5,693 )
Adjustments to presentation of segment
Adjusted EBIT
Depreciation and amortization (2,918 ) (5 )
Segment performance (5,219 ) (3,397 ) -

~~Reconciliation~~

	Octomera			Therapies			Eliminations			Consolidated
	(in thousands)
Revenues	$	33,884		$	6,432		$	(5,575	)	$	34,741
Revenues from related party		1,284			-			-			1,284
Total revenues		35,168			6,432			(5,575	)		36,025
Cost of revenues*		(4,048	)		(1,088	)		(356	)		(5,492	)
Gross profit (loss)		31,120			5,344			(5,931	)		30,533
Cost of development services and research and development expenses*		(13,325	)		(12,262	)		4,319			(21,268	)
Operating expenses*		(7,762	)		(8,678	)		900			(15,540	)
Impairment expenses		(420	)		(641	)		-			(1,061	)
Share in net income of associated companies		(1,352	)		(156	)		-			(1,508	)
Other income, net		168			5			-			173
Depreciation and amortization		(1,006	)		(972	)		-			(1,978	)
Loss from extinguishment in connection with convertible loan		-			(52	)		-			(52	)
Financial Expenses, net		(1,748	)		(223	)		-			(1,971	)
Income (loss) before income taxes	$	5,675		$	(17,635	)	$	-		$	(11,960	)

*	Excluding Depreciation, amortization and impairment expenses

NOTE 6 – EQUITY

a.	Financings

In March 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement) with certain investors (collectively, the “Investors”), pursuant to which the Company agreed to issue and sell to the Investors, in a private placement (the “Offering”), shares of ~~segment performance~~the Company’s Common Stock at a purchase price of $3.00 per share and warrants to ~~loss~~purchase shares of Common Stock at an exercise price of $4.50 per share. The warrants were not exercisable until after six months and expire three years from the date of issuance. The Company received proceeds of $2.175 million from the Offering and issued an aggregate of 724,999 shares of Common Stock and warrants to purchase 146,959 shares of Common Stock pursuant to the Purchase Agreement. In connection with the Purchase Agreement, the Company and the Investors entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the Company has agreed to register the resale of the Shares and Underlying Shares on a registration statement on Form S-3 (the “Registration Statement”) to be filed with the United States Securities and Exchange Commission (the “SEC”). See note 6 b (Amendment, Consent and Waiver Agreement).

On February 23, 2023, the Company entered into a securities purchase agreement with certain institutional and accredited investors relating to the issuance and sale of 1,947,368 shares of Common Stock and warrants to purchase up to 973,684 shares of Common Stock (the “Warrants”) at a purchase price of $1.90 per share of Common Stock and accompanying Warrants in a registered direct offering (the “February 2023 Offering”). The February 2023 Offering closed on February 27, 2023.

The Warrants had an exercise price of $1.90 per share, were exercisable immediately and were to expire five years following the date of issuance.The Warrants had an alternate cashless exercise option (beginning on or after the earlier of (a) the thirty-day anniversary of the date of the Purchase Agreement and (b) the date on which the aggregate composite trading volume of Common Stock following the public announcement of the pricing terms exceeds 13,600,000 shares), to receive an aggregate number of shares equal to the product of (x) the aggregate number of shares of Common Stock that would be issuable upon a cash exercise and (y) 1.0. The aggregate gross proceeds to the Company from the Offering were $3,700, before deducting placement agent cash fees equal to 7.0% of the gross proceeds received and other expenses payable by the Company.

All of the Warrants were exercised using the alternate cashless exercise option described above.

On August 31, 2023, the Company entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which the Company agreed to issue and sell, in a private placement (the “August 2023 Offering”), 2,000,000 shares of the Company’s Common Stock at a purchase price of $0.50 per share. The Company received proceeds of $1,000. The August 2023 Offering closed on August 31, 2023.

On November 8, 2023, the Company entered into a Securities Purchase Agreement with an institutional investor, pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the investor (the “November 2023 Offering”), (i) 1,410,256 shares of Common Stock, and (ii) warrants exercisable for 1,410,256 shares of Common Stock. The combined offering price for each share and accompanying warrant was $0.78. The warrants will be exercisable immediately following the ~~year:~~date of issuance and may be exercised for a period of five years from the initial exercisability date at an exercise price of $0.78 per share. The exercise prices and numbers of shares of Common Stock issuable upon exercise of the warrants will be subject to adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the Company’s Common Stock. The Company received net proceeds of $942 after deducting $158 related transaction fees. The November 2023 Offering closed on November 9, 2023.

F-24

On March 8, 2024, the institutional investor exercised 25,000 warrants at the $0.78 exercise price.

~~Year ended~~

Warrants

A summary of the Company’s warrants granted to investors and as finder’s fees as of December 31, 2023, and December 31, 2022 and changes for the periods then ended is presented below:

SCHEDULE OF WARRANTS ACTIVITY

	December 31,
	2023					2022
	Number of Warrants			Weighted Average Exercise Price $		Number of Warrants			Weighted Average Exercise Price $
Warrants outstanding at the beginning of the period		5,381,460			4.41		3,042,521			6.09
Changes during the period:
Issued		2,891,245			1.46		2,978,575			3.16
Exercised		(973,684	)		1.90		-			-
Expired		(1,456,979	)		5.63		(639,636	)		6.58
Warrants outstanding and exercisable at end of the period*		5,842,042			3.06		5,381,460			4.41

Amendment, Consent and Waiver Agreement

In October and November 2022, the Company and certain investors that were parties to the Securities Purchase Agreement of March 2022 (the “SPA”) and the Registration Rights Agreement of March 2022 (the “RRA”), entered into an Amendment, Consent and Waiver Agreement (the “RRA Amendment”). Pursuant to the RRA Amendment, the Company and the investors agreed to an extension of the date for filing the Registration Statement to register the Registrable Securities (as defined in the RRA) to April 3, 2023 and the effective date of such Registration Statement as provided for in the RRA Amendment; and (to) waive any potential damages or claims under the RRA with respect to the Company’s obligations under the RRA or SPA and release the Company therefrom. In consideration for such consent, agreement, waiver and release, the Company agreed to issue additional warrants to purchase an aggregate of 215,502 shares of Common Stock to the investors (the “Additional PIPE Warrants”) and such Additional PIPE Warrants shall have an exercise price of $2.50 per share of Common Stock, be exercisable beginning six months and one day after the applicable effective date and ending 36 months after the applicable effective date and be in the same form as the original Warrants issued pursuant to the SPA.

	c.	~~November 30,~~
		~~2016~~
		~~in thousands~~
~~Segment performance~~		~~(8,616~~	)
~~Stock-based compensation~~		~~(2,661~~	)
~~Financial income (expenses), net~~		~~(1,260~~	)
~~Share in losses~~Purchase of ~~associated company~~		~~(123~~	)
~~Loss before income tax~~	$	~~(12,660~~	)Mida Biotech BV

~~Geographic, Product~~

During February 2022, pursuant to the joint venture agreement between the Company and ~~Customer Information~~

~~Substantially~~Mida Biotech BV (“Mida”), the Company purchased all the ~~Company's revenues and long-lived assets are located in Belgium through its subsidiary, MaSTherCell. Net revenues from single customers from~~issued shares of Mida for a consideration of $100 thousand. In lieu of cash, the ~~CDMO segment that exceed 10%~~consideration was paid via 29,940 Company shares of ~~total net revenues are:~~Common Stock issued to Mida Biotech BV’s shareholders. In connection with the acquisition of Mida, the Company issued 29,940 Common Stock to Mida’s shareholders.

~~F-18~~

Year Ended Year Ended
November 30, November 30,
2017 2016
(in thousands)
Customer A $ 4,115 $ 3,754
Customer B $ 47 $ 1,742
Customer C $ 2,837
Customer D $ 2,055

The CDMO business has substantially diversified revenues by source signing contracts with biotech companies in their respective cell-based therapy field. In January 2017, MaSTherCell entered into a service agreement with Les Laboratoires Servier (“Servier”) for the development of its CAR T-cell therapy manufacturing platform and in June 2017, MaSTherCell entered into a service agreement with CRISPR Therapeutics AG (“CRISPR”) for the development and manufacturing of allogeneic cell therapies.

NOTE 47 – PROPERTY, PLANTS AND EQUIPMENT

The following table represents the components of property, plants and equipment:

SCHEDULE OF COMPONENTS OF PROPERTY, PLANT AND EQUIPMENT

	2023			2022
	December 31,
	2023			2022
	(in thousands)
Cost:
Production facility	$	55		$	3,944
Office furniture and computers		242			589
Lab equipment		1,061			4,811
Advance payment		692			17,442
Subtotal		2,050			26,786
Less – accumulated depreciation		(575	)		(3,952	)
Total	$	1,475		$	22,834

November 30,
2017 2016
(in thousands)
Cost:
Production facility $ 6,246 $ 4,403
Office furniture and computers 353 211
Lab equipment 2,039 1,491
8,638 6,105
Less – accumulated depreciation (3,534 ) (1,532 )
Total $ 5,104 $ 4,573

F-25

Depreciation expense for the years ended ~~November 30, 2017~~December 31, 2023 and ~~2016 was $1,096~~December 31, 2022 were $839 thousand and ~~$1,160~~$1,067 thousand, respectively.

~~NOTE 5 – INVESTMENTS IN ASSOCIATES, NET~~

~~(a) On May 10, 2016, the Company~~Property, plants and Atvio entered into the Atvio JVA pursuant to which the parties agreed to collaborate in the contract development and manufacturing of cell and virus therapy products in the field of regenerative medicine in Israel. The parties pursue the joint venture through Atvio, in which the Company has a 50% participating interest therein in any and all rights and obligations and in any and all profits and losses.equipment, net by geographical location were as follows:

Under the Atvio JVA, Atvio has procured, at its sole expense, a GMP facility and appropriate staff in Israel. The Company shares with Atvio the Company’s know-how in the field of cell therapy manufacturing, which know-how will not include the intellectual property included in the license from the Tel Hashomer Hospital in Israel to the Israeli Subsidiary. Atvio's operations commenced in September 2016.SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT BY GEOGRAPHICAL AXIS

Through November 30, 2017, the Company remitted to Atvio $1 million under the terms of the Atvio JVA to defray the costs associated with the setting up and the maintenance of the GMP facility. The Company’s funding was made by way of a convertible loan to Atvio, which shall be convertible at the Company’s option at any time into 50% of the then outstanding equity immediately following such conversion. The Company concluded that, based on the terms of the agreement, it has the ability to exercise significant influence in Atvio, but does not have control. Therefore, the investment is accounted for under the equity method.

In addition, at any time following the first anniversary year of the Effective Date the Company has the option to require the Atvio shareholders to transfer to the Company the entirety of their interest in Atvio for the consideration specified in the agreement. Within three years from the Effective Date, the Atvio shareholders have the option to require the Company to purchase from Atvio’s shareholders their entire interest in Atvio for the consideration based on Atvio's valuation mechanism as specified in the agreement. The above-mentioned options are accounted as derivatives and measured at fair value and presented in the balance sheet in "put/call option derivative" line item (See Note 15).

~~F-19~~

(b) On March 14, 2016, Orgenesis Inc. and CureCell entered into the CureCell JVA, pursuant to which the parties are collaborating in the contract development and manufacturing of cell therapy products in Korea.

Under the CureCell JVA, CureCell has procured, at its sole expense, a GMP facility and appropriate staff in Korea for the manufacture of the cell therapy products. The Company will share with CureCell the Company’s know-how in the field of cell therapy manufacturing, which know-how does not include the intellectual property included in the license from the THM to the Israeli subsidiary. As of November 30, 2017, all obligations were fulfilled by the parties and the JV Company was established under the CureCell JVA agreement and each party has 50% from the participating interest and in any and all profits and losses of the JV Company subject to the fulfillment by each Party of his obligations under the CureCell JVA.

Under the CureCell JVA, the Company and CureCell each undertook to remit, within two years of the execution of the CureCell JVA, minimum amount of $2 million to the JV Company, of which $1 million is to be in cash and the balance may be in an in-kind investment, the scope and valuation of which shall be preapproved in writing by CureCell and the Company. The Company’s funding was made by way of a convertible loan. The CureCell JVA provides that, under certain specified conditions, the Company can require CureCell to sell to the Company its participating (including equity) interest in the JV Company in consideration for the issuance of the Company’s common stock based on the then valuation of the JV Company. Through November 30, 2017, the Company remitted to CureCell $2.1 million.

~~(c) The table below sets forth a summary of the changes in the investments for the years ended November 30, 2017 and 2016:~~

November 30, November 30,
2017 2016
(In thousands) (In thousands)

Opening balance $ (12 ) $ -
Reclass from short-term receivables * 118
Investments during the period 2,429 111
Share in losses (1,214 ) (123 )
$ 1,321 $ (12 )

*As of November 30, 2016, prior to the formal incorporation of the CureCell JV company, the actual joint operations already began. The amounts transferred to CureCell by the Company on account of the investment and the share in loss were recorded as short-term receivables, and Company's share in the expenses incurred through balance sheet date was recorded by the Company as part of its selling, general and administrative expenses.

	2023		2022
	December 31,
	2023		2022
	(in thousands)

Belgium	$	29	$	1,095
Greece		-		858
Netherlands		289		380
Korea		-		466
Israel		56		2,284
U.S.		1,101		17,751
Total	$	1,475	$	22,834
Property, plants and equipment, net	$	1,475	$	22,834

NOTE 68 – INTANGIBLE ASSETS AND GOODWILL

Changes in the carrying amount of the Company’s goodwill for the years ended ~~November 30, 2017~~December 31, 2023 and ~~2016~~2022 are as follows:

		~~(in thousands)~~
~~Goodwill as of November 30, 2015~~	$	~~9,535~~
~~Translation differences~~		49
~~Goodwill as of November 30, 2016~~		~~9,584~~
~~Translation differences~~		~~1,100~~
~~Goodwill as of November 30, 2017~~	$	~~10,684~~

~~F-20~~SCHEDULE OF GOODWILL

	(in thousands)
Goodwill as of December 31, 2021	$	8,403
Translation differences		(216	)
Goodwill as of December 31, 2022	$	8,187
Deconsolidation of Octomera		(6,815	)
Translation differences		(161	)
Goodwill as of December 31, 2023	$	1,211

Goodwill ~~Impairment~~impairment assessment for the year ended December 31, 2023

~~The Company reviews goodwill for impairment annually and whenever events or changes in circumstances indicate~~

As of December 31, 2022, the ~~carrying amount of goodwill may not be recoverable. The~~ Company performed ~~a quantitative two-step~~an impairment analysis for its reporting units. Based on the Company’s assessment, ~~for~~it was concluded that the fair value of each of the Octomera and Therapies reporting units exceeded their carrying amounts and therefore no goodwill impairment ~~for the CDMO unit.~~

was required. As ~~part~~ of ~~the first step of the two-step impairment test, the Company compared~~December 31, 2023 the fair value of the Therapies reporting ~~units to their carrying values and determined that the~~unit exceeded its carrying amount ~~of the units do not exceed their fair values. The Company estimated~~and therefore no goodwill impairment was required.

In evaluating the fair value of reporting units under the ~~unit by using an~~ income approach, ~~based on~~the Company used a discounted cash flows. The assumptions used to estimate the fair value of the Company’s reporting units were based on expected future cash flows and an estimated terminal value using a terminal year growth rate based on the growth prospects for each reporting unit. The Company used an applicable discount rate which reflected the associated specific risks for the CDMO unit future cash flows.

flow model. Key assumptions used to determine the estimated fair value ~~include:~~included: (a) ~~expected~~internal cash ~~flow~~flows forecasts for ~~the five-year period~~5 years following the ~~testing~~assessment date, ~~(including market share, sales volumes and prices,~~including expected revenue growth, costs to produce, operating profit margins and estimated capital ~~needs);~~needs; (b) an estimated terminal value using a terminal year long-term future growth ~~rate of 2%~~ determined based on the growth ~~prospects;~~prospects of the reporting units; and (c) a discount rate which reflects the weighted average cost of ~~16.6% and 15.3% . Based on~~capital adjusted for the relevant risk associated with the Company’s ~~assessment as of November 30, 2017 and 2016, respectively, the carrying amount of its~~ reporting unit ~~does not exceeds its fair value.~~

~~A decrease~~operations and the uncertainty inherent in the terminal year growth rate of 1% or an increase of 1% to the discount rate would reduce the fair value of the reporting unit by approximately $1.1 million and $2.3 million, respectively. These changes would not result in an impairment. A decreaseCompany’s internally developed forecasts.

Actual results may differ from those assumed in the ~~terminal year growth rate and an increase~~Company’s valuation method. It is reasonably possible that the Company’s assumptions described above could change in future periods. If any of these were to vary materially from the Company’s plans, it may record impairment of goodwill allocated to any of these reporting units in the ~~discount rate of 1% would reduce the fair value of the reporting unit by approximately $3.3 million. These changes would not result in an impairment.~~future.

F-26

Other Intangible Assets

Other intangible assets consisted of the following:

November 30, November 30,
2017 2016
(In thousands)
Gross Carrying Amount:
Know How $ 17,998 16,158
Customer relationships 369 331
Brand name 1,418 1,272
19,785 17,998
Accumulated amortization 4,734 2,948
Net carrying amount of other intangible assets $ 15,051 15,050

SCHEDULE OF OTHER INTANGIBLE ASSETS

	2023			2022
	December 31,
	2023			2022
	(in thousands)
Gross Carrying Amount:
Know How	$	-		$	2,735
Customer relationships		-			345
Technology		9,340			9,340
Subtotal		9,340			12,420
Less – Accumulated amortization		(1,965	)		(2,726	)
Net carrying amount of other intangible assets	$	7,375		$	9,694

Intangible ~~asset~~assets amortization expenses were approximately ~~$1.8 million~~$721 thousand and $911 thousand for ~~each of~~ the years ended ~~November 30, 2017~~December 31, 2023 and ~~2016.~~December 31, 2022, respectively.

Estimated aggregate amortization expenses for the five succeeding years ending ~~November 30~~on December 31^thst are as follows:

2018 2019 to 2022
(in thousands)
Amortization expenses $ 1,947 $ 7,790

~~F-21~~SCHEDULE OF ESTIMATED AGGREGATE AMORTIZATION EXPENSES

	2024		2025 to 2028
	(in thousands)
Amortization expenses	$	612	$	2,450

NOTE ~~7– CONVERTIBLE LOAN AGREEMENTS~~9 –LOANS

~~(a) During~~

On July 25, 2023, the ~~year ended~~Israeli subsidiary received a loan from an offshore investor in the amount of $175. The loan bears 8% annual interest and is repayable on January 1, 2024. The investor lent the subsidiary a further $150 interest free during October and November ~~30, 2015 and 2014,~~2023. In January 2024, the Company ~~entered into six convertible loan agreements with new investors for a total amount of $1 million (the “Convertible Loans”). The loans bear an annual interest rate of 6%.~~

~~On April 27, 2016~~ and ~~December 23, 2015,~~Lender agreed to extend the holders of all the Convertible Loans converted the principal amount and the accrued interest in amount of $1,018 thousand into units, with each unit comprising one share of the Company’s common stock and one three-year warrant to purchase an additional share of the Company’s common stock at an exercise price of $6.24. Upon conversion of the Convertible Loans, the Company issued an aggregate of 163,904 shares of Common stock and three year warrants to purchase up to an additional 163,904 shares. Furthermore, in the event that the Company will issue any common shares or securities convertible into common shares in a private placement for cash at a price less than $6.24 on or before December 23, 2016, the Company will issue to the subscribers, for no additional consideration, additional common stock. As of the date of the approval of these financial statements, the shares anti-dilution protection mechanism described above, has expired and no shares were issued under this provision.

(b) On April 27, 2016, the Company entered into an assignment and assumption of debt agreement with Nine Investments Ltd. (“Nine Investments”) and Admiral Ventures Inc. (“Admiral”). Pursuant to the terms of a Convertible Loan Agreement dated May 29, 2014, as amended on December 2014 (collectively, the "Loan Agreement"), Nine Investments assigned and transferred to Admiral all of the Company’s obligations for the outstanding amount of the Loan Agreement. Additional amendments to the provisions of the Loan Agreement were included the following:

~~(1)        Extending the due~~maturity date of the loan ~~of $1.5 million through September 30, 2016;~~
(2)        The Company paid to Admiral an extension fee in the form of 288,461 units, each unit was comprised of one common share and one, three-year warrant converted into one common share at an exercise price of $6.24 per common share. The fair value of the warrants as of the grant date was $34 thousand. Using the Black-Scholes model, the shares were valued at the fair value of the Company’s common stock as of April 27, 2016, or $3.36; and
~~(3)        The Company shall accrue additional interest totalling $55 thousand for the period from January 31, 2015~~amount to December 31, ~~2015. In addition, the interest rate shall be 12% per annum commencing from January 1, 2016.~~

2024. The Company ~~accounted for the above changes as an extinguishment of the old debt and issuance of a new debt. As a result, a loss of $229 thousand was recorded within financial expenses.~~

On February 27, 2017, the Company and Admiral entered into an agreement resolving the payment of amounts owed to Admiral. Under the terms of the agreement, Admiral extended the maturity date to June 30, 2018. The Company agreed to pay to Admiral, on or before March 1, 2017, between $0.3 million and $1.5 million. Further, beginning April 2017, the Company will make a monthly payment of $125 thousand on account of the remaining unpaid balance, and also remit 25% of all amounts received from equity financing raised above $1 million and 20% of such amounts above $500 thousand on account of amounts owed. The Company accounted for the above changes as a modification of the old debt. Upon an occurrence of a default, the loan bears interest at an annual rate of 15%.

During the year ended November 30, 2017, the Company repaid $1,875 thousand on account of the principal amount and accrued interest. In January 2018, the Company repaid the remaining of accrued interest in total amount of $177 thousand.

(c) On November 2, 2016 the Company entered into unsecured convertible note agreements with accredited or offshore investors for an aggregate amount of NIS 1 million ($262 thousand). The loan bears a monthly interest rate of 2% and mature on May 1, 2017, unless converted earlier. The holder, at its option, may convert the outstanding principal amount and accrued interest under this note into shares of the Company’s common stock at a per share conversion price of $6.24.

~~F-22~~

The Company allocated the principal amount of the convertible loan and the accrued interest thereon based on their fair value. The table below presents the fair value of the instrument issued as of November 2, 2016 and the allocation of the proceed (for the fair value as of November 30, 2017 and 2016, see Note 15):

		~~Total Fair Value~~
		~~(in thousands)~~
		~~November 2,~~
		~~2016~~
~~Embedded derivative component~~	$	40
~~Loan component~~		~~222~~
~~Total~~	$	~~262~~

~~The transaction costs were approximately $29 thousand, out of which $8 thousand as stock based compensation due to issuance of warrants (See also Note 13(d)).~~

~~On April 27, 2017 and November 2, 2017, the Company entered into extension agreements through November 2, 2017 and May 2, 2018, respectively.~~

(d) During the years ended November 30, 2017 and 2016 the Company entered into several unsecured convertible note agreements with accredited or offshore investors for an aggregate amount of $5 and $1.4 million, respectively. The loans bear an annual interest rate of 6% and mature in two years, unless converted earlier. Under certain conditions as defined in the agreements, the entire principal amount and accrued interest automatically convert into Units (as defined below).

Each $6.24 of principal amount and accrued interest due shall convert into a Unit, consisting of one share of Common Stock and one three-year warrant exercisable into an additional share of common stock at a per share exercise price of $6.24. In addition, in certain loans within 12 months of the issuance date hereof, the holder, at its option, may convert the outstanding principal amount and accrued interest either (i) Units as provided above, or (ii) shares of the Company’s common stock at a per share conversion price of $6.

Since the closing price of the Company's publicly traded stock is greater than the effective conversion price on the closing date, the conversion feature is considered "beneficial" to the holders and equal to $2.3 million and $257 thousand for the convertible notes received during the years ended November 30, 2017 and 2016, respectively. The difference is treated as issued equity and reduces the carrying value of the host debt; the discount is accreted as deemed interest on the debt.

The transaction costs for the convertible notes received during the year ended November 30, 2017 and 2016 were approximately $527 and $126 thousand, respectively, out of which $163 and $55 thousand are stock-based compensation due to issuance of warrants (See also Note 13(d)).

(e) During the year ended November 30, 2017, the Company entered into several unsecured convertible note agreements with accredited or offshore investors for an aggregate amount of $0.8 million. The notes have mainly 6% interest rate and are scheduled to mature between six to nine months and one year unless converted earlier. At any time, all or a portion of the outstanding principal amount and accrued but unpaid interest thereon may be converted at the Holder’s option into shares of the Company common stock at a price of $6.24 per share. The Company also issued to the investors three-yearawarded warrants to purchase ~~up to 145,509 shares~~360,000 of the Company’s Common Stock at a price of $0.85per share and granted Lender the right to convert any part of the Outstanding amount into Common Stock of the Company at the conversion rate of $0.85 per share.

On August 15, 2023, the Company received a loan from an investor in the amount of $250. The loan bears 8% annual interest and is repayable on January 1, 2024.

During October and November 2023, the Koligo subsidiary received loans in the amount of $60. The loans bear interest at annual interest rates of 10%, and are repayable between November 30, 2023 and January 1, 2024. As of the date of this report, $40 of the outstanding amount had not yet been repaid.

In February 2024, Koligo received a loan from a lender in the amount of the $57 at an annual interest rate of 10%. The loan is repayable by May 1, 2024.

On March 26, 2024, Koligo received a loan from a lender in the amount of $250 at an annual interest rate of 10%. The loan is repayable by June 26, 2024. The Company issued a warrant to the lender for the purchase of 242,719 shares of Common Stock of the Company at an exercise price of ~~$6.24.~~$1.03 per share exercisable immediately and expiring on March 26, 2029

~~Since~~

During April 2024 Koligo and the ~~closing~~Israeli subsidiary received one month 10% annual simple interest loans from offshore investors in the amounts of $175 and $125 respectively. The investors received a total of 375,000 warrants for the purchase of 375,000 shares of Common Stock of the Company at an exercise price of $0.80 per share exercisable immediately and expiring on October 6, 2024.

F-27

NOTE 10 – CONVERTIBLE LOANS

a.	Long-Term Convertible Loans

The tables below summarize the Company’s ~~publicly traded stock is greater than~~outstanding convertible loans as of December 31, 2023 and December 31, 2022 respectively:

SCHEDULE OF LONG TERM CONVERTIBLE NOTES

Principal		Issuance Date		Current Interest Rate			Current Maturity		Current Conversion Price of loan into equity
Amount		(Year)		%			(Year)		$
Convertible Loans Outstanding as of December 31, 2023
$	750		2018		10	%		2026		2.50
	1,500		2019		10	%		2026		2.50
	100		2019		8	%		2024		2.50
	5,000		2019		10	%		2026		2.50
	100		2020		8	%		2024		7.00
	5,000		2022		10	%		2026		2.50
	1,150		2022		6	%		**2023		4.50
	5,000		2023		8	%		2026		2.46
	735		2023		8	%		2024		-*
$	19,260

	*	See Koligo convertible loan agreement below.
	**	Was not yet paid by December 31, 2023.

Convertible Loans Outstanding as of December 31, 2022

$	750	2018	2	%	2023	7.00
	1,600	2019	8	%	2024	7.00
	5,000	2019	6	%	2023	7.00
	100	2020	8	%	2023	7.00
	8,000	2022	10	%	2024	2.50
	1,150	2022	6	%	2023	4.50
$	16,600

Convertible Loans repaid during the ~~effective conversion price on~~year ended December 31, 2023

Principal Amount

Issuance

Year

Interest

Rate

Maturity

Period

Exercise

Price

3,000

2022

2.5

Convertible Loans repaid during the measurement date, the conversion feature is considered "beneficial" to the holders and equal to $81 thousand. The difference is treated as issued equity and reduces the carrying value of the host debt; the discount is accreted as deemed interest on the debt.year ended December 31, 2022

~~(f)~~

Principal Amount		Issuance Year		Interest Rate			Maturity Period		Exercise Price
	150		2019		8	%		2.5	$	7
	50		2019		6	%		3		7
	150		2020		8	%		2.5		7
	1,950		2019		6%-8	%		3		4.5-7
	2,300

F-28

Convertible Loans Entered into in 2023

On January ~~23, 2017,~~10, 2023 (the “Effective Date”), the Company entered into ~~unsecured~~the following agreements: (i) a convertible ~~note~~loan agreement (the “NewTech Convertible Loan Agreement”) with NewTech Investment Holdings, LLC (the “NewTech Lender”), pursuant to which the NewTech Lender loaned the Company $4,000 (the “NewTech Loan Amount”), and (ii) a ~~Non-U.S. institutional investor,~~convertible loan agreement (the “Malik Convertible Loan Agreement”, together with the NewTech Convertible Loan Agreement, the “Convertible Loan Agreements”) with Ariel Malik (the “Malik Lender”, together with the NewTech Lender, the “Lenders”), pursuant to which the Malik Lender loaned the Company $1,000 (the “Malik Loan Amount”, together with the NewTech Loan Amount, the “Loan Amount”).

The terms of the NewTech Convertible Loan Agreement and the Malik Loan Agreement are identical. Interest is calculated at 8% per annum (based on a 365-day year); provided, that if an Event of Default (as defined in the Convertible Loan Agreements) has occurred and is continuing, the Outstanding Amount (as defined herein) will be calculated at 15.0% per annum. The Loan Amount and all accrued but unpaid interest thereon (collectively, the “Outstanding Amount”) shall either (i) be repaid in cash or (ii) convert to shares of common stock, par value $0.0001 per share (“Common Stock”), of the Company on the third anniversary of the Effective Date (the “Maturity Date”). The Maturity Date may be extended by the Lender upon the written consent of the Lender. The Outstanding Amount may be prepaid by the Company in whole or in part at any time with the prior approval of the Lender.

At any time prior to or on the Maturity Date, any Lender may provide the Company with written notice to convert all or part of the Outstanding Amount into shares of our Common Stock equal to the quotient obtained by dividing (x) the Outstanding Amount by (y) a price equal to $2.464 per share (subject to adjustment for certain capital events, such as stock splits) (the “Conversion Price”).

Under the terms of the Convertible Loan Agreements, the Company used the proceeds from the Loan Amount to (i) redeem the loan amount from the previously disclosed Convertible Loan Agreement, dated as of May 19, 2022 between Orgenesis and Ricky Steven Neumann, as amended by the previously disclosed certain Convertible Loan Extension Agreement, dated as of October 23, 2022, by and between Orgenesis and Ricky Steven Neumann, and (ii) for general corporate purposes. Pursuant to the terms, the Company repaid said loan upon receipt of the Loan Amount.

In connection with such loan, the Company agreed to issue the NewTech Lender warrants representing the right to purchase 405,844 shares of Common Stock, at an exercise price of $2.50 per share and the Malik Lender warrants representing the right to purchase 101,461 shares of Common Stock, at an exercise price of $2.50 per share. Such Warrants will be exercisable at any time beginning six months and one day after closing and ending 36 months after the closing date.

Koligo Convertible Loan

On March 27, 2023, the Company’s subsidiary Koligo Therapeutics Inc. (“Borrower”), entered into a convertible loan agreement (the “Convertible Loan Agreement”) with Yehuda Nir (the “Lender,” and together with the Borrower, the “Parties”), pursuant to which the Lender agreed to loan the Borrower up to $5,000 (the “Loan Amount”). Interest is calculated at 8% per annum (based on a 365-day year) and is payable, along with the principal, on or before January 1, 2024 (the “Maturity Date”). The Maturity Date may be extended by the Lender in the Lender’s sole and absolute discretion and any such extension(s) shall be in writing signed by the Parties. The Loan Amount may be prepaid by the Borrower in whole or in part at any time with the prior written approval of the Lender.

If prior to December 31, 2023, the Borrower issues equity securities (“Equity Securities”) in a transaction or series of related transactions resulting in aggregate gross proceeds to the Borrower of at least $5,000 (excluding conversion of the Loan Amount) (a “Qualified Financing”), then the outstanding principal amount of ~~$400,000~~the Loan Amount, and any and all accrued but unpaid interest thereon (collectively, the “Outstanding Amount”), will automatically convert into such Equity Securities issued pursuant to the Qualified Financing at a price per ~~annum rate~~share equal to fifty percent (50%) of 6%the price per share paid for each share of the Equity Securities purchased for cash by the investors in the Qualified Financing (the “Mandatory Conversion”). The per share price for the Mandatory Conversion shall be calculated on a fully diluted basis (including equity underlying all outstanding options, warrants, and ~~with~~other convertible securities, but excluding the Equity Securities issuable upon the Mandatory Conversion). As of the date of the issue of these financial statements, the Qualified Financing had not occurred.

F-29

The Parties agreed that the Lender shall have the option to assign $1,500 of the Loan Amount due to the Lender under that certain convertible loan agreement between the Lender and the Company dated April 21, 2022, as amended, (collectively the “Original Loan”), to the Borrower (the “Loan Assignment”). The terms of the Loan Assignment will be the same as under the Original Loan, including a maturity date of ~~April 23, 2017.~~

~~F-23~~

January 31, 2026 and an annual interest rate of 10%. The ~~transaction costs were approximately $71 thousand, out of which $35 thousand~~Loan Assignment will be subject to the Mandatory Conversion as ~~stock based compensation due to issuance of 6,410 warrants and 2,671 shares. The fair value of those warrants as~~described above. As of the date of ~~grant was evaluated by using~~ the ~~Black-Scholes valuation model.~~issue of these financial statements, said assignment has not occurred.

~~The principal amount and accrued interest were repaid by the Company on March 7, 2017 and, in accordance with~~

Under the terms of the ~~agreement,~~Koligo Convertible Loan Agreement, the Borrower agreed to use the Loan Amount to fund working capital and ongoing operations and for no other purposes unless the Lender agrees in writing. As of December 31, 2023, Koligo received $735 under the Koligo Convertible Loan Agreement.

In January 2024, the Company ~~issued to the investor 54,167 restricted shares of the Company’s Common Stock. The fair value of the shares as of March 7, 2017, was $494 thousand~~ and ~~was recorded as financial expenses.~~

(g) In January 2017, MaSTherCell repaid all but one of its bondholders (originally issued on September 14, 2014), and the aggregate payment amounted to $1.7 million (€1.5 million). On January 17, 2017, the remaining bondholderLender agreed to extend the ~~duration~~maturity date of ~~his Convertible bond until March 21, 2017. In consideration for~~ the ~~extension, the~~loan amount to December 31, 2026. The Company ~~issued to the bondholder~~awarded warrants to purchase ~~8,569 shares~~840,000 of the Company’s Common Stock ~~exercisable over a three-year period~~ at a price of $0.85per share, ~~exercise~~and granted Lender the right to convert any part of the Outstanding amount into Common Stock of the Company at the conversion rate of $0.85 per share.

On September 29, 2023, Borrower entered into another convertible loan agreement (the “Sai Convertible Loan Agreement”) with Sai Traders (the “Lender,” and together with the Borrower, the “Parties”), pursuant to which the Lender agreed to loan the Borrower up to $25,000 (the “Sai Convertible Loan”). The Sai Convertible Loan shall consist of an Initial Installment of $1,500 (“Initial Installment”), and at the election of the Borrower thereafter while the Sai Convertible Loan remains outstanding, Borrower may issue up to an additional $23,500 (“Subsequent Installments”). The Sai Convertible loan bears transaction costs of 8%. Interest is calculated at 10% per annum (based on a 365-day year) of all outstanding principal borrowings and is payable, along with the principal (collectively the “Outstanding Amount”), on or before December 1, 2027 (the “Maturity Date”). The Loan Amount may be prepaid by the Borrower in whole or in part at any time without penalty.

Under the terms of the Sai Convertible Loan Agreement, at the option of the Lender at the Maturity Date or any time prior, the Outstanding Amount may be convertible, in whole or in part, into the number of shares of Common Stock of the Company equal to the quotient obtained by dividing (x) the Outstanding Amount by (y) the Conversion Price. The “Initial Installment Conversion Price” for the Outstanding Amount relating to the Initial Installment shall be a price per share of Common Stock equal to $2.50. The “Subsequent Installment Conversion Price” for the Outstanding Amount relating to the Subsequent Installment(s) shall be a price per share of Common Stock equal to $3.50. Lender agrees that it shall not deliver a notice of conversion that upon effect results in the holder to beneficially own more than 19.99% of the then outstanding shares of Company’s Common Stock. Lender may elect to, instead of the conversion of the Outstanding Amount into Common shares of Company, convert the entire Outstanding Amount into the securities of Borrower pursuant to a the first issuance of equity of the Borrower under which the Borrower raises at least $5,000 in gross proceeds (“Qualified Financing”) at a price per share equal to 75% of the price per share paid for each share of the equity securities purchased for cash by the investors in such a Qualified Financing. In the event of the Borrower being listed on a public securities exchange, Lender shall have the option to convert the Outstanding Amount at a 25% premium to the volume weighted average price of ~~$6.24. The fair value~~the Borrower’s equity over the preceding five (5) days as reported by Bloomberg (“5-Day VWAP”), provided that any such conversion shall not result in the Lender to beneficially own more than 19.99% of ~~those warrants as~~the then beneficial shares of the Borrower. In the event of an acquisition of the Borrower (“Acquisition”), prior to the closing of such acquisition, Lender shall have the option to convert the Outstanding Amount into equity securities of the Borrower at a price equivalent to seventy five percent (75%) of the price paid by such buyer to acquire the Borrower.

As of the date of ~~grant~~this report, no part of the Loan was ~~$20 thousand using~~received, and was therefore not reflected in the ~~Black-Scholes valuation model.~~Consolidated Balance sheet of December 31, 2023.

F-30

Extension of Existing Loan Agreements

On January 12, 2023, the Company entered into (i) a Convertible Credit Line and Unsecured Convertible Note Extension #2 Agreement with Yosef Dotan (the “Dotan Extension Agreement”), (ii) a Convertible Credit Line Extension Agreement with Aharon Lukach (the “Lukach Extension Agreement”) and (iii) a Convertible Loans and Unsecured Convertible Notes Extension #2 Agreement with Yehuda Nir (the “Nir Extension Agreement”), each which extended the maturity date of the convertible loans under their respective loan agreements (as described below) to January 31, 2026. The aggregate principal amount of loans extended was $12,000 and the interest rate on the extended loans varied between 2% and 10%. In consideration for the extensions, (i) the interest rate on such principal amount of such loans was increased to 10% per annum commencing on February 1, 2023 (except for the Nir Convertible Loan Agreement dated as of April 12, 2022, which already had a 10% per annum interest rate), (ii) the conversion price of the loans was reduced from $7.00 to $2.50 (except for the Nir Convertible Loan Agreement dated as of April 12, 2022, which already had a $2.50 conversion price), (iii) the exercise price of the warrants issuable upon conversion of the 2% Notes and the Nir Convertible Loan Agreement dated as of May 17, 2019 was reduced to $2.50 per share and the term of such warrants was extended to January 31, 2026.

The Dotan Extension Agreement related to a Convertible Credit Line Agreement dated as of October 3, 2019, as amended, of which $750 principal amount plus interest is outstanding as of September 30, 2023, and 2% Notes purchased from the Company on November 3, 2018, of which $250 principal amount plus interest is outstanding. Based on its analysis, the Company concluded that the change in terms referred to Convertible Credit Line Agreement and the 2% Notes should be accounted for as a modification and an extinguishment respectively.

The Lukach Extension Agreement related to a Convertible Credit Line Agreement dated as of October 3, 2019, as amended, of which $750 principal amount plus interest is outstanding as of September 30, 2023. Based on its analysis, the Company concluded that the change in terms referred to above should be accounted for as a modification.

The Nir Extension Agreement related to 2% Notes purchased from the Company on November 3, 2018, as amended, of which $500 principal amount plus interest is outstanding as of September 30, 2023, a Convertible Loan Agreement dated as of May 17, 2019, of which $5,000 principal amount plus interest is outstanding, and a Convertible Loan Agreement dated as of April 12, 2022, as amended, of which $5,000 principal amount plus interest is outstanding. Based on its analysis, the Company concluded that the change in terms referred to the 2% Notes and Convertible Loan Agreement should be accounted for as an extinguishment and a modification respectively.

On March ~~20, 2017,~~6, 2024, the Israeli subsidiary and Koligo each received loans in the amount of $37.5 from offshore lenders. The loans bear 10% annual interest and are repayable on June 7, 2024. The lenders will each have the right to convert the entire amount of the unpaid portion of the loan into Common Stock of the Company at the conversion rate of $1.03 per share.

NOTE 11 – LEASES

The Company leases research and development facilities, equipment and offices under finance and operating leases. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of lease payments over the term. Many of the leases include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate.

The Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company estimated the incremental borrowing rate to discount the lease payments based on information available at lease commencement.

Manufacturing facilities

The Company leases space for its manufacturing facilities under operating lease agreements. The leasing contracts are for a period of 5 years ..

F-31

Research and Development facilities

The Company leases space for its research and development facilities under operating lease agreements. The leasing contracts are for a period of 3 years .

Offices

The Company leases space for offices under operating leases. The leasing contracts are valid for terms of 5 years .

Lease Position

The table below presents the lease-related assets and liabilities recorded on the balance sheet:

SCHEDULE OF LEASE-RELATED ASSETS AND LIABILITIES

	2023			2022
	December 31,
	2023			2022
Assets
Operating Leases
Operating lease right-of-use assets	$	351		$	2,304

Finance Leases
Property, plants and equipment, gross		89			222
Accumulated depreciation		(65	)		(68	)
Property and equipment, net	$	24		$	154

Liabilities
Current liabilities
Current maturities of operating leases	$	216		$	542
Current maturities of long-term finance leases	$	18		$	60

Long-term liabilities
Non-current operating leases	$	96		$	1,728
Long-term finance leases	$	4		$	95

Weighted Average Remaining Lease Term
Operating leases		1.1 years			4.7 years
Finance leases		1.2 years			2.4 years
Weighted Average Discount Rate
Operating leases		7.5	%		8.0	%
Finance leases		2.0	%		6.4	%

Lease Costs

The table below presents certain information related to lease costs and finance and operating leases:

SCHEDULE OF LEASE COSTS

	2023		2022
	Years ended December 31,
	2023		2022

Operating lease cost:	$	561		546

Finance lease cost:
Amortization of leased assets		46		43
Interest on lease liabilities		5		7
Total finance lease cost	$	51		50

F-32

The table below presents supplemental cash flow information related to lease:

SCHEDULE OF SUPPLEMENTAL CASHFLOW INFORMATION

	Years ended December 31,
	2023		2022
	(in Thousands)
Cash paid for amounts included in the measurement of leases liabilities:
Operating leases	$	573	$	559
Finance leases	$	44	$	43

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	752	$	432
Finance leases		-		136

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining ~~bondholder converted his convertible bonds into 40,682 shares of~~years to the ~~Company’s Common Stock (See also note 11(c)).~~

~~NOTE 8 – LOANS~~

a. ~~Terms of Long-term Loans~~

Principal Year of November 30,
Amount Grant Year Interest Rate Maturity 2017 2016
(in thousands) (in thousands)
Long-term loan (*) € 1,400 2012 4.05% 2022 $ 899 $ 952
Long-term loan € 1,000 2013 6%-7.5% 2023 977 1,000
Long-term loan € 790 2012-2016 5.5%-6% 2020-2024 620 739
Long-term loan (**) € 1,000 2016 7% 2019 - 1,063
$ 2,496 $ 3,754
Current portion of loans payable (378 ) (463 )
$ 2,118 $ 3,291

~~(*) The loan has a business pledge~~finance lease liabilities and operating lease liabilities recorded on the ~~Company’s~~balance sheet.

SCHEDULE OF FINANCE LEASE LIABILITIES AND OPERATING LEASE LIABILITIES

	Operating Leases			Finance Leases
Year ended December 31,
2024	$	231		$	18
2025		99			4
2026		-			-
2027		-			-
2028		-			-
Thereafter		-			-
Total minimum lease payments		330			22
Less: amount of lease payments representing interest		(18	)		-
Present value of future minimum lease payments		312			22
Less: Current leases obligations		(216	)		(18	)
Long-term leases obligations	$	96		$	4

Operating lease right-of-use assets ~~at the same value.~~
~~(**) On November 15, 2017 the outstanding loan and the accrued interest in a total amount of $1.1 million~~by geographical location were ~~converted into MaSTherCell common shares.~~ as follows:

SCHEDULE OF RIGHT-OF-USE ASSETS BY GEOGRAPHICAL LOCATION

	December 31,
	2023		2022
	(in thousands)

Greece	$	-	$	1,368
Korea		-		218
Israel		292		580
U.S.		59		138
Total	$	351	$	2,304

F-33

NOTE 12 – COMMITMENTS AND LICENSE AGREEMENTS

See ~~also~~ Note ~~10.~~13 for additional commitments related to Collaborations.

b. ~~Terms of Short-term Loans and Current Portion of Long Term Loans~~

November 30,
Currency Interest Rate 2017 2016
(in thousands)
Current portion of loans payable Euro 4.05% $ 169 $ 145
Current portion of loans payable Euro 6%-7.5% 70 135
Current portion of loans payable Euro 5.5%-6% 139 183
$ 378 $ 463
Short term-loans* Euro 7% - 648
$ 378 1,111

a.	Tel Hashomer Medical Research, Infrastructure and Services Ltd (“THM”)

(*) On various dates from September 14, 2015 through the year 2015, MaSTherCell received short term loans from management and shareholders for a total amount of €1,247 thousand, which bear an annual interest rate of 7%. No maturity dates were defined. As of November 30, 2017, MaSTherCell repaid the remaining amount of these loans.

~~F-24~~

~~NOTE 9 - COMMITMENTS~~

a. ~~Tel Hashomer Medical Research, Infrastructure and Services Ltd~~~~(“THM”).~~

On February 2, 2012, the Company’s Israeli Subsidiary entered into a licensing agreement with THM. According to the agreement, the Israeli Subsidiary was granted a worldwide, royalty bearing, exclusive license to trans-differentiation of cells to insulin producing cells, including the population of insulin producing cells, methods of making this population, and methods of using this population of cells for cell therapy or diabetes treatment developed by Dr. Sarah Ferber of THM.

As consideration for the license, the Israeli Subsidiary will pay the following to THM:

	1)	A royalty of 3.5% of net sales;
	2)	16% of all sublicensing fees received;
	3)	An annual license fee of ~~$15 thousand,~~$15, which commenced on January 1, 2012 and shall be paid once every year thereafter. The annual fee is non-refundable, but it shall be paid each year against the royalty noted above, to the extent that such are payable, during that year; and
	4)	Milestone payments as follows:

a.	a)	$50 ~~thousand~~ on the date of initiation of ~~phase~~Phase I clinical trials in human subjects;
b.	b)	$50 ~~thousand~~ on the date of initiation of ~~phase~~Phase II clinical trials in human subjects;
c.	c)	$150 ~~thousand~~ on the date of initiation of ~~phase~~Phase III clinical trials in human subjects;
d.	d)	$750 ~~thousand~~ on the date of initiation of issuance of an approval for marketing of the first product by the FDA; and
e.	e)	$2 million when worldwide net sales of Products (as defined in the agreement) have reached the amount of ~~$150~~$150 million for the first time, (the “Sales Milestone”).

As of ~~November 30, 2017,~~December 31, 2023, the Israeli Subsidiary ~~has~~had not reached any of these milestones.

In the event of closing of an acquisition of all of the issued and outstanding share capital of the Israeli Subsidiary and/or consolidation of the Israeli Subsidiary or the Company into or with another corporation (“Exit”), the THM shall be entitled to choose whether to receive from the Israeli Subsidiary a one-time payment based, as applicable, on the value of either 463,651 shares of common stock of the Company at the time of the Exit or the value of 1,000 shares of common stock of the Israeli Subsidiary at the time of the Exit.

In 2016 and 2017, the Israeli Subsidiary entered into a research service agreement with the THM. According to the agreements, the Israeli Subsidiary will perform a study at the facilities and use the equipment and personnel of the Sheba Medical Center, with annual consideration of approximately $88 and $131 thousand, respectively.

b.	Department De La Gestion Financiere Direction De L’analyse Financiere (“DGO6”)

b. ~~Maryland Technology Development Corporation~~

On June 30, 2014, the Company’s U.S. Subsidiary entered into a grant agreement with Maryland Technology Development Corporation (“TEDCO”). TEDCO was created by the Maryland State Legislature in 1998 to facilitate the transfer and commercialization of technology from Maryland’s research universities and federal labs into the marketplace and to assist in the creation and growth of technology based businesses in all regions of the State. TEDCO is an independent organization that strives to be Maryland’s lead source for entrepreneurial business assistance and seed funding for the development of startup companies in Maryland’s innovation economy. TEDCO administers the Maryland Stem Cell Research Fund to promote State funded stem cell research and cures through financial assistance to public and private entities within the State. Under the agreement, TEDCO has agreed to give the U.S Subsidiary an amount not to exceed approximately $406 thousand (the “Grant”). The Grant will be used solely to finance the costs to conduct the research project entitled “Autologous Insulin Producing (AIP) Cells for Diabetes” during a period of two years. On June 21, 2016 TEDCO has approved an extension until June 30, 2017.

~~F-25~~

On July 22, 2014 and September 21, 2015, the U.S Subsidiary received an advance payment of $406 thousand on account of the Grant. Through November 30, 2017, the Company utilized $356 thousand. The amount of Grant that was utilized through November 30, 2017, was recorded as a deduction of research and development expenses in the statement of comprehensive loss.

c.~~Department De La Gestion Financiere Direction De L’analyse Financiere (“DGO6”)~~

i. On March 20, 2012, MaSTherCell was awarded an investment grant from the DGO6 of Euro1,421 thousand. This grant is related to the investment in the production facility with a coverage of 32% of the investment planned. A first payment of Euro 568 thousand has been received in August 2013. In December 2016, the DGO6 paid to MaSTherCell Euro 669 thousand on account of the grant and the remaining grant amount has been declined.

~~ii.~~(1) On November 17, 2014, the Belgian Subsidiary received the formal approval from the DGO6 for a Euro ~~2.015 thousand~~2 million ($2.4 million) support program for the research and development of a potential cure for Type 1 Diabetes. The financial support was composed of Euro ~~1,085 thousand (70%~~1.085 million (70% of budgeted costs) grant for the industrial research part of the research program and a further recoverable advance of Euro 930 ~~thousand (60%~~(60% of budgeted costs) of the experimental development part of the research program. In December 2014, the Belgian Subsidiary received advance payment of Euro ~~1,209 thousand~~1.209 million under the grant. The grants are subject to certain conditions with respect to the Belgian Subsidiary’s work in the Walloon Region. In addition, the DGO6 is also entitled to a royalty upon revenue being generated from any commercial application ~~ofthe~~of the technology. In 2017 the Company received by the DGO6 final approval for Euro 1.8 million costs invested in the project out of which Euro ~~1.192 founded~~1.2 million funded by the DGO6. ~~During 2017~~As of December 31, 2023, the Company repaid to the DGO6 ~~the down payments~~a total amount of ~~Euro 17 thousand. As of November 30, 2017,~~approximately $167 in recoverable grants and an amount of ~~$160 thousand was~~$243was recorded asin advance payments on account of grant.

~~iii.~~

(2) In April 2016, the Belgian Subsidiary received the formal approval from DGO6 for a ~~budgeted~~ Euro ~~1,304 thousand~~1.3 million ($~~1,455 thousand)~~1.5 million) support program for the development of a potential cure for Type 1 Diabetes. The financial support iswas awarded to the Belgium Subsidiary as a recoverable advance payment at 55% of budgeted costs, or for a total of Euro 717 ~~thousand ($~~($800 ~~thousand)~~). The grant will be paid over the project period. ~~On December 19, 2016, the~~The Belgian Subsidiary received ~~a first~~advance payment of Euro ~~359 thousand~~438 ($~~374 thousand)~~537). Up through ~~November 30, 2017,~~December 31, 2023, an amount of Euro ~~303 thousand~~438 ($537) was recorded as deduction of research and development expenses and an amount of ~~$66 thousand was~~Euro 74was recorded as advance payments on account of grant. This program was terminated in December 2023.

~~iv.~~

F-34

(3) On October 8, 2016, the Belgian Subsidiary received the formal approval from the DGO6 for a ~~budgeted~~ Euro 12.3 million ($12.8 million) support program for the GMP production of AIP cells for two clinical trials that will be performed in Germany and Belgium. The project ~~will be held~~was to have been conducted during a period of three years commencing January 1, ~~2017.~~2017, and is currently on hold pending approval for an extension. The financial support is awarded to the Belgium subsidiary at 55% of budgeted costs, a total of Euro 6.8 million ($7 million). The grant will be paid over the project period. On December 19, 2016, the Belgian Subsidiary received a first payment of Euro 1.7 million ($~~1.8~~2 million).

(4) In December 2020, the Belgian Subsidiary received the formal approval from DGO6 for a Euro 2.9 million ($3.5 million) support program for research on Dermatitis Treatments and Wound Healing Using Cell Regenerative Technologies. The financial support was awarded to the Belgium Subsidiary as a recoverable advance payment at 60% of budgeted costs, or for a total of Euro 1.7 million ($2.1 million). The grant will be paid over the project period. The Belgian Subsidiary received advance payments of Euro 301($366) in 2020 and of Euro 392 ($445) in 2021. The research program started in 2021. Up through ~~November 30, 2017,~~December 31, 2023, an amount of ~~$558~~Euro 965($1.047) was recorded ~~as deduction of~~in research and development expenses and ~~an amount of $1,442 thousand was recorded as advance payments on account of grant.~~have been submitted for approval to the Walloon region.

d. ~~Israel-U.S Binational Industrial Research and Development Foundation (“BIRD”)~~

c.	Israel-U.S. Binational Industrial Research and Development Foundation (“BIRD”)

On September 9, 2015, the Israeli Subsidiary entered into a pharma Cooperation and Project Funding Agreement (CPFA) with BIRD and Pall Corporation, a U.S. company. BIRD will give a conditional grant of $400 thousand each (according to terms defined in the agreement), for a joint research and development project for the use Autologous Insulin Producing (AIP) Cells for the Treatment of Diabetes (the “Project”). The Project started on March 1, 2015. Upon the conclusion of product development, the grant shall be repaid at the rate of 5% of gross sales. The grant will be used solely to finance the costs to conduct the research of the project during a period of 18 months starting on March 1, 2015. Up to date the Israeli Subsidiary received $200 thousand under the grant. On July 28, 2016 BIRD approved an extension till May 31, 2017 and final report was submitted to BIRD.

~~Up through November 30, 2017, an amount of $359 thousand was recorded as deduction of research and development expenses and $159 thousand as a receivable on account of grant.~~

~~F-26~~

e. ~~Korea-Israel Industrial Research and Development Foundation (“KORIL”)~~

~~On May 26, 2016, the Israeli Subsidiary entered into a pharma Cooperation and Project Funding Agreement (CPFA) with KORIL and CureCell. KORIL will give~~awarded a conditional grant of up to ~~$400 thousand~~$400 each (according to terms defined in the agreement), for a joint research and development project for the use of Autologous Insulin Producing (AIP) Cells for the Treatment of Diabetes (the “Project”). Company received a total of $299 under the grant. The project was completed in 2019. The grant is to be repaid at the rate of 5% of gross sales generated from the Project. To date no sales have been generated.

d.	Korea-Israel Industrial Research and Development Foundation (“KORIL”)

On May 26, 2016, the Israeli Subsidiary and the Orgenesis Korean (an Octomera subsidiary), entered into a pharma Cooperation and Project Funding Agreement (CPFA) with KORIL. KORIL will make a conditional grant of up to $400 to each company (according to terms defined in the agreement), for a joint research and development project for the use of AIP Cells for the Treatment of Diabetes (the “Project”). The Project started on June 1, 2016. ~~Upon the conclusion of product development, the~~The project was completed in 2021. The grant ~~shall~~is to be repaid at the yearly rate of 2.5% of gross sales. ~~The grant will be used solely to finance the costs to conduct the research~~To date no sales have been generated. As of ~~the project during a period of 18 months starting on June 1, 2016. On June 2016,~~December 31, 2023, the Israeli Subsidiary and the Orgenesis Korea received ~~$160 thousand~~$597 under the grant.

~~Up through November~~

e.	BIRD Secant

On July 30, ~~2017, an amount of $184 thousand was recorded as deduction of research~~2018, Orgenesis Inc and ~~development expenses and $24 thousand as a receivable on account of grant.~~

f. ~~Lease Agreement~~

~~MaSTherCell has an operational lease agreement for the rent of offices for a period of 12 years expiring on November 30, 2027. The costs per year are €329 thousand (approximately $390 thousand).~~

~~The Israeli subsidiary has an operational lease agreement for the rent of development lab. The costs per year are NIS 120 thousand (approximately $35 thousand).~~

g. ~~Quality Manufacturing System (“QMS”) License Agreement~~

In December 2016, MaSTherCell and the Company entered into a license agreement pursuant to which MaSTherCell granted to the Company a worldwide (excluding Europe), perpetual, exclusive, royalty-free and sub-licensable right to MaSTherCell’s quality manufacturing system for the Company and its affiliates’ own internal quality assurance program and for the Company’s CDMO activity. In consideration of the license, the Company has a financial obligation to pay to MaSTherCell Euro 2.5 million, payable by an initial and second payment of Euro 250,000, with the balance to be made by an in-kind contribution by the Company by no later than December 2018.

h. ~~Collaboration Agreement~~

~~On March 14, 2016, the Israel subsidiary,~~OBI entered into a collaboration agreement with ~~CureCell Co., Ltd.~~Secant Group LLC (“~~CureCell”~~Secant”). Under the agreement, Secant will engineer and prototype 3D scaffolds based on novel biomaterials and technologies involving bioresorbable polymer microparticles, while OBI will provide expertise in cell coatings, cell production, process development and support services. Under the agreement, Orgenesis is authorized to utilize the jointly developed technology for its autologous cell therapy platform, including its Autologous Insulin Producing (“AIP”) cell technology for patients with Type 1 Diabetes, acute pancreatitis and other insulin deficient diseases. In 2018, OBI entered into a Cooperation and Project Funding Agreement (CPFA) with the BIRD fund, which provided certain grant funding, and Secant.

As of December 31, 2023, OBI had received a total amount of $425 under the grant and the project was completed. The grant is to be repaid at the yearly rate of 5% of gross sales. To date no sales have been generated.

f.	Sponsored Research and Exclusive License Agreement with Columbia University

Effective April 2, 2019, the Company and The Trustees of Columbia University in the City of New York, a New York corporation, (“Columbia”) entered into a Sponsored Research Agreement (the “SRA”) whereby the Company will provide financial support for studying the utility of serological tumor marker for tumor dynamics monitoring.

Effective April 2, 2019, the Company and Columbia entered into an Exclusive License Agreement (the “Columbia License Agreement”) whereby Columbia granted to the Company an exclusive license to discover, develop, manufacture, sell, and otherwise distribute certain product in the field of cancer therapy. In consideration of the licenses granted under the Columbia License Agreement, the Company shall pay to Columbia (i) a royalty of 5% of net sales of any product sold which incorporates a licensed Columbia patent and (ii) 2.5% of net sales of other products. In addition, the Company shall pay a flat $100 fee to Columbia upon the achievement of each regulatory milestone. As of December 31, 2023, no royalty incurring sales were made.

F-35

g.	Regents of the University of California

In December 2019, the Company and the Regents of the University of California (“University”) entered into a joint research agreement in the field of therapies and processing technologies according to an agreed upon work plan. According to the agreement, the Company will pay the University royalties of up to 5% (or up to 20% of sub-licensing sales) in the event of sales that includes certain types of University owned IP. As of December 31, 2023, no royalty incurring sales were made.

h.	Caerus Therapeutics Inc

In October 2019, the Company and Caerus Therapeutics (“Caerus”), ~~initially~~a Virginia company, concluded a license agreement whereby Caerus granted the Company an exclusive license to all Caerus IP relating to Advance Chemeric Antigen Vectors for Targeting Tumors for the ~~purpose~~development and/or commercialization of ~~applying~~certain licensed products. In consideration for ~~a grant~~the License granted to the Company under this Agreement, the Company shall pay Caerus annual maintenance fees and royalties of sales of up to 5% and up to 18% of sub-license fees. As of December 31, 2023, no royalty incurring sales were made.

i.	Tissue Genesis LLC

Included in the Koligo acquisition of 2020 were the assets of Tissue Genesis LLC. The Company is committed to paying the previous owners of Tissue Genesis LLC or their assignees up to $500 upon the achievement of certain performance milestones and earn-out payments on future sales provided that in no event will the aggregate of the earn-out payments exceed $4 million. To date, no performance milestones have been reached.

j.	University of Louisville research foundation (“ULRF”)

Koligo had exclusively licensed patents and technology from ~~KORIL for pre-clinical and clinical activities~~the ULRF related to the ~~commercialization~~revascularization and 3D printing of ~~Orgenesis Ltd.’s AIP~~ cell ~~therapy product in Korea ("KORIL Grant"~~and tissue for transplant (“ULRF licensed products”). ~~Subject~~The Company is committed to ~~receiving~~utilizing commercial reasonable efforts to achieving certain milestones regarding the ~~Koril Grant,~~ULRF licensed products.

k.	Savicell

During 2021, the ~~Parties~~Company and Savicell Ltd (“Savicell”) entered into a collaboration agreement (the “Savicell Agreement”) to collaborate in the evaluation, continued development, validation, and use of Savicell’s platform designed for the early detection and diagnosis of diseases and conditions and for quality control and monitoring purposes, in conjunction with the Company’s systems. Pursuant to the Savicell Agreement, the Company will provide to Savicell funding for the performance of certain tasks agreed ~~to carry out at their own expense their respective commitments~~upon by the parties in a work plan. In consideration for such funding, Savicell will supply the Company with products developed under the ~~work~~Savicell Agreement at preferential rates and grant to the Company a worldwide exclusive licence to sell such products in the Company’s point-of-care network of hospitals, clinics and institutions for quality control and monitoring of manufacturing and processing of autologous immune cells manipulated by cell and gene therapies. The Company will be required to pay a 10% royalty for all gross sales of such products developed under the Savicell Agreement. As of December 31, 2023, no royalty incurring sales were made.

l.	Stromatis Pharma

During 2021, the Company and Stromatis Pharma Inc. (“Stromatis”) entered into a Collaboration and Sublicense Agreement (the “Stromatis Agreement”) to collaborate in refining methods for GMP manufacturing of CAR-T/CAR-NK CT109; and the development and validation of the Stromatis technology as it relates to the CAR-T/CAR-NK CT109 antibody up to and inclusive of filing of Investigational New Drug Application relating to Stromatis’ CAR-T/CAR-NK CT109 antibody (“Licensed Product”), in accordance with the agreed project plan ~~approved~~(“Project”). The Company will fund the Project by ~~KORIL and any additional work plan~~providing Stromatis an amount of $1.2 million such funding to be ~~agreed between~~provided based on approved projects. Stromatis will grant the ~~Israeli Subsidiary~~Company certain perpetual, irrevocable royalty free and ~~CureCell. The Israeli Subsidiary will own sole~~fully paid-up exclusive rights to manufacture, process and supply the Licensed Product (“Manufacturing Rights”) and perpetual, irrevocable, royalty bearing exclusive rights to market and sell and offer for sale the Licensed Product within the Company’s point of care network (“Marketing Rights”). As of December 31, 2023, no royalty incurring sales were made.

F-36

Stromatis has the option to convert the exclusive Manufacturing Rights to non-exclusive rights subject to repayment by Stromatis of an amount equal to funding provided by the Company and an additional payment by Stromatis of an ongoing revenue share of five percent (5%) of revenues of any ~~intellectual property developed~~kind received by Stromatis or its affiliates from the ~~collaboration which is derived~~sale or transfer of Licensed Products or license of rights under the ~~Israeli Subsidiary’s AIP cell therapy product, information~~ licensed ~~from THM. Subject~~technology in relation to ~~obtaining~~ the ~~requisite approval needed~~Licensed Products. The Company shall pay Stromatis in consideration for the Marketing Rights and royalties equal to ~~commence commercialization in Korea,~~12% of net revenues of Licensed Products received by the ~~Israel subsidiary has agreed~~Company. The Company advanced to ~~grant to CureCell, or a fully owned subsidiary thereof,~~Stromatis an initial sum of $500 under ~~a separate sub-license agreement~~the Stromatis Agreement, which was recorded as Cost of revenues, development services and research and development expenses.

m.	Helmholtz Zentrum München Deutsches Forschungszentrum für Gesundheit und Umwelt (GmbH)) (“HMGU”)-

During 2021, HMGU granted an exclusive ~~sub-license~~licence under HGMU owned patent rights and non-exclusive license under HGMU know how and licensed materials, to the ~~intellectual property underlying~~Company in the ~~Company’s API product solely for commercialization~~field of certain human stem cells. In addition, payments will be due by the ~~Israel subsidiary products in Korea. As part~~Company upon certain milestones. The agreement also includes payment of ~~any such license, CureCell has agreed to pay annual license fees, ongoing~~ royalties ~~based~~of between 3% and 4% on net sales ~~generated by CureCell~~of licensed product (with a minimum annual royalty of Euro 200,000, creditable against royalties on net sales incurred during such contract year) and ~~its sublicensees, milestone payments~~5% in service revenues and payment of between 10% and 18% on sublicense ~~fees. Under the agreement, CureCell is entitled to share in the net profits derived by the Israeli Subsidiary from world~~-wide sales (except for sales in Korea) of any product developed as a result of the collaboration with CureCell. Additionally, CureCell was given the first right to obtain exclusive commercialization rights in Japan of the AIP product, subject to CureCell procuring all of the regulatory approvals required for commercialization in Japan. As of November 30, 2017, none of the requisite regulatory approvals for conducting clinical trials had been obtained (See also Note 5(b)).revenues.

n.	License and research agreement with Yeda Research and Development Company Limited

On November 18, 2016, Mr. Scott Carmer, the Chief Executive Officer of the U.S Subsidiary, resigned from his position in order to pursue other interests. The Company’s Chief Executive Officer assumed his position. In connection with his resignationJanuary 25, 2022, the Company and Yeda Research and Development Company Limited (“Yeda”), an Israeli company, entered into a ~~Release~~license and research agreement. No royalty bearing sales were made and the Company terminated this agreement during 2023.

o.	European Innovation Council and SMEs Executive Agency (“EISMEA”)

During the year ended December 31, 2022, the Dutch Subsidiary, together with a consortium of other entities (“Consortium”) and EISMEA entered into a grant funding agreement for the funding of the development of an artificial intelligence guided microfluidic device that standardizes the GMP production of autologous induced pluripotent stem cells (iSPSCs) at greatly reduced costs (“iPSC project”). The total grant amount is Euro 3.999 million of which the Dutch subsidiary is eligible to receive up to Euro 1.179 million. The project started on September 1, 2022 and is expected to end on August 31, 2026. The Dutch subsidiary is the consortium leader for the iPSC project. During the year ended 31 December 2022, the subsidiary received initial working capital in the amount of Euro 1.920 million of which Euro 1.338 million was received on behalf of the other members of the Consortium and recorded in restricted cash, and Euro 582 for the use of the subsidiary as per the grant agreement. As at December 31, 2023, the restricted cash related to the iPSC project was $184. During the year ended December 31, 2023, the Company recognized grant income of $259 which was offset against research and development expenses.

p.	Walloon region ATMP PIT

In December 2023, the Belgian Subsidiary received Euro 738 ($801) as an advance grant from the Walloon region ATMP PIT for the Exofasttrack project. This project is focused on manufacturing, loading, analytical methods, and quality control of Therapeutic Exosomes. The amount was recorded in advance payments on account of grant.

F-37

NOTE 13 – COLLABORATIONS

a.	Adva Biotechnology Ltd.

On January 28, 2018, the Company and Adva Biotechnology Ltd. (“Adva”), entered into a Master Services Agreement (“MSA”), pursuant to which the Company and/or its affiliates provided certain services relating to development of products for Adva.

In consideration for and subject to the fulfillment by the Company of certain funding commitments which were completed in 2019, Adva agreed that ~~Mr. Carmer~~upon completion of the development of the products, the Company and/or its affiliates and Adva shall enter into a supply agreement pursuant to which for a period of eight (8) years following execution of such supply agreement, the Company and/or its affiliates (as applicable) is entitled (on a non-exclusive basis) to purchase the products from Adva at a specified discount pricing from their then standard pricing. The Company and/or its affiliates were also granted a non-exclusive worldwide right to distribute such products, directly or indirectly. The MSA shall remain in effect for 10 years unless earlier terminated in accordance with its terms.

b.	Revised and restated joint venture agreements

In January 2023the Company entered into updated joint venture (JV) agreements (JVAs) with Theracell Advanced Biotechnology SA, Broaden Bioscience and Technology Corp, Image Securities FZC, Cure Therapeutics, and Med Centre for Gene and Cell Therapy FZ-LLC and assigned certain rights and obligations under its JVAs to Texas Advanced Therapies LLC, a Delaware Limited Liability company (“Texas AT”) not related to the Company. Texas AT will receive the Company’s option to require the incorporation of the JV entity, Company’s share in the JV Entity, if and when the latter are incorporated, an option to invest additional funding in the JV Entity, and board and veto rights on certain critical decisions in the JV Entity. The Company has retained the call option to acquire the JV partner’s share in the JVE, to receive a royalty and a right to conclude the Manufacturing and Service Agreement with the JV entity. Pursuant to the JVAs, the Company will no longer be entitled to the additional share of fifteen percent of the JVE’s GAAP profit after tax granted as per the previous version of the JVAs. The Company also has no further obligation to provide any additional funding to the JV entities. As of December 31, 2023, no JV entities were incorporated pursuant to the JVAs.

Mircod

On July 25, 2023, the Company and Mircod LLC (“Mircod”) entered into a settlement and release agreement pursuant to which they agreed to terminate the joint venture and loan agreement between themselves. Also, pursuant to the agreement, Mircod agreed to deliver all the related deliverables to the Company, and the Company agreed to pay Mircod consideration in the amount of $1,000, of which half will be ~~able to exercise options to purchase up to 136,775~~paid in cash, and one half in Orgenesis shares, upon receipt of the ~~Company’s common stock previously issued~~deliverables. As of December 31, 2023, Mircod invoiced the Company $300 in respect of deliverables that it claims were delivered and this amount is included in accounts payable.

d.	Sub-license agreement

On July 25, 2023, the Company, a Sub-licensee, and the equity interest owner of that Sub-licensee (“Sub-licensee Owner”), entered into agreements whereby:

	1)	the Company sub-licensed certain of its therapies to Sub-licensee in return for royalties on future sales and payments upon the successful completion of certain milestones;
	2)	subject to the fulfilment certain conditions and milestones, none of which have been fulfilled to date, the Sub-licensee Owner granted the Company a call option to purchase his interests in Sub-licensee at a valuation to be determined by a third-party valuation firm of not less than $8,000 unless agreed otherwise by the parties to the option; and
	3)	subject to the fulfilment of certain conditions and milestones, none of which have been fulfilled to date, the Sub-licensee Owner was granted a put option to cause the Company to purchase his equity interest in Sub-licensee at a valuation to be determined by a third-party valuation firm of not less than $8,000 unless agreed otherwise by the parties to the option.

The Company has received $215 from Sub-licensee as an advance on account of future license fees. No milestones have been completed to ~~him through their original exercise period~~date.

F-38

e.	Deep Med Joint Venture agreement (JVA)

In November 2021, Deep Med IO Ltd (“Deep Med”) and Mr. Carmer waived, released and forever discharge Company from any claims, demands, obligations, liabilities, rights, causes of action and damages. In furtherance thereof, on November 18, 2016, Mr. Carmer and the Company entered into a ~~Strategic Advisory Agreement whereas he will continue~~JVA. The Parties agreed to ~~serve~~collaborate in the development and commercialization of an AI-powered system to be used in the manufacturing and/or quality control of CGTs. The Company ~~as a non-employee advisor on~~has the right to finance its activities inunder the ~~U.S.~~Deep Med JVA by procuring services, advancing funds under a convertible loan agreement, or by an equity investment. The Deep Med convertible loan bears interest at the annual rate of 6% and ~~internationally.~~is repayable after 5 years. The Company ~~accounted for~~has the above changes as a waiver of Mr. Carmer’s accrued salary and modification of his options. As a result, a non-cash net income of $458 thousand was recorded within financial expenses in the year ended November 30, 2016.

~~F-27~~

~~NOTE 10 – REDEEMABLE NON CONTROLING INTEREST~~

On November 15, 2017 the Company, MaSTherCell and the Belgian Sovereign Funds Société Fédérale de Participations et d'Investissement (“SFPI”) entered into a Subscription and Shareholders Agreement (“SFPI Agreement” ) pursuant to which SFPI is making an equity investment in MaSTherCell in the aggregate amount of Euro 5 million (approximately $5.9 million), for approximately 16.7% of MaSTherCell. The equity investment commitment included the conversion of the outstanding loan of Euro 1 million (approximately $1.1 million) plus accrued interest in the approximate amount of Euro 70 thousand (approximately $77 thousand), previously made by SFPI to MaSTherCell (the “Loan Amount”).

Under the Agreement, an initial subscription amount of Euro 2 million ($2.3 million) has been paid and the outstanding Loan Amount been converted. The balance of approximately Euro 1.9 million ($2.2 million) is payable as needed by MaSTherCell and called in by the board of directors of MaSTherCell. The proceeds of the investment will be used to expand MaSTherCell’s facilities in Belgium by the addition of five new cGMP manufacturing cleanrooms. This expansion will position MaSTherCell as the European hub for the Company’s continental activities and strengthen its position in cell and gene manufacturing. The design enables MaSTherCell to offer full flexibility for production and process development. Under the Agreement, SFPI will be represented by one board member of the five board members of MaSTherCell. In addition, SFPI is entitled to designate one independent board member to the MaSTherCell board who is acceptable to the Company. The Agreement provides that, under certain specified circumstances where MaSTherCell breaches the terms of the Agreement, SFPI is entitled to put its equity interest in MaSTherCell to the Company at a price equal to the subscription price paid by SFPI, plus a specified annual premium ranging from 10% to 25%, depending on the year following the subscription in which the put is exercised. However, the agreement specifies that SFPI has a right to ~~such put provision if~~convert its holdings under the ~~Company is not listed on NASDAQ within six months from the date the SFPI Agreement. If the Company elects to terminate SFPI Agreement before its scheduled term~~loan into shares of seven years (or to not renew the agreement upon its scheduled termination), SFPI is entitled to put its MaSTherCell equity interest to the Company at fair market value (as determined by SFPI and the Company). Additionally, at any time during the first three years following the investment, SFPI is entitled to exchange its equity interest in MaSTherCellDeep Med, or into shares of the ~~Company’s Common Stock, at a rate equal to the subscription price paid by SFPI divided by $6.24 (subject to adjustment for certain capital events, such as stock splits).~~

~~The Agreement contains customary representations, warranties and covenants by MaSTherCell, in respect of which~~Deep Med JV entity once established. During twelve months ended December 31, 2022, the Company ~~has undertaken~~transferred $1.9 million to ~~indemnify SFPI for the consequences~~Deep Med as part of ~~any breach thereof by MaSTherCell.~~

~~The SFPI investment was presented as redeemable non-controlling interest in the balance sheet in the amount of $3,606 thousand.~~

~~NOTE 11 – EQUITY~~

a.~~Share Capital~~

~~The Company’s common shares are traded on the OTCQB Venture Market under OTC Market Group’s OTCQB tier~~its commitment under the ~~symbol “ORGS”.~~

~~On November 16, 2017,~~Deep Med JVA. The Company recorded the ~~Company implemented a 1:12 reverse stock split (the “Reverse Split”) of its authorized~~amounts paid to Deep Med under the Deep Med JVA as research 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 the Company is authorized to issue from time to time is 145,833,334 shares.

~~F-28~~

b. ~~Financings~~

1)development expenses under ASC 730. During the ~~year~~twelve months ended November 30, 2017 and 2016, the Company entered into definitive agreements with accredited and other qualified investors relating to a private placement (the “Private Placement”) of (i) 107,249 and 2,860,578 units, respectively. Each unit is comprised of (i) one share of the Company’s common stock and (ii) three-year warrant to purchase up to an additional one share of the Company’s Common Stock at a per share exercise price of $6.24 or $7.68. The purchased securities were issued pursuant to subscription agreements betweenDecember 31, 2023, the Company and Deep Med suspended all work under the purchasers for aggregate proceeds to the Company of $699 thousand and $1,488 thousand, respectively. Furthermore, in certain events the subscribers received anti-dilution protection for issuance at less than their purchase price.work plan pending further discussions.

2) In January 2017, the Company entered into definitive agreements with an institutional investor for the private placement of 2,564,115 units of the Company’s securities for aggregate subscription proceeds to the Company of $16 million at $6.24 price per unit. Each unit is comprised of one share of the Company’s Common Stock and a warrant, exercisable over a three-years period from the date of issuance, to purchase one additional share of Common Stock at a per share exercise price of $6.24. The subscription proceeds are payable on a periodic basis through August 2018. Each periodic payment of subscription proceeds will be evidenced by the Company’s standard securities subscription agreement.

During the year ended November 30, 2017 the investor remitted to the Company $4.5 million, in consideration of which, the investor is entitled to 721,160 shares of the Company’s Common Stock and three-year warrants to purchase up to an additional 721,160 shares of the Company’s Common Stock at a per share exercise price of $6.24. The Company allocated the proceeds based on the fair value of the warrants and the shares. The table below presents the allocation of the proceeds as of the closing date:

		~~Total Fair~~
		~~Value~~
		~~(in thousands)~~
~~Warrants component~~	$	~~1,516~~
~~Shares component~~		~~2,984~~
~~Total~~	$	~~4,500~~

As of November 30, 2017, 320,516 shares have not been issued and therefore the Company has recorded $1,483 thousand in receipts on account of shares to be allotted in the statement of equity. In connection therewith, the Company undertook to pay a fee of 5% resulting in the payment of $225 thousand (classified as Additional Paid-in Capital in the statement of equity) and the issuance of 36,063 restricted shares of Common Stock. The fair value of the shares as of the date of grant was $253 thousand using the share price on the date of grant. See also note 20(b).

c. ~~Contingent Shares~~

According to the share exchange agreement signed during 2015, the former shareholders of MaSTherCell received a “consideration of shares” of Orgenesis in exchange of their shares in MaSTherCell. At the time of MaSTherCell acquisition by Orgenesis, there was outstanding convertible bonds issued by MaSTherCell in an amount of $1.8 million (Euro 1.6 million).

In case MaSTherCell is repaying the principal amount and the accrued interest of the convertible bonds, the “consideration shares” received by the former shareholders will be reduced by the amount that was due to those bondholders who did not exchange their convertible bond. The consideration of shares will be released back to the Company proportionally to the holding of former shareholders. To that effect, the number of consideration shares to be released back to the Company, shall be determined by dividing the subscription amount of the outstanding convertible bonds plus interest owed thereunder (converted into USD according to the currency exchange rate applicable on the day of conversion) by the consideration and by applying the resulting quotient to actual total number of consideration shares received by former shareholder of MaSTherCell. In case of such release for cancellation of consideration shares, each former shareholder of MaSTherCell will give up for cancellation a part of its consideration shares that will be proportionate to such former shareholder’s share in the total number of consideration share issued at acquisition closing.

~~F-29~~

During January 2017 MaSTherCell repaid all but one of its bondholders and the aggregate payment amounted to $1.7 million (Euro1.5 million). According to the terms of the release back pursuant the share exchange agreement, the Company returned to treasury a total of 263,148 shares. These shares have been retired and cancelled. (See also Note 7(g)).

d. ~~Warrants~~

~~(1)~~~~Warrants which are subject to exercise price adjustments~~

Exercise Price /
Number of Adjusted
Issuance Warrants Issued Exercise Expiration
Date andOutstanding Price Date
October 2015 16,026 $6.24 March 2018
November 2015 657,597 $6.24 November 2018
December 2015 175,924 $6.24 December 2018
February 2016 16,026 $6.24 February 2019
March 2016 64,103 $6.24 March 2019
April 2016 40,859 $6.24 April 2019
May 2016 24,039 $6.24 May 2019
June 2016 72,117 $6.24 June 2019
1,066,691

~~(2)~~ ~~Warrants which are not subject to exercise price adjustments~~

Exercise Price /
Number of Adjusted
Grant Warrants Issued Exercise Expiration
Month and Outstanding Price Month
November 2013 16,668 $6 November 2018
October 2015 196,543 $6.24 October 2018
December 2015 2,552 $6.24 December 2018
April 2016 24,039 $6.24 April 2019
July 2016 10,016 $6.24 July 2019
August 2016 17,973 $6.24 August 2019
September 2016 641 $6.24 September 2019
October 2016 642 $6.24 October 2019
November 2016 70,033 $6.24 November 2019
December 2016 95,887 $6.24 December 2019
January 2017 76,655 $6.24 January 2020
February 2017 220,863 $6.24,$10.2 February 2020
March 2017 37,003 $6.24 March 2020
April 2017 123,896 $6.24,$7.8 April 2020
May 2017 100,162 $6.24 May 2020
June 2017 100,162 $6.24 June 2020
July 2017 80,129 $6.24 July 2020
August 2017 115,492 $6.24 August 2020
September 2017 7,697 $6.24 September 2020
October 2017 100,162 $6.24 October 2020
November 2017 86,539 $6.24 November 2020
1,483,754

~~F-30~~

NOTE 1214 –LOSS PER SHARE

The following table sets forth the calculation of basic and diluted loss per share for the periods indicated:

Year Ended
November 30,
2017 2016
(in thousands,
except per share data)
Basic:
Loss for the year $ 12,367 $ 11,113
Weighted average number of common shares outstanding 9,679,964 8,521,583
Basic loss per common share $ 1.28 $ 1.30
Diluted:
Loss for the year $ 12,367 11,113
Changes in fair value of embedded derivative and interest expenses on convertible bonds 392
Loss for the year $ 12,759 $ 11,113

Weighted average number of shares used in the computation of basic loss per share 9,679,964 8,521,583
Number of dilutive shares related to convertible bonds
Number of dilutive shares related to warrants 34,289
Weighted average number of common shares outstanding 9,714,252 8,521,583

Diluted loss per common share $ 1.31 $ 1.30

SCHEDULE OF BASIC AND DILUTED LOSS PER SHARE

	2023		2022
	Years ended December 31,
	2023		2022
	(in thousands, except per share data)
Basic and diluted:
Net loss attributable to Orgenesis Inc	$	55,361	$	14,889
Weighted average number of common shares outstanding		29,007,869		25,096,284
Net loss per share	$	1.91	$	0.59

For the year ended December 31, 2023, and December 31, 2022, all outstanding convertible notes, options, RSUs and warrants have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive. Diluted loss per share does not include ~~2,004,435~~7,904,416 shares underlying outstanding options, ~~2,088,239 shares issuable upon exercise of~~RSUs and warrants and ~~1,057,785~~7,157,753 shares upon conversion of convertible ~~notes~~loans for the year ended ~~November 30, 2017,~~December 31, 2023, because the effect of their inclusion in the computation would be anti-dilutive.

~~Basic loss per share for the year ended November 30, 2016, does not include 681,124 contingent shares.~~

Diluted loss per share does not include ~~1,420,446~~6,753,539 shares underlying outstanding options ~~1,620,965 shares issuable upon exercise of~~and warrants ~~32,212 shares due to stock-based compensation to service providers~~ and ~~655,269~~3,097,691 shares upon conversion of convertible ~~notes~~loans for the year ended ~~November 30, 2016,~~December 31, 2022, because the effect of their inclusion in the computation would be ~~anti-dilutive.~~antidilutive.

NOTE 1315 – STOCK-BASED COMPENSATION

a. ~~Global Share Incentive Plan~~

a.	Global Share Incentive Plan

~~On May 11, 2017, the annual meeting of the~~The Company’s stockholders have approved the 2017 Equity Incentive Plan (the “2017 Plan”) under which, the Company had reserved a pool of ~~1,750,000~~ 3,000,000 shares of the Company’s common stock, which may be issued at the discretion of the ~~Company's~~Company’s board of directors from time to time. Under this Plan, each option is exercisable into one share of common stock of the Company. The options may be exercised after vesting and in accordance with the vesting schedule that will be determined by the ~~Company's~~Company’s board of directors for each grant. The maximum contractual life term of the options is 10 years. As of December 31, 2023, total options available for grants under this plan are 301,991.

~~In addition,~~

On May 23, 2012, the ~~Company has one stock option plan,~~Company’s board of directors adopted the Global ~~share incentive plan (2012)~~Share Incentive Plan 2012 (the ~~“Plan”~~“2012 Plan”), under which, the Company had reserved a pool of ~~12,000,000~~ 1,000,000 shares of the Company’s common stock, which may be issued at the discretion of the ~~Company's~~Company’s board of directors from time to time. Under this ~~Plan,~~plan, each option is exercisable into one share of common stock of the Company. The options may be exercised after vesting and in accordance with the vesting schedule that will be determined by the ~~Company's~~Company’s board of directors for each grant. The maximum contractual life term of the options is 10 years. As of December 31, 2023, total options available for grants under this plan are 191,142.

~~F-31~~

F-39

b. ~~Options Granted to Employees and Directors~~

b.	Options Granted to Employees and Directors

Below is a table summarizing all of the options grants to employees and Directors made during the years ended ~~November 30, 2017,~~December 31, 2023, and ~~2016:~~December 31, 2022:

Year of No. of options Exercise price Vesting period Fair value at grant Expiration
grant granted (in thousands) period
Employees 2016 255,855 $0.0012-$4.32 vest immediately-2 years $697 10 years
Directors 2017 166,668 $4.80 2 years $ 558 10 years
Employees 2017 525,005 $4.8,$7.2 vest immediately-4 years $1,915 10 years

SCHEDULE OF EMPLOYEE STOCK OWNERSHIP PLAN DISCLOSURES

	Year Ended	No. of options granted		Exercise price		Vesting period	Fair value at grant (in thousands)		Expiration period
Employees	December 31, 2023		318,000		$0.45-$1.36	51% Quarterly over a period of two years and the rest quarterly over a period of four years		148	10 years

Directors	December 31, 2023		84,650	$	0.45	On the one-year anniversary		26	10 years

Employees	December 31, 2022		440,250		$2-$2.01	Quarterly over a period of two years	$	559	10 years

Directors	December 31, 2022		84,650		1.86	On the one-year anniversary	$	100	10 years

The fair value of each stock option grant is estimated at the date of grant using a Black Scholes option pricing model. The volatility is based on the historical volatility of the Company, by statistical analysis of the weekly share price for past periods based on expected term. The expected option term is calculated using the simplified method,as the Company concludes that its historical share option exercise experience does not provide a reasonable basis to estimate its expected option term. The fair value of each option grant is based on the following assumptions:

Year Ended November 30,
2017 2016
Value of one common share $4.68,$7.2 $0.28-$0.36
Dividend yield 0% 0%
Expected stock price volatility 93.8%-95.4% 87.4%-89%
Risk free interest rate 1.89%-1.76% 1.32%-1.33%
Expected term (years) 5 5

SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS

	Years Ended December 31,
	2023	2022
Value of one common share	$0.45-$1.36	$1.86-$2.01
Dividend yield	0%	0%
Expected stock price volatility	70%-80%	70%-71%
Risk free interest rate	3.9%-4.28%	3.61%-3.85%
Expected term (years)	5.5-6.06	5.5-5.56

A summary of the ~~Company's~~Company’s stock options granted to employees and directors as of ~~November 30, 2017~~December 31, 2023 and ~~2016 and changes for the years then ended~~December 31, 2022 is presented below:

2017 2016
Weighted Weighted
Average Average
Exercise Exercise
Number of Price Number of Price
Options $ Options $
Options outstanding at the beginning of the year 978,853 1.92 861,773 1.92
Changes during the year:
Granted 691,673 5.28 253,855 2.24
Expired (38,106 ) 7.58
Forfeited (27,365 ) 4.8
Re-designation to non- employee (see Note 9i) (136,775 ) 3.36
Options outstanding at end of the year 1,605,055 3.11 978,853 1.92
Options exercisable at end of the year 1,135,107 2.57 879,759 1.71

~~F-32~~SCHEDULE OF STOCK OPTIONS ACTIVITY

	Years Ended December 31
	2023					2022
	Number of Options			Weighted Average Exercise Price $		Number of Options			Weighted Average Exercise Price $
Options outstanding at the beginning of the period		3,035,465			4.17		3,210,005			4.05
Changes during the period:
Granted		402,650			0.64		524,900			1.98
Exercised*		-			-		(510,017	)		0.01
Expired		(178,837	)		4.92		(125,426	)		8.8
Forfeited		(231,809	)		1.04		(63,997	)-		4.13
Options outstanding at end of the period		3,027,469			3.89		3,035,465			4.17
Options exercisable at end of the period		2,740,382			4.18		2,565,919			4.51

*	During the year ended December 31, 2022, the Company received $6 thousand from the exercise of employee options for the purchase of 510,017 shares of the Company’s Common Stock at a weighted average price of $0.012.

F-40

The following table presents summary information concerning the options granted and exercisable to employees and directors outstanding as of ~~November 30, 2017:~~December 31, 2023 (in thousands, except per share data):

Weighted
Average Aggregate Aggregate
Exercise Number of Remaining Intrinsic Number of Exercisable
Price Outstanding Contractual Value Exercisable Options
$ Options Life $ Options Value $
(in thousands) (in thousands)
0.0012 462,015 5.78 2,079 442,593 1
0.012 278,191 4.18 1,249 278,191 3
4.32 25,000 8.43 113 9,375 41
4.8 583,338 9.03 235,938 1,133
6 33,334 6.67 33,334 200
6.36 20,834 2.55 20,834 133
7.2 83,334 9.51 - -
9 20,834 5.63 16,667 150
9.48 58,908 4.61 58,908 558
10.2 39,267 4.51 39,267 401
1,605,055 6.82 3,444 1,135,107 2,620

SCHEDULE OF STOCK OPTIONS EXERCISABLE

Exercise Price $		Number of Outstanding Options		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value $		Number of Exercisable Options		Aggregate Exercisable Options Value $
						(in thousands)				(in thousands)
	0.0012		230,189		0.64		115		230,189		-
	0.45		149,150		9.97		7		-		-
	1.86		84,650		8.99		-		84,650		157
	2.89		84,650		7.96		-		84,650		245
	2		321,878		7.67		-		249,566		499
	2.01		71,563		8.29		-		38,563		78
	2.96		47,250		5.03		-		47,250		140
	2.99		401,950		5.69		-		401,950		1,202
	3.14		2,500		5.91		-		2,500		8
	4.5		22,500		4.86		-		22,500		101
	4.6		140,800		6.96		-		140,800		648
	4.7		6,250		6.03		-		6,250		29
	4.8		483,337		2.94		-		483,337		2,320
	5.02		42,625		4.60		-		42,625		214
	5.07		49,500		5.19		-		49,500		251
	5.1		32,500		4.51		-		32,500		166
	5.12		97,375		6.40		-		97,375		499
	5.99		312,050		4.47		-		312,050		1,868
	6		16,667		0.59		-		16,667		100
	6.84		12,000		6.38		-		12,000		82
	7.2		83,334		3.43		-		83,334		600
	8.36		250,001		4.50		-		250,001		2,090
	8.91		15,000		4.46		-		15,000		134
			3,027,469		5.23		122		2,740,382		11,462

Costs incurred with respect to stock-based compensation for employees and directors for the years ended ~~November 30, 2017~~December 31, 2023 and ~~2016~~December 31, 2022 were ~~$1,536~~$485 thousand and ~~$1,103~~$917 thousand, respectively. As of ~~November 30, 2017,~~December 31, 2023, there was ~~$1,273~~$206 thousand of unrecognized compensation costs related to non-vested employees and directors stock options, to be recorded over the next ~~1.1~~3.75 years.

c. ~~Options Granted to Non- Employees~~

c.	Options Granted to Consultants and service providers

Below is a table summarizing all the compensation granted to consultants and service providers during the years ended ~~November 30, 2017~~December 31, 2023 and ~~2016:~~December 31, 2022:

SCHEDULE OF STOCK OPTIONS GRANTED TO CONSULTANTS

Year of grant

No. of options granted

Exercise price

Vesting period

Fair value at grant

(in thousands)

Expiration period

Non-employees

2023

8,335

1.36

Annually over a period of five years

10 years

Non-employees

2022

28,335

Quarterly over a period of two years

10 years

Fair value at
Year of No. of options Exercise grant Expiration
grant granted price Vesting period (in thousands) period
Non-employees 2016 83,333* $3.6 Quarterly over a period of one year $187 4 years
Non-employees 2017 16,668 $4.8 Quarterly over a period of one year $68 10 years

F-41

The fair value of options ~~had been immediately vested prior~~ granted during 2023 and 2022 to ~~such one-year period if there~~consultants and service providers, was ~~an acquisition of 40% or more of~~computed using the ~~Company or upon funding of $5 million, the criteria have not been completed in the first year.~~

~~F-33~~

Black-Scholes model. The fair value of each stock option grant is estimated at the date of grant using a Black Scholes option pricing model. The volatility is based on the historical volatility of the Company, by statistical analysis of the weekly share price for past periods based on the expected ~~term. The~~term period, the expected term is the ~~mid-point between the vesting date and the maximum~~ contractual term of each grant. The underlying data used for ~~each grant equal to~~computing the ~~contractual life. The~~ fair value of ~~each option grant is based on~~ the ~~following assumptions:~~options are as follows:

June 1, December 9, March 1,
2017 2016 2016
Value of one common share $7.44 $4.8 $3.6
Dividend yield 0% 0% 0%
Expected stock price volatility 95% 94% 87%
Risk free interest rate 1.76% 1.89% 1.19%
Expected term (years) 5 5 4

SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS

	Years Ended December 31,
	2023	2022
Value of one common share	$1.36	$2
Dividend yield	0%	0%
Expected stock price volatility	80%	84%
Risk free interest rate	4.07%	3.6%-3.61%
Expected term (years)	10	10

A summary of the ~~status of the~~Company’s stock options granted to consultants and service providers as of ~~November 30, 2017,~~December 31, 2023, and ~~2016 and changes for the years then ended~~December 31, 2022 is presented below:

2017 2016
Weighted Weighted
Average Average
Exercise Exercise
Number of Price Number of Price
Options $ Options $
Options outstanding at the beginning of the year 441,621 6.24 221,512 9.00
Changes during the year:
Granted 16,668 4.80 83,334 3.60
Expired 58,909 8.28
Re-designation to non-employee (see Note 9i) 136,775 3.36
Options outstanding at end of the year 399,380 7.47 441,621 6.24
Options exercisable at end of the year 379,712 5.76 387,284 5.70

SCHEDULE OF STOCK OPTIONS ACTIVITY

	Years Ended December 31,
	2023					2022
	Number of Options			Weighted Average Exercise Price $		Number of Options			Weighted Average Exercise Price $
Options outstanding at the beginning of the year		517,175			4.88		547,691			5.89
Changes during the year:
Granted		8,335			1.36		28,335			2.00
Expired		(23,334	)		6.04		(58,851	)		12.85
Forfeited		(235,109	)		4.42		-			-
Options outstanding at end of the year		267,067			5.07		517,175			4.88
Options exercisable at end of the year		206,062			5.71		453,005			5.11

The following table presents summary information concerning the options granted and exercisable to consultants and service providers outstanding as of ~~November 30, 2017~~December 31, 2023 (in thousands, except per share data):

Weighted
Average Aggregate Number of Aggregate
Exercise Number of Remaining Intrinsic Exercisable Exercisable
Price Outstanding Contractual Value* Options Options
$ Options Life $ Value $
(in thousands) (in thousands)
4.8 16,668 9.1 16,667 151
3.36 136,775 8.4 156 136,775 1,153
3.60 83,334 8.3 75 83,334 689
6.00 90,000 6.7 72,000 481
6.24 8,334 7.5 8,334 25
7.32 16,668 7.3 16,668 85
11.52 8,334 5.4 6,667 36
16.80 39,267 4.4 39,267 172
399,380 7.47 $ 231 379,712 $ 2,792

~~F-34~~SCHEDULE OF STOCK OPTIONS EXERCISABLE

Exercise Price $		Number of Outstanding Options		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value $		Number of Exercisable Options		Aggregate Exercisable Options Value $
						(in thousands)				(in thousands)
	2		28,335		8.46		-		-		-
	2.96		7,500		7.96		-		7,500		22
	2.99		20,000		6.22		-		20,000		60
	4.09		25,000		5.76		-		25,000		102
	4.42		5,125		3.93		-		5,125		23
	4.5		13,335		5.53		-		5,000		23
	4.6		20,000		6.96		-		4,000		18
	4.8		8,334		2.94		-		8,334		40
	5.07		5,000		5.19		-		5,000		25
	5.3		15,000		4.70		-		15,000		80
	5.99		16,670		4.81		-		16,670		100
	6.84		7,500		6.38		-		7,500		51
	7		70,000		5.83		-		70,000		490
	8.34		8,600		4.52		-		8,600		72
	8.43		8,333		4.05		-		8,333		70
			267,067		6.03		-		206,062		1,176

Costs incurred with respect to options granted to consultants and service providers for the ~~year~~years ended ~~November 30, 2017~~December 31, 2023 and ~~2016 was $322 thousand~~December 31, 2022 were $63 and ~~$2,543 thousand,~~$64, respectively. As of ~~November 30, 2017,~~December 31, 2023, there was ~~$22 thousand~~$61 of unrecognized compensation costs related to non-vested consultants and service providers, to be recorded over the next ~~2.55~~2.03 years.

d. ~~Warrants Issued~~

F-42

d.	Restricted Stock Units (“RSUs”) Granted to Employees

Below is a table summarizing all the RSUs grants to ~~Non-Employees~~employees and made during the years ended December 31, 2023:

~~1) During the year ended November 30, 2016, the Company granted to several consultants 89,288 warrants each exercisable at $6.24 per share for three years.~~

SCHEDULE OF STOCK OPTIONS GRANTED TO EMPLOYEES

Year Ended

No. of options

granted

Vesting period

Fair value at grant

(in thousands)

Employees

December 31, 2023

142,000

Quarterly over a period of two years

The fair value of ~~those options as~~each RSUs grant is estimated based on the market value of the underlying stock at the date of ~~grant using~~grant.

A summary of the ~~Black-Scholes valuation model was $219 thousand, out~~Company’s RSUs granted to employees as of ~~which $64 thousand~~December 31, 2023 is ~~related~~presented below:

SCHEDULE OF STOCK OPTIONS ACTIVITY GRANTED TO EMPLOYEES

	Years Ended December 31
	2023
	Number of RSUs
Options outstanding at the beginning of the period		-
Changes during the period:
Granted		142,000
Expired		-
Forfeited		-
Options outstanding at end of the period		142,000

The following table presents summary information concerning the options granted and exercisable to ~~22,621 warrants granted~~employees and directors outstanding as ~~a success fee~~of December 31, 2023 (in thousands, except per share data):

SCHEDULE OF STOCK OPTIONS EXERCISABLE

Number of

Outstanding

RSUs

Weighted Average

Remaining

Contractual

Life

Aggregate

Intrinsic

Value

Number of

Exercisable

RSUs

Aggregate

Exercisable

RSUs

Value $

(in thousands)

142,000

9.99

No costs incurred with respect to RSUs compensation for employees for the ~~issuance~~years ended December 31, 2023. As of December 31, 2023, there was $50 of unrecognized compensation costs related to non-vested employees RSUs, to be recorded over the next 2.26 years.

F-43

NOTE 16 – TAXES

a.	Corporate taxation in the U.S.

The corporate U.S. Federal Income tax rate applicable to the Company and its US subsidiaries is 21%.

As of December 31, 2023, the Company has an accumulated tax loss carryforward of approximately $36 million (as of December 31, 2022, approximately $22 million).

For U.S. federal income tax purposes, net operating losses (“NOLs”) arising in tax years beginning after December 31, 2017, the Internal Revenue Code of 1986, as amended (the “Code”) limits the ability to utilize NOL carryforwards to 80% of taxable income in tax years beginning after December 31, 2020. In addition, NOLs arising in tax years ending after December 31, 2017 can be carried forward indefinitely, but carryback is generally prohibited. NOLs generated in tax years beginning before January 1, 2018 will not be subject to the taxable income limitation, and NOLs generated in tax years ending before January 1, 2018 will continue to have a two-year carryback and twenty-year carryforward period. Deferred tax assets for NOLs will need to be measured at the applicable tax rate in effect when the NOL is expected to be utilized. The changes in the carryforward/carryback periods as well as the new limitation on use of NOLs may significantly impact the Company’s valuation allowance assessments for NOLs generated after December 31, 2017.

In addition, utilization of the ~~convertible notes.~~

~~2) During the year ended November 30, 2017, the Company granted~~NOLs may be subject to ~~several consultants 53,148 warrants each exercisable at $6.24 or $10.2 per share for three years. The fair value of those options as~~substantial annual limitation under Section 382 of the ~~date~~Code due to an “ownership change” within the meaning of ~~grant using the Black-Scholes valuation model was $211 thousand, out of which $169 thousand is related to 38,001 warrants granted as a success fee with respect to the issuance~~Section 382(g) of the ~~convertible notes~~.

e.~~Shares Issued~~Code. An ownership change subjects pre-ownership change NOL carryforwards to ~~Non-Employees~~

~~1) On March 1, 2016,~~an annual limitation, which significantly restricts the ~~Company entered into a consulting agreement for a period of one year. Under~~ability to use them to offset taxable income in periods following the ~~terms of~~ownership change. In general, the ~~agreement,~~annual use limitation equals the ~~Company granted the consultant 20,834 shares of restricted common stock. The fair~~aggregate value of the ~~shares as~~Company’s stock at the time of the ~~date of grant was $75 thousand. In addition, the Company had to pay~~ownership change multiplied by a retainer fee of $10,000 per month, consisting of $5,000 cash per month and $5,000 shall be payable in shares of the Company’s common stock at a value equal to the price paid for an equity capital raise of at least $3 million (the “financing”). specified tax-exempt interest rate.

b.	Corporate taxation in Israel

The cash fee per month and shares shall be issued upon completion of the financing. The fair value of the shares as of November 30, 2016, was $34 thousand. The consultant has not met the financing criteria therefore the Company has not issued additional shares under this agreement.

2) On April 27, 2016, the Company entered into consulting agreements for a period of one year with two consultants. Under the terms of the agreements, the Company agreed to grant the consultants an aggregate of 100,001 shares of restricted common stock that vested on the grant date. The fair value of the shares as of the date of grant was $336 thousand.

3) On May 1, 2016, the Company entered into a consulting agreement for a period of one year. Under the terms of the agreement, the Company agreed to grant a consultant 83,334 shares of restricted common stock, of which the first 29,167 shares vested immediately, 29,167 shares are to vest 90 days following the agreement date and 25,000 shares are schedule to vested 180 days following the agreement date. The fair value of the shares as of the date of grants of these three tranches was $383 thousand.

~~NOTE 14 – TAXES~~

a. ~~The Company and the US Subsidiary~~

~~The Company and the US Subsidiary~~Israeli Subsidiaries are taxed ~~according to~~in accordance with Israeli tax ~~laws of the United States.~~laws. The ~~income of the Company is taxed in the United States at a federal tax rate of up to 35% and state tax rate of 8.25% .~~

~~On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “TCJA”), which among other changes reduces the federal~~ corporate tax rate applicable to ~~21%~~2023 and 2022 are 23%. ~~The Company is currently evaluating the impact~~

As of December 31, 2023, the ~~TCJA on its consolidated financial statements and does not expect any material impact.~~

~~F-35~~

b. ~~The~~ Israeli Subsidiary has an accumulated tax loss carryforward of approximately $10 million (as of December 31, 2022, approximately $10 million). Under the Israeli tax laws, carryforward tax losses have no expiration date.

c.	Corporate taxation in Belgium

The ~~Israeli~~Belgian Subsidiary is ~~taxed according to Israeli tax laws.~~
~~In January 2016, the Law for the Amendment of the Income Tax Ordinance (No. 216) was published, enacting a reduction of corporate tax rate in 2016 and thereafter, from 26.5% to 25%.~~

In December 2016, the Economic Efficiency Law (Legislative Amendments for Implementing the Economic Policy for the 2017 and 2018 Budget Year), 2016 was published, introducing a gradual reduction in corporate tax rate from 25% to 23%. However, the law also included a temporary provision setting the corporate tax rate in 2017 at 24%. As a result, the corporate tax rate in 2017 was 24% and in 2018 and thereafter reduced to 23%.

c.~~The Belgian Subsidiaries~~

~~The Belgian Subsidiaries are~~ taxed according to Belgian tax laws. The ~~regular~~ corporate tax ~~rate in Belgium for 2016 and 2017 is 34%~~rates applicable to 2023, 2022 are 25%.

~~On 22~~

As of December ~~2017,~~31, 2023, the Belgian ~~Parliament~~Subsidiary has ~~approved~~an accumulated tax loss carryforward of approximately $8 million (€ 7 million), (as of December 31, 2022 $7 million). Under the Belgian ~~reform bill. The main impacts~~tax laws there are limitation on accumulated tax loss carryforward deductions of ~~this tax reform are:~~

~~A decrease of the nominal tax rate from 34% to 30% in 2018 and 25% in 2020~~
~~Limitation of deductions on the taxable basis (i.e. carried forward losses, notional interests…) meaning that there will be a minimum taxable basis (if profit above~~ Euro 1 ~~million)~~
~~Tax supplements resulting from a tax audit will constitute a minimum tax base~~

d.~~Tax Loss Carryforwards~~ million per year.

1) As of November 30, 2017, the Company had net operating loss (NOL) carry forwards equal to $12.8 million that is available to reduce future taxable income. Out of the Company’s NOL carry forward, an amount of $138 thousand may be restricted under Section 382 of the Internal Revenue Code (“IRC”). IRC Section 382 applies whenever a corporation with an NOL experiences an ownership change. As a result of Section 382, the taxable income for any post change year that may be offset by a pre-change NOL may not exceed the general Section 382 limitation, which is the fair market value of the pre-change entity multiplied by the long-term tax exempt rate.

F-44

e.	Deferred Taxes

2) U.S. Subsidiary - As of November 30, 2017, the U.S. Subsidiary had approximately $276 thousand of NOL carry forwards that are available to reduce future taxable income with no limited period of use.

3) Israeli Subsidiary - As of November 30, 2017, the Israeli Subsidiary had approximately $5.8 million of NOL carry forwards that are available to reduce future taxable income with no limited period of use.

4) Belgian Subsidiaries - As of November 30, 2017, the Belgian Subsidiaries had approximately $15.8 million (€13.3 million) of NOL carry forwards that are available to reduce future taxable income, with no limited period of use.

~~F-36~~

e. ~~Deferred Taxes~~

The following table presents summary of information concerning the Company’s deferred taxes as of the ~~periods~~years ending ~~November 30, 2017~~December 31, 2023 and ~~2016 (in thousands):~~December 31, 2022:

November 30,
2017 2016
(U.S dollars in thousands)
Net operating loss carry forwards $ 11,819 $ 8,278
Research and development expenses 1,065 655
Employee benefits 180 152
Property and equipment (61 ) (355 )
Convertible bonds 1
Deferred income (292 ) (325 )
Intangible assets (5,117 ) (5,117 )
Less: Valuation allowance (8,284 ) (5,151 )
Net deferred tax liabilities $ (690 ) $ (1,862 )

SCHEDULE OF DEFERRED TAX ASSETS

	2023			2022
	December 31,
	2023			2022
	(U.S. dollars in thousands)
Deferred tax assets (liabilities), net:
Net operating loss carry forwards	$	12,331		$	10,387
Research and development expenses		3,932			1,893
Equity compensation		1,563			1,616
Employee benefits		70			191
Property, plants and equipment		(26	)		(55	)
Leases asset		66			191
Lease liability		(67	)		(132	)
Loans		-			50
Partnership Investment		8,627			2,582
Intangible assets		(1,629	)		(2,252	)
Bad debt allowance		575			-
Other		1,088			385
Deferred tax assets gross		26,530			14,856

Valuation allowance		(26,530	)		(14,753	)
Net deferred tax liabilities	$	-		$	103

Realization of deferred tax assets is contingent upon sufficient future taxable income during the period that deductible temporary differences and carry forwards losses are expected to be available to reduce taxable income. As the achievement of required future taxable income is not considered more likely than not achievable, the Company and all of its subsidiaries ~~except MaSTherCell~~ have recorded full valuation allowance.

The changes in valuation allowance are comprised as follows:

Year Ended November 30,
2017 2016
(U.S dollars in thousands)
Balance at the beginning of year . $ (5,151 ) $ (2,982 )
Additions during the year (3,207 ) (2,169 )
Balance at end of year $ (8,358 ) $ (5,151 )

f. ~~Reconciliation of the Theoretical Tax Expense to Actual Tax Expense~~

SCHEDULE OF VALUATION ALLOWANCE ACTIVITY

	December 31,
	2023			2022
	(U.S dollars in thousands)
Balance at the beginning of year	$	(14,753	)	$	(12,805	)
Deconsolidation of Octomera		1,252			-
Change during the year		(13,029	)		(1,948	)
Balance at end of year	$	(26,530	)	$	(14,753	)

f.	Reconciliation of the Theoretical Tax Expense to Actual Tax Expense

The main reconciling item between the statutory tax rate of the Company and the effective rate is the provision for ~~full~~ valuation allowance with respect to tax benefits from carry forward tax losses.

g.~~Tax Assessments~~

g.	Uncertain Tax Provisions

~~1) The Company -~~ASC Topic 740, “Income Taxes” requires significant judgment in determining what constitutes an individual tax position as well as assessing the outcome of each tax position. Changes in judgment as to recognition or measurement of tax positions can materially affect the estimate of the effective tax rate and consequently, affect the operating results of the Company. As of ~~November 30, 2017, the Company has received a final tax assessment up to the year 2010.~~

~~2) U.S. Subsidiary and the Israeli Subsidiary - As of November 30, 2017, the U.S. Subsidiary and the Israeli Subsidiary have not received any final tax assessment.~~

~~3) Belgian Subsidiary - As of November 30, 2017, the Belgian Subsidiary has received a final tax assessment for the year 2014.~~

~~4) MaSTherCell - As of November 30, 2017, MaSTherCell has received a final tax assessment for the year 2013.~~

h. ~~Uncertain Tax Provisions~~

~~As of November 30, 2017,~~December 31, 2023, the Company has not accrued a provision for uncertain tax positions.

~~F-37~~

F-45

NOTE ~~15 - FAIR VALUE PRESENTATION~~17 – REVENUES

Disaggregation of Revenue

The following table disaggregates the Company’s revenues by major revenue streams.

SCHEDULE OF DISAGGREGATION OF REVENUE

	2023		2022
	Years Ended December 31,
	2023		2022
	(in thousands)
Revenue stream:
POCare development services	$	-	$	14,894
Cell process development services and hospital services		515		11,212
POCare cell processing		-		9,919
License fees		15		-
Total	$	530	$	36,025

A breakdown of the revenues per customer what constituted at least 10% of revenues is as follows:

SCHEDULE OF BREAKDOWN OF REVENUES PER CUSTOMER

	2023		2022
	Years Ended December 31,
	2023		2022
	(in thousands)
Revenue earned:
Customer A (United States)		280		-
Customer B (United States)		90		-
Customer C (United States)		130		-
Customer D (Greece)		-		8,936
Customer E (United States)		-		8,316
Customer F (United Arab Emirates)		-		5,271
Customer G (Korea)		-		3,873
Revenue earned		-		3,873

Contract Assets and Liabilities

Contract assets are mainly comprised of accounts receivable net of allowance for doubtful debts, which includes amounts billed and currently due from customers.

The activity for accounts receivable is comprised of:

SCHEDULE OF ACTIVITY FOR TRADE RECEIVABLES

	2023			2022
	Years Ended December 31,
	2023			2022
	(in thousands)

Balance as of beginning of period	$	36,183		$	15,245
Deconsolidation of Octomera		(5,985	)		-
Business combination TLABS		-			(1,339	)
Additions		560			35,103
Collections		(6,230	)		(12,728	)
Allowances for credit losses		(24,388	)		-
Exchange rate differences		(52	)		(98	)
Ceased to be a related party		-			(2,186	)
Balance as of end of period	$	88		$	36,183

The activity of the related party included in the accounts receivable activity above is comprised of:

	2022
	Years Ended December 31,
	2022

Balance as of beginning of period	$	1,972
Additions		1,284
Collections		(1,070	)
Ceased to be a related party		(2,186	)
Balance as of end of period	$	-

F-46

The activity for contract liabilities is comprised of:

SCHEDULE OF ACTIVITY FOR CONTRACT LIABILITIES

	2023			2022
	Years Ended December 31,
	2023			2022
	(in thousands)

Balance as of beginning of period	$	70		$	59
Deconsolidation of Octomera		(106	)		-
Additions		236			11
Balance as of end of period	$	200		$	70

NOTE 18 – COST OF DEVELOPMENT SERVICES AND RESEARCH AND DEVELOPMENT EXPENSES

SCHEDULE OF RESEARCH AND DEVELOPMENT EXPENSES

	2023			2022
	Years Ended December 31,
	2023			2022
	(in thousands)

Salaries and related expenses	$	4,800		$	11,206
Stock-based compensation		210			616
Subcontracting, professional and consulting services		3,662			5,655
Lab expenses		377			2,685
Depreciation expenses		312			1,017
Other research and development expenses		1,542			6,010
Less – grant		(280	)		(123	)
Total	$	10,623		$	27,066

NOTE 19 – FINANCIAL EXPENSES, NET

SCHEDULE OF FINANCIAL EXPENSES

	2023		2022
	Years Ended December 31,
	2023		2022
	(in thousands)
Interest expense on convertible loans	$	2,167	$	1,824
Foreign exchange loss, net		325		145
Other expense		7		2
Total	$	2,499	$	1,971

F-47

NOTE 20 – RELATED PARTIES TRANSACTIONS

a.	Related Parties presented in the consolidated statements of comprehensive loss

SCHEDULE OF RELATED PARTY TRANSACTIONS

	Years ended December 31,
	2023		2022
	(in thousands)
Stock-based compensation expenses to executive officers	$	78	$	111
Stock-based compensation expenses to Board Members	$	99	$	152
Compensation of executive officers	$	690	$	669
Management and consulting fees to Board Members	$	380	$	380
Revenues from customer	$	-	$	1,284
Financial income	$	-	$	126

b.	Related Parties presented in the consolidated balance sheets

SCHEDULE OF RELATED PARTIES PRESENTED IN CONSOLIDATED BALANCE SHEETS

	December 31,
	2023		2022
	(in thousands)

Executive officers’ payables	$	150	$	80
Non-executive directors’ payable	$	938	$	558

NOTE 21 – LEGAL PROCEEDINGS

On January 18, 2022, a complaint (the “Complaint”) was filed in the Tel Aviv District Court (the “Court”) against the Company, Orgenesis LTD (“the Israeli Subsidiary”), Prof. Sarah Ferber, Vered Caplan and Dr. Efrat Asa Kunik (collectively, the “defendants”) by plaintiffs the State of Israel, as the owner of Chaim Sheba Medical Center at Tel Hashomer (“Sheba”), and Tel Hashomer Medical Research, Infrastructure and Services Ltd. (collectively, the “plaintiffs”). In the Complaint, the plaintiffs are seeking that the Court issue a declaratory remedy whereby the defendants are required to pay royalties to the plaintiffs at the rate of 7% of the sales and 24% of any and all revenues in consideration for sublicenses related to any product, service or process that contain know-how and technology of Sheba and any and all know-how and technology either developed or supervised by Prof. Ferber in the field of cell therapy, including in the category of the point-of-care platform and any and all services and products in relation to the defendants’ CDMO activity. In addition, the plaintiffs seek that the defendants provide financial statements and pay NIS 10,000 to the plaintiffs due to the royalty provisions of the license agreement, dated February 2, 2012, between the Israeli subsidiary and Tel Hashomer Medical Research, Infrastructure and Services Ltd. (the “License Agreement”). The Complaint alleges that the Company and the Israeli subsidiary used know-how and technology of Sheba and know-how and technology either developed or supervised by Prof. Ferber while employed by Sheba in the field of cell therapy, including in the category of the point-of-care platform and the services and products in relation to the defendants’ CDMO activity and are entitled to the payment of certain royalties pursuant to the terms of the License Agreement. The defendants have filed their statements of defense responding to this Complaint, the Plaintiffs filed their response and the parties are now conducting disclosure proceedings in accordance with Israel’s civil regulations. In accordance with Israel’s civil regulations, the parties considered alternative means to resolve at least some of the disputes and have consented to engage the services of a mutually agreeable mediator. The mediation is scheduled to take place in the coming months. According to management’s estimation, since a loss is not considered probable, no provision was made in the financial statements.

F-48

On September 6, 2023, a claim (the “Claim”) was filed in the Tel Aviv District Court (the “Court”) against the Company, the Israeli Subsidiary, Octomera LLC, Orgenesis Biotech Israel LTD, Theracell Laboratories Private Company and Vered Caplan (collectively, the “defendants”) by Ehud Almon (Plaintiff) for certain finders’ fees and / or royalties related to sales made by an Octomera subsidiary to a Greek entity in the amount of $896K and also for other means of compensation. The Israeli Subsidiary and Vered Caplan filed their statement of defense on January 28, 2024 claiming, inter alia, that the Plaintiff did not serve as a broker, but rather served as the Greek entity’s representative and as such he is not entitled to compensation of any kind from the defendants. It was also clarified that the defendants did not enter into a finder’s agreement with the Plaintiff. Additionally, The Israeli subsidiary and Vered Caplan claimed that the Plaintiff concealed material information from the court, including the signed partnership agreement between the Greek entity’s owner and the Plaintiff, as well as certain criminal charges brought against him in Greece. On February 22, 2024, the Plaintiff filed a request for service of process to deliver the Claim to the Company and the other defendants incorporated outside of Israel. This request was denied on the same day. As such, the Claim has yet to be legally delivered to the defendants incorporated outside of Israel (including the Company). According to management’s estimation, since the likelihood of Plaintiff winning the case is less than fifty percent, no provision was made in the financial statements.

On October 26, 2023, a complaint was filed in the Supreme Court of the State of New York by plaintiffs Southern Israel Bridging Fund Two LP and Mr. Amir Hasidim, against the Company, seeking the payment of $1,150 together with interest in the amount of 6%. In the Complaint plaintiff’s alleged the amount provided to the Company was based on a Convertible Loan Agreement dated May 17, 2022, which provided for a loan amount of $5,000. Notwithstanding the Convertible Loan Agreement, on August 21, 2023, Company sent the plaintiffs an offset notice in light of the plaintiffs’ breach of obligations under the Convertible Loan Agreement and the damages caused to the Company as a result of said breach. The Company ~~measures fair value~~counter sued as well, seeking damages for Plaintiff’s breach of contract, fraud and ~~discloses fair value measurements for financial assets~~harassment. Accordingly, the Company disputes whether it owes plaintiffs the amount sought in the Complaint.

On November 1, 2023, a claim (the “Claim”) was filed in the Tel Aviv District Court (the “Court”) against the Company, the Israeli Subsidiary, and ~~liabilities. Fair value~~Vered Caplan (collectively, the “defendants”) by Fidelity Venture Capital Ltd. and Dror Atzmon (together – “the Plaintiffs”). The claim is based on two agreements the Company entered into with the Plaintiffs on November 2, 2016: (a) an unsecured convertible note agreements for an aggregate amount of NIS 1 million ($280 thousand). The loan bears a monthly interest rate of 2% and will mature on May 1, 2017, unless converted earlier and (b) a consultation agreement which awarded the Plaintiffs 800 thousand warrants. The exercise price ~~that would be received~~of the warrants and conversion price were fixed at $0.52 per share (pre-reverse stock split implemented by the Company in November 2017). On April 27, 2017, and November 2, 2017, the Company entered into extension agreements through November 2, 2017 and May 2, 2018, respectively, in connection with the convertible note agreements. In March 2018, the Plaintiffs submitted a notice of their intention to ~~sell an asset or paid~~convert into shares the Company’s common stock, the principal amount of the loan, and accrued interest of approximately $383 thousand outstanding. In addition, the Plaintiffs exercised all the warrants awarded in the consultation agreement. In light of the reverse stock split which took place in November 2017, the Company disagreed with the plaintiffs’ calculations regarding the number of issuable shares of Common Stock. The Company responded to ~~transfer a liability~~the notice and rejected these contentions in their entirety. In April 2018, the Company terminated the agreements based on several claims, including mistake, intentional misrepresentation and bad faith. Therefore, the Company deposited the shares in total amount of 107,985 issued under those agreements and the principal amount and accrued interest of the loan in an ~~orderly transaction between market participants at the measurement date.~~escrow account. The ~~accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:~~

•	~~Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.~~
•	~~Level 2: Observable inputs that are based on inputs not quoted on active markets but corroborated by market data.~~
•	~~Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.~~

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible, and considers credit risk in its assessment of fair value.

~~As of November 30, 2017, and 2016, the Company’s liabilities that are measured at fair value and classified as level 3 fair value are as follows (in thousands):~~

November 30, November 30,
2017 2016
Level 3 Level 3
Embedded derivatives convertible loans *⁽¹⁾ (37 ) 240
CALL/PUT option derivative⁽¹⁾ (339 ) 273
Convertible bonds⁽²⁾ $ - $ 1,818

* The embedded derivative is presented in the Company's balance sheets on a combined basis with the related host contract (the convertible loans).

⁽¹⁾ ~~The fair value is determined by using a Black-Scholes Model.~~
⁽²⁾ ~~The fair value~~deposit of the ~~convertible bonds described in Note 3 is determined by using a binomial model for the valuation of the embedded derivative~~principal amount and the fair value of the bond was calculated based on the effective rate on the valuation date (6%). The binomial model used the forecast of the Company share price during the convertible bond's contractual term. Since the convertible bond is in Euro and the model is in USD, the Company has used the Euro/USD forward rates for each period. In order to solve for the embedded derivative fair value, the calculation was performedaccrued interest presented as ~~follows:~~

~~Stage A - The model calculates a number of potential future share prices of the Company based on the volatility and risk-free interest rate assumptions.~~
~~Stage B - the embedded derivative value is calculated "backwards" in a way that takes into account the maximum value between holding the bonds until maturity or converting the bonds.~~

~~F-38~~

~~The following table presents the assumptions that were used for the models as of November 30, 2017:~~

Embedded Put Option
Derivative Derivative
Fair value of shares of common stock $ 4.38
Expected volatility 77% 54%
Discount on lack of marketability - 12%
Risk free interest rate 1.21%-1.39% 1.44%
Expected term (years) 0.17-0.42 0.5
Expected dividend yield 0%

~~The following table presents the assumptions that were used for the models as of November 30, 2016:~~

Embedded Put Option
Derivative Derivative
Fair value of shares of common stock $ 4.68
Expected volatility 103% 63%
Discount on lack of marketability - -
Risk free interest rate 0.38%-0.62% 0.9%
Expected term (years) 0.08-0.42
Expected dividend yield 0%
Probability of external Investment in Atvio 20%
Orgenesis cost of debt 26%
Revenues Multiplier distribution 3.34

~~The table below sets forth a summary of the changes in the fair value of the Company’s financial liabilities classified as Level 3 for the year ended November 30, 2017:~~

Embedded Convertible Put Option
Derivatives Bonds Derivative

Balance at beginning of the year $ 240 $ 1,818 $ 273
Repayment (876 ) (1,827 )
Changes in fair value during the period 662 22 (612 )
Translation adjustments 11 (13 )
Balance at end of the year $ 37 $ - $ (339 )

~~(*) There were no transfers to Level 3 during the twelve months ended November 30, 2017.~~

~~The table below sets forth a summary of the changes in the fair value of the Company’s financial liabilities classified as Level 3 for the year ended November 30, 2016:~~

Embedded Convertible Put Option
Derivatives Bonds Derivative

Balance at beginning of the year $ 289 $ 1,888 $ -
Additions 40 273
Conversion (10 )
Changes in fair value during the period (87 ) (84 )
Changes in fair value due to extinguishment of convertible loan 8
Translation adjustments 11 14
Balance at end of the year $ 240 $ 1,818 $ 273

~~(*) There were no transfers to Level 3 during the twelve months ended November 30, 2016.~~

~~F-39~~

~~The Company has performed a sensitivity analysis of the results for the Put Option Derivative fair value as of November 30, 2017 with the following parameters:~~

Base -50% Base Base+50%
(in thousands)
Sensitivity analysis due to changes in the assumptions expected volatility $ 335 $ 339 $ 379
Sensitivity analysis due to changes in Atvio's FV 252 339 440

~~NOTE 16 – REVENUES~~

Year Ended November 30,
2017 2016
(in thousands)
Services $ 8,024 $ 4,683
Goods 2,065 1,714
Total $ 10,089 $ 6,397

~~NOTE 17 – RESEARCH AND DEVELOPMENT EXPENSES, NET~~

Year Ended November 30,
2017 2016
(in thousands)
Total expenses $ 3,326 $ 2,637
Less grants (848 ) (480 )
Total $ 2, 478 $ 2,157

~~NOTE 18 – FINANCIAL EXPENSES (INCOME), NET~~

Year ended November 30,
2017 2016
(in thousands)
Decrease in fair value of warrants and financial liabilities measured at fair value $ (902 ) $ (1,587 )
Stock-based compensation related to warrants granted due to issuance of credit facility 1,497 208
Interest expense on convertible loans 1,233 694
Foreign exchange loss, net 562 31
Other income 57 (5 )
Total $ 2,447 $ (659 )

~~F-40~~

~~NOTE 19- RELATED PARTIES TRANSACTIONS~~

1) ~~Related Parties presented in the consolidated statements of comprehensive loss~~

For the year ended November 30,
2017 2016
(in thousands)
Management and consulting fees to Board Members $ 25 $ 85
Stock Based Compensation expenses to Board Members 393 242
Compensation of executive officers 419 318
Stock Based Compensation expenses to executive officers 821 501
Interest Expenses on convertible loan from director $ 55 $ 2

2)~~Related Parties presented in the consolidated balance sheets~~

Year ended November 30,
2017 2016
(in thousands)

Convertible Loan from director $ 167 $ 112

Executive officers payables 358 308

Non-executive directors payable $ 316 $ 280

~~3) The balances with Related Parties~~restricted cash in the balance sheet ~~are mainly related~~as of December 31, 2023. Based on the calculation difference, in their Claim, the Plaintiffs request damages in the amount of NIS 40.14M, and the issuance of 11,869,600 shares of the Company. The defendants have yet to ~~on-going transactions between~~file their statement of defense. According to management’s estimation, since the likelihood of Plaintiff winning the case is less than fifty percent, no provision was made in the financial statements.

Except as described above, the Company ~~and the associates companies. See also Note 5.~~is not involved in any pending material legal proceedings.

F-49

NOTE ~~20-~~ 22 – SUBSEQUENT EVENTS

Private Placement Offering

On ~~December 6, 2017 the Board of Directors approved grant of 70,700 shares to several consultants and service providers.~~

b. On December 18, 2017, MaSTherCell received the approval of a new grant from Intitule ICONE with a financial support of Euro 1 million ($1.2 million) in program for development of iPS-derived Cortical Neurons. In December 2017, MaSTherCell received an advance payment of Euro 0.6 million ($0.7 million).

c. In December 2017 and February 2018, the institutional investor referred to in Note 11b(2), remitted to the Company $500 thousand in subscription proceeds entitling such investor to 80,128 shares of Common Stock and three-year warrants for an additional 80,128 shares. The Company has received as of February 28, 2018 a total of $5,000thousand out of the committed $16 million subscription proceeds.

~~d. In January 2018,~~March 3, 2024, the Company entered into a Securities Purchase Agreement with certain accredited investors, ~~relation services, marketing and related services agreement. Under the terms of the agreement,~~pursuant to which the Company agreed to ~~grant the consultants 100,000 shares of restricted common stock, of which the first 25,000 shares will vest immediately,~~issue and ~~75,000 shares are to vest monthly over 15 months commencing February 2018.~~

e. On January 28, 2018 the Company and Adva Biotechnology Ltd. ("Adva"), entered into a Master Services Agreement ("MSA"), under which the Company and/or its affiliates are to provide certain services relating to development of products to Adva, as may be agreed between the parties from time to time. Under the MSA, the Company undertook to provide Adva withsell, in kind funding in the form of materials and services having an aggregate value of $749,900 at the Company's own cost in accordance with a project schedule and related mutually acceptable project budget. In consideration for and subject to the fulfilment by the Company of such in-kind funding commitment, Adva agreed that upon completion of the development of the products, the Company and/or its affiliates and Adva shall enter into a supply agreement pursuant to which for a period of eight (8) years following execution of such supply agreement, the Company and/or its affiliates (as applicable) is entitled (on a non-exclusive basis) to purchase the products from Adva at a specified discount pricing from their then standard pricing . The Company and/or its affiliates were also granted a non-exclusive worldwide right to distribute such products, directly or through any of their respective contract development and manufacturing organization (CDMO) service centers during such term. The MSA shall remain in effect for 10 years unless earlier terminated in accordance with its terms.

~~F-41~~

~~f. During December 2017 thorough February 2018, the Company entered into definitive agreements with accredited and other qualified investors relating to~~ a private placement, ~~of (i) 408,454 units, Each unit is comprised of (i) one share~~2,272,719 shares of the Company’s common stock, par value $0.0001 per share, at a purchase price of $1.03 per share and ~~(ii) three-year warrant~~warrants to purchase up to 2,272,719 shares of Common Stock at an exercise price of $1.50 per share and warrants to purchase up to 2,272,719 shares of Common Stock at an exercise price of $2.00 per share (collectively, the “Warrants”). The Company received gross proceeds of approximately $2.3 million before deducting related offering expenses. The Offering closed on March 5, 2024.

The Warrants entitle the holders to purchase up to an ~~additional one share~~aggregate of ~~the Company’s~~2,272,719 shares of Common Stock at ~~a per share~~an exercise price of ~~$6.24,~~$1.50 per share and up to an aggregate of 2,272,719 shares of Common Stock at an exercise price of $2.00 per share. The Warrants are exercisable immediately and expire five years from the date of issuance.

Asset purchase agreement

On April 5, 2024, Orgenesis Maryland entered into an Asset Purchase and Strategic Collaboration Agreement (the “Purchase Agreement”) with Griffin Fund 3 BIDCO, Inc., (“Germfree”), for ~~aggregate proceeds~~the sale by Orgenesis Maryland of five OMPUL to Germfree, which will be incorporated into Germfree’s lease fleet and leased back to Orgenesis Maryland or third-party lessees designated by Orgenesis. Pursuant to the ~~Company~~Purchase Agreement, and upon the terms and subject to the conditions set forth therein, in consideration for the purchase of ~~$2.5 million~~the OMPULs, the Orgenesis Quality Management Systems Framework (“OQMSF”) and related intellectual property rights, Germfree will pay Orgenesis Maryland an aggregate purchase price of $8,340 subject to any final adjustment through the verification mechanism as set forth in the Purchase Agreement.

~~g. During December 2017~~

Pursuant to the Agreement, Germfree paid Orgenesis Maryland $750 on February 27, 2024 and ~~January 2018,~~$5,538 during April 2024.

Strategic Advisor Agreement

On March 7, 2024 (the “Effective Date”), the Company entered into ~~unsecured convertible note agreements~~a strategic advisor agreement with ~~accredited~~an individual relating to the provision of strategic advice and assistance to the Company for a term of 12 months, subject to earlier termination or ~~offshore investors~~extension for an ~~aggregate amount~~additional 12 months at the request of ~~$720 thousand. The notes bear an annual interest rate of 6% and mature in six months or two years from~~ the ~~closing date, unless earlier converted subject~~advisor. In consideration for such services, the Company agreed to (i) pay such individual $75,000 per quarter, (ii) issue 500,000 shares to such individual on the 90^th day after the Effective Date if such individual is providing services to the ~~terms defined in the agreements. The notes provide that the entire principal amount~~Company at such time and ~~accrued interest automatically convert into units as in the agreement under certain condition described in the agreement. In addition, the Company issued~~(iii) issue to ~~certain investors 40,064 three-year warrant~~such individual warrants to purchase up to ~~an additional one share of the Company’s Common Stock at a per share exercise price of $6.24.~~

~~Through February 27, 2018, $650 thousand in principal amount out of these convertible notes were converted into units of the Company's securities. See additional information in Note 20h.~~

h. During January and February 2018, holders of $6.8 million in principal and accrued interest of convertible notes with maturity dates between June 2018 and January 2020 converted these outstanding amounts, in accordance with the terms specified in such notes, into units of the Company’s securities at a deemed per unit conversion rate of $6.24, with each unit comprised of: (i) one (1) share of the Company’s Common Stock and (ii) one warrant, exercisable for a period of three years from the date of issuance, for an additional share500,000 shares of Common Stock at ~~a per share~~an exercise price of ~~$6.24. As a result of these conversions,~~$1.03, which vests one third on the ~~Company will issue 1,087,960 shares of Common Stock~~Effective Date, one third on the 90^th day after the Effective Date and ~~three-year warrants for an additional 1,087,960 shares of common stock at a per share exercise price of $6.24.~~one third on the 180^thday after the Effective Date.

~~F-42~~

F-50

Nevada		98-0583166
State or other jurisdiction		(I.R.S. Employer
of incorporation or organization		Identification No.)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		ORGS		The Nasdaq Capital Market

Large accelerated filer ~~[ ]~~☐	Accelerated filer ~~[ ]~~☐

Non-accelerated filer ~~[ ]~~☒	Smaller reporting company~~[X]~~☒
~~(Do not check if a smaller reporting company)~~Emerging growth company ☐

	Page
PART I
~~PART I~~	5

ITEM 1. BUSINESS	5

ITEM 1A. RISK FACTORS	24

ITEM 1B. UNRESOLVED STAFF COMMENTS	44 47

ITEM 1C. CYBERSECURITY	47

ITEM 2. PROPERTIES	44 50

ITEM 3. LEGAL PROCEEDINGS	45 50

ITEM 4. MINE SAFETY DISCLOSURES	45 50

PART II	46

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	46 50

ITEM 6. ~~SELECTED FINANCIAL DATA~~[RESERVED]	47 51

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	47 51

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	56 62

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	56 62

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	56 62

ITEM 9A. CONTROLS AND PROCEDURES	56 62

ITEM 9B. OTHER INFORMATION	58 63

~~PART III~~ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	58 63

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	58 63

ITEM 11. EXECUTIVE COMPENSATION	62 68

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	69 74

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	72 78

ITEM 14. PRINCIPAL ~~ACCOUNTING~~ACCOUNTANT FEES AND SERVICES	73 79

PART IV	74

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	74 80

ITEM 16. FORM 10-K SUMMARY	82

SIGNATURES	77 83

•●	~~Our~~our ability to generate revenue from the commercialization of our point-of-care cell therapy (“POCare”) to reach patients and to increase such revenues;
●	our ability to achieve profitability;
•●	our ability to ~~increase revenues~~manage our research and ~~raise sufficient capital or strategic business arrangements to expand our CDMO global network;~~ development programs that are based on novel technologies;
•●	our ability to grow the size and capabilities of our organization through further collaboration and strategic ~~alliances;~~alliances to expand our point-of-care cell therapy business;

●	our ability to control key elements relating to the development and commercialization of therapeutic product candidates with third parties;
•●	our ability to manage potential disruptions as a result of the continued impact of the coronavirus outbreak;
●	our ability to manage the growth of our ~~CDMO business;~~ company;
•●	our ability to attract and retain key scientific or management personnel and to expand our management team;
•●	the accuracy of estimates regarding expenses, future revenue, capital requirements, profitability, and needs for additional financing; and
•●	our belief that ~~one of~~ our ~~principal~~therapeutic related developments have competitive advantages ~~is our cell trans-differentiation technology being developed by our Israeli Subsidiary~~ and ~~being able to~~can compete favorably and profitably ~~as a Contract Development and Manufacturing Organization (“CDMO”)~~ in the ~~regenerative medicine sector;~~ cell and gene therapy industry.

•●	our ability to ~~grow~~adequately fund and scale our various collaboration, license, partnership and joint venture agreements for the ~~business~~development of ~~MaSTherCell, which we acquired in our fiscal year 2015, as our principal contract development~~therapeutic products and ~~manufacturing (CDMO) business;~~ technologies;
•●	our ability to ~~attract~~advance our therapeutic collaborations in terms of industrial development, clinical development, regulatory challenges, commercial partners and ~~retain customers;~~ manufacturing availability;
•●	our ability to ~~expand~~implement our POCare strategy in order to further develop and ~~maintain our CDMO business through strategic alliances, joint ventures and internal growth;~~ advance autologous therapies to reach patients;
•●	expectations regarding our ability to ~~fund the operational~~obtain and ~~capital requirements of the global expansion of our CDMO business;~~
•	our expectations regarding our expenses and revenue, including our expectations that our research and development expenses and selling, general and administrative expenses may increase in absolute dollars;
•	~~the successful integration of our clinical and CDMO strategy;~~
•	~~our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;~~
•	~~extensive industry regulation, and how that will continue to have a significant impact on our business, especially our product development, manufacturing and distribution capabilities; and~~

•	our ability to develop, through our Israeli Subsidiary and Belgian Subsidiary, to the clinical stage a new technology to transdifferentiate liver cells into functional insulin-producing cells, thus enabling normal glucose regulated insulin secretion, via cell therapy;
•	~~our belief that our diabetes-related treatment seems to be safer than other options;~~
•	~~expectations regarding the ability of our Israeli Subsidiary and our Belgian Subsidiary to obtain additional and~~ maintain existing intellectual property protection for our ~~technology~~technologies and therapies;
•●	our ability to commercialize products in light of the intellectual property rights of others;
•●	our ability to obtain funding necessary to start and complete such clinical trials;

•●	our ability to further our CGT development projects, either directly or through our JV partner agreements, and to fulfill our obligations under such agreements;
●	our belief that ~~Diabetes Mellitus will be one of the most challenging health problems in the 21st century~~our systems and ~~will have staggering health, societal~~therapies are as at least as safe and ~~economic impact;~~ as effective as other options;
•●	our relationship with Tel Hashomer Medical Research Infrastructure and Services Ltd. (“THM”) and the growing risk that THM may cancel or, at the very least continue to challenge, the License ~~Agreement;~~ Agreement with the Israeli Subsidiary;
•●	the outcome of certain legal proceedings that we are or may become involved in;
●	our license agreements with other institutions;
●	expenditures not resulting in commercially successful products;
●	our dependence on the financial results of our POCare business;
●	our ability to complete development, processing and then roll out Orgenesis Mobile Processing Units and Labs (“OMPULs”) generate sufficient revenue from our POCare Services; and
●	our ability to grow our POCare business and to develop additional joint venture relationships in order to produce demonstrable revenues.

●	A somatic cell therapy medicinal product (“STMP”) that contains cells or tissues that have been manipulated to change their biological characteristics or cells or tissues not intended to be used for the same essential functions in the body;
●	A tissue engineered product (“TEP”) that contains cells or tissues that have been modified so that they can be used to repair, regenerate, or replace human tissue; or
●	A gene therapy medicinal product (“GTMP”) that engineers genes that lead to a therapeutic, prophylactic, or diagnostic effect and, in many cases, work by inserting “recombinant” genes into the body, usually to treat a variety of diseases, including genetic disorders, cancer, or long-term diseases. In this case, a recombinant gene is a stretch of DNA that is created in the laboratory, bringing together DNA from different sources.

Therapy	Development Stage	Indication
Immuno-Oncology
HiCAR-T	Hospital exemption/ IND enabling studies	B-ALL, B-cell Lymphoma
T-LOOP	IND enabling studies	Solid Tumors
MDVAC	IND enabling studies	Solid Tumors
CeCART	Pre-clinical	Solid Tumors
Intra Nasal Delivery of Cell based Immunotherapy	Pre-clinical	Drug delivery technology, Glioblastoma
Intra Nasal Delivery of Cell based Immunotherapy	Pre-clinical	Drug delivery technology, Glioblastoma

Metabolic Diseases
KYSLECEL	Market approval in the US	TP-IAT
CellFix	Clinical use	Cartilage Defects
AutoSVF	Clinical development	Systemic ARDS, vascular disorders
MSCP	Pre-clinical	Wound healing
EVRD	Pre-clinical	CKD
KT-DM-103 and KT-CP-203 (3D-Printed Pancreatic Islets)	Pre-clinical	Type 1 diabetes and chronic pancreatitis
Bioxomes	Pre-clinical	Drug Delivery Technology
MSPP	Pre-clinical	Urinary Incontinence

Anti-Viral
RanTop, Ranpirnase Topical Formulation	Clinical development	Anti-viral/ Immune oncology
Autovac	Pre-clinical	Autologous viral vaccine

~~(1)~~	~~A higher number of companies in later phases of clinical trials;~~
~~(2)~~	~~Therapy companies requiring higher manufacturing abilities concurrent with a global reach; and~~
~~(3)~~	~~An increasing need for the manufacturing scalability provided by a CDMO.~~

•	~~Team of dedicated experts both from academic and industry backgrounds with a strong experience in cGMP dealing with not yet harmonized regulatory requirements (EMA, FDA);~~
•	~~State-of-the-art facilities located next to airports; and~~
•	~~Multi-continental footprints to deal with therapies administration at or nearby point of care as many cell therapy products have a short shelf life.~~

•	~~Quality and expertise of its services: Clients identify the excellence of its facility, quality system, and people as a major differentiating point compared to competitors; and~~
•	Flexible and tailored approach: MaSTherCell's philosophy is to build a true partnership with its clients and adapt itself to the clients’ needs, which entails no “off-the-shelf process” nor in-house technology platform, but a dedicated person in plant (of client), joint steering committees on each project and dedicated project managers.

●	Process development of therapies, process adaptation, and optimization inside the OMPULs, or “OMPULization”;
●	Adaptation of automation and closed systems to serviced therapies;
●	Incorporation of the serviced therapies compliant with GMP in the OMPULs that we designed and built;
●	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 (“CRO”) services for clinical trials.

•	~~Physiologically glucose-responsive insulin production within one week of AIP cell transplantation;~~
•	~~Insulin-independence within one month;~~
•	~~Single course of therapy (~10-year insulin-independence);~~
•	~~No need for concomitant immunosuppressive therapy;~~
•	~~Return to (near) normal quality of life for patients;~~
•	~~Single liver biopsy supplies unlimited source of therapeutic tissue (bio-banking for future use if needed);~~
•	~~Highly controlled and tightly closed GMP systems; and~~
•	~~Quality Control of final product upon release and distribution~~

	1)	~~A royalty of 3.5% of net sales;~~
	2)	~~16% of all sublicensing fees received;~~
	3)	An annual license fee of $15,000, which commenced on January 1, 2012 and is due once every year thereafter (the “Annual Fee”). The Annual Fee is non-refundable, but it shall be credited each year due, against the royalty noted above, to the extent that such are payable, during that year; and
	4)	~~Milestone payments as follows:~~

	a)	~~$50,000 on the date of initiation of phase I clinical trials in human subjects;~~
	b)	~~$50,000 on the date of initiation of phase II clinical trials in human subjects;~~
	c)	~~$150,000 on the date of initiation of phase III clinical trials in human subjects;~~
	d)	~~$750,000 on the date of initiation of issuance of an approval for marketing of the first product by the FDA; and~~
	e)	~~$2,000,000, when worldwide net sales of products have reached the amount of $150,000,000 for the first time, (The “Sales Milestone”).~~

●	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 Services SRL, which is currently focused on expanding our POCare Network in Belgium.
●	Orgenesis Germany GmbH, which is currently focused on providing CRO services to the POCare Network.
●	Orgenesis Korea Co. Ltd., which is a provider of cell-processing and pre-clinical services in Korea. Octomera owns 94.12% of the Korean Subsidiary.
●	Orgenesis Biotech Israel Ltd., which is a provider of process development and cell-processing services in Israel.
●	Orgenesis Australia PTY LTD, which was transferred to Octomera in January 2023 and is currently focused on the development of our POC Network in Australia.
●	Theracell Laboratories IKE (“Theracell Labs”), a Greek company currently focused on expanding our POCare Network.
●	ORGS POC CA Inc, incorporated in 2023, which is currently focussed on expanding our POCare Network in California.
●	Octo Services LLC, a Delaware entity incorporated in 2023.

●	Local Decentralization: POCare Centers are set up in preferred regions, based on nearby hospitals’ capacity needs, and support the POCare Services model by providing POCare Services.
●	Global Harmonization: The POCare Platform overcomes conventional processing challenges by enabling high quality standards and sterile, scalable onsite processing of CGTs orchestrated by the POCare Centers to service local hospitals. Processing infrastructure is harmonized and reproducible using the OMPUL. The use of an OMPUL can shorten implementation time from approximately 18-24 months to approximately 3-9 months, offers a more cost-effective environment and enables local scalability by connecting additional OMPULs. The network structure is supported and connected by the centralization of the harmonized best industry practices and standards to meet the highest quality standards (“QMS”, Quality Management System). Further global harmonization is implemented through standardization of the training programs, centralized data management and a unified supply chain.
●	OMPULization of Therapies: Strong process development capabilities are critical for any CGT to scale. All therapeutic candidates must undergo some level of process development to move from the discovery phase to the clinical phase, if only to establish the same protocols under GMP. The POCare Platform takes process development to the next level, implementing a process we call OMPULization. OMPULization includes unitizing the process to the exact specifications of the OMPUL so it can be rapidly implemented in OMPULs around the world. In addition, OMPULization incorporates the latest technology solutions to close and automate the process whenever possible.

•	~~United States: Orgenesis Maryland Inc. – This is the center of activity for North America currently focused on preparation for U.S. clinical trials.~~

•	~~European Union: Orgenesis SPRL – This is the center of activity for Europe, currently focused on process development and preparation of European clinical trials.~~

•	~~Israel: Orgenesis Ltd. – This is a research and technology center.~~

•●	Pre-clinical laboratory and animal tests conducted in compliance with ~~the~~ Good Laboratory Practice, or GLP, requirements to assess a drug’s biological activity and to identify potential safety problems, and to characterize and document the product’s chemistry, manufacturing controls, formulation, and stability;
•●	Submission to the FDA of an Investigational New Drug, or IND, application, which must become effective before clinical testing in humans can start;
•●	Obtaining approval of Institutional Review Boards, or IRBs, of research institutions or other clinical sites to introduce ~~a first human~~ biologic drug ~~candidate~~candidates into humans in clinical trials;
•●	Conducting adequate and well-controlled ~~human~~ clinical trials to establish the safety and efficacy of the product for its intended indication conducted in compliance with Good Clinical Practice, or GCP, requirements;
•●	Compliance with current ~~Good Manufacturing Practices (cGMP)~~GMP regulations and standards;
•●	Submission to the FDA of a Biologics License Application ~~(BLA)~~(“BLA”) for marketing that includes adequate results of pre-clinical testing and clinical trials;
•●	The FDA reviews the marketing application in order to determine, among other things, whether the product is safe, effective and potent for its intended uses; and
•●	Obtaining FDA approval of the BLA, including inspection and approval of the product manufacturing facility as compliant with ~~cGMP~~GMP requirements, prior to any commercial sale or shipment of the pharmaceutical agent. The FDA may also require post marketing testing and surveillance of approved products or place other conditions on the approvals.

•	~~Waiver of marketing application user fees – over $2 million; and~~
•	~~7-year Marketing Exclusivity if first approved.~~

●	Third parties to whom we may license or transfer development and commercialization rights for products covered by intellectual property rights may not be successful in their efforts and, as a result, we may not receive future royalty or other milestone payments relating to those products or rights.

●	Conditions in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and Israel’s war against them, may affect certain of our operations.

●	We have identified a material weakness in our internal control over financial reporting. Failure to achieve and maintain effective internal controls over financial reporting could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner, which could have an adverse impact on our business.

	●	developing and deploying consistent and reliable processes for removing the cells from the patient engineering cells ex vivo and infusing the engineered cells back into the patient;
	●	developing processes for the safe administration of these products, including long-term follow-up for all patients who receive our products;
	●	sourcing clinical and, if approved, commercial supplies for the materials used to manufacture and process our products;
	●	developing a manufacturing process and distribution network with a cost of goods that allows for an attractive return on investment;
	●	establishing sales and marketing capabilities after obtaining any regulatory approval to gain market acceptance; and
	●	maintaining a system of post marketing surveillance and risk assessment programs to identify adverse events that did not appear during the drug approval process.

•	●	identifying, recruiting, integrating, maintaining, and motivating additional employees;
•	●	managing our internal development efforts effectively, including the clinical and FDA review process for our product candidates, while complying with our contractual obligations to contractors and other third parties; and
•	●	improving our operational, financial and management controls, reporting systems, and procedures.

	●	collaborators may not perform their obligations as expected;
•	●	collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities;
•	●	collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing;
•	●	collaborators could fail to make timely regulatory submissions for a product candidate;
	●	collaborators may not comply with all applicable regulatory requirements or may fail to report safety data in accordance with all applicable regulatory requirements;
	●	collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates;
•	●	product candidates developed in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates;
	●	a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to their marketing and distribution;
•	●	collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;

•	●	disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our product candidates, or that result in costly litigation or arbitration that diverts management attention and resources;
•	●	collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; and
•	●	collaborators may own or co-own intellectual property covering our products that results from our collaborating with them and, in such cases, we would not have the exclusive right to commercialize such intellectual property.

●	decide to pursue a competitive potential product developed outside of the collaboration;
●	cannot obtain the necessary regulatory approvals;
●	determine that the market opportunity is not attractive; or
●	cannot manufacture or obtain the necessary materials in sufficient quantities from multiple sources or at a reasonable cost.

	●	patent applications may not result in any patents being issued;
•	●	patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage;
•	●	our competitors, many of whom have substantially greater resources and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use, and sell our potential product candidates;
•	●	there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and
•	●	countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates.

•●	decreased demand for our products;
•●	injury to our reputation;

•●	withdrawal of clinical trial participants and inability to continue clinical trials;
•●	initiation of investigations by regulators;
•●	costs to defend the related litigation;

●	a diversion of management’s time and our resources;
•●	substantial monetary awards to trial participants or patients;
•●	product recalls, withdrawals or labeling, marketing or promotional restrictions;
•●	loss of revenue;
•●	exhaustion of any available insurance and our capital resources;
•●	the inability to commercialize any product candidate; and
•●	a decline in our share price.

●	differing regulatory requirements in foreign countries, unexpected changes in tariffs, trade barriers, price and exchange controls, and other regulatory requirements;
●	economic weakness, including inflation, or political instability in particular foreign economies and markets;
●	compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad;
●	foreign taxes, including withholding of payroll taxes;
●	foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;
●	difficulties staffing and managing foreign operations;
●	workforce uncertainty in countries where labor unrest is more common than in the United States;
●	potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign laws;
●	challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States;
●	production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and
●	business interruptions resulting from geo-political actions, including war, and terrorism or disease outbreaks (such as the recent outbreak of COVID-19, or the novel coronavirus).

●	federal and state laws governing laboratory testing, including CLIA, and state licensing laws;
●	federal and state laws and enforcement policies governing the development, use and distribution of diagnostic medical devices, including laboratory developed tests, or LDTs;
●	federal, state and local laws governing the handling and disposal of medical and hazardous waste;
●	federal and state Occupational Safety and Health Administration rules and regulations; and
●	European Union GMP approvals, which may be delayed because of the use OMPULs which could then delay manufacturing for clinical trials.